The City of Cold Spring has issued millions of dollars in municipal bonds to fund part of its largest ongoing real estate development project.
On Monday, Cold Spring’s city council voted 4-1 to approve up to $40 million in Industrial Revenue Bonds to finance a portion of the ongoing development at the former Disabled American Veterans building. Specifically, the city approved $35 million in Series A bonds and $5 million in Series B bonds.
Industrial Revenue Bonds are tax-exempt bonds issued by a municipality on behalf of a private developer. Generally, the bonds are used to finance local construction projects, but the developer, not the government, is legally obligated to repay the bonds.
In Kentucky, IRBs can be issued through multiple series, with the distinction generally being tied to tax treatment. Series A bonds are typically tax-exempt at the federal level, meaning investors do not pay federal income tax on the interest. Conversely, Series B bonds are taxable at the federal level but are often exempt from state and local taxes. Both series fund the same projects, like construction or equipment, but the split enables issuers to target different investors and structure repayment more flexibly.
Keating, Muething and Klekamp attorney Jim Parsons, an expert in Industrial Revenue Bonds, was present at the city council meeting to demystify the details of the bond distribution for the legislative body and the public. The bonds are not Cold Spring’s debt but rather the developer’s.
“This is basically a maximum of $40 million for the capital investment for the Phase One project,” he said. “The cap that the bond amount is the maximum authorized amount, the capital investment may not be quite that much.”
The Disabled American Veterans, or DAV, relocated their headquarters to Cold Spring in 1966. The nonprofit organization remained there for 55 years before moving out of its roughly 134,000-square-foot headquarters to Erlanger in 2021.
The building was situated at a busy intersection of Alexandria Pike and Industrial Road, making the 28-acre lot it occupied a prime target for redevelopment. In 2025, the building was officially demolished, leaving the lot vacant for now.
In July, LINK nky reported that Cincinnati Children’s and The Christ Hospital network, two of the largest healthcare providers in Greater Cincinnati, would construct medical offices and retail space at the former DAV site.
The development would be called the Cold Spring Town Center, and would be anchored by two 45,000-square-foot medical office buildings and four retail buildings. In total, the project will cost around $49 million.
Construction was planned to occur in two phases, starting with the retail buildings. The retail buildings are scheduled for completion in 2026, with the medical office buildings expected to follow by 2028. Cincinnati Children’s will open a pediatric primary care office within its medical building, while leasing the remaining space to other healthcare providers. Christ Hospital will expand its outpatient offerings to include primary care, women’s health and cardiology services.
The IRBs passed by Cold Spring will go toward funding the retail portion of the project, Parsons said.
“This is the process for the first phase of the project, which is the restaurant, commercial phase in the project,” he said. “There’s a second phase that will come to you later, which would be the advance for the medical office.”