The Covington Board of Commissioners performed an emergency vote on Tuesday during its caucus meeting, when votes usually do not take place, to amend the tax increment financing, or TIF, agreement for the Central Riverfront Development site, located on the site of the old IRS building.
TIFs allow cities to recoup state taxes generated in a particular area and redirect them back into local infrastructure projects, rather than state services generally. TIFs are managed by the Kentucky Economic Development Finance Authority, a state administrative agency. Covington’s acting Economic Development Director John Sadosky requested the vote to avoid missing a state deadline.
“We are in a bit of a time crunch because the mixed-use TIF program sunsets on June 30,” Sadosky told the Board of Commissioners. “So, we have to have this amended and restated agreement signed by the mayor before the next Kentucky Economic Development Finance Authority meeting on June 25.”
The city has had a TIF since 2022, according to a memo Sadosky delivered to the board, which you can read here, before Tuesday’s meeting. That TIF required a minimum capital investment of $200 million within two years of approval in order to activate the TIF. The city failed to meet this threshold but was granted a two-year extension before failing to meet the threshold again. The city is not allowed to request another extension under the terms of the TIF approved in 2022.
The new terms are as follows: the TIF term will be reduced from 30 to 20 years and will allow city to request reimbursements of up to roughly $30 million, a reduction from the original terms of $45 million in allowable reimbursement. In exchange, the minimum capital investment threshold to activate the TIF is reduced from $200 million to $20 million, which the city has met, meaning it will be able to access funding almost immediately.
“We would still collect 60% of the state taxes,” Sadosky said.
The vote to approve was unanimous.
