O’Rourke Wrecking continues to demolish the 17-acre former IRS “Flat Top” located just west of Madison Avenue.
City gets OK to create TIF District to pay for infrastructure costs
COVINGTON, Ky. – The City of Covington can use up to $45.5 million in future state tax revenue to help develop the 23-acre site downtown where a former IRS data-processing facility is being torn down.
The Kentucky Economic Development Finance Authority, or KEDFA, today gave the City permission to set up an innovative arrangement called a Signature TIF, or Tax Increment Financing District.
The 31.6-acre district – which will consist of the 23-acre site, the adjacent Northern Kentucky Convention Center, and surrounding streets – allows the City in essence to use the growth in revenue from three state taxes collected within the TIF’s borders: sales taxes, ad valorem property taxes, and income tax.
The City will use the revenue to pay back money it borrows to build what’s called the “horizontal infrastructure” on the site, including a restored street grid, sidewalks, parking garages, and utilities.
“Creation of the state TIF district was a significant part of our planning efforts, and it’s incredible to have the state invest in this project as such a strong partner,” Covington Economic Development Director Tom West said. “We appreciate the support of Gov. Andy Beshear and his team at the Cabinet for Economic Development as we take another step toward creating a transformational space that will help define The Cov for future generations.”
The decision came at a KEDFA meeting in Frankfort today. The Covington Board of Commissioners voted May 10 to approve the TIF agreement were it to be passed by KEDFA.
KEDFA had given preliminary approval to the TIF in December 2020, which allowed a consultant to be hired to formally estimate the anticipated net new state revenue that will result from the office buildings, hotel rooms, housing units, and shops built as part of the project.
According to the consultant’s report, “the Project represents a rare and significant opportunity for the City of Covington and Commonwealth of Kentucky to enrich its presence along the Ohio River with a vibrant, mixed-use district.”
Both the preliminary and final approvals from KEDFA followed recommendations from the state Cabinet for Economic Development.
The TIF is a 30-year arrangement. It’s called a “Signature” district because the total value of private investment is expected to top $200 million.
The IRS processing center was once Covington’s largest employer, but the federal government closed the facility in 2019.
The City purchased the site and hired Atlanta-based global architecture and design firm Cooper Carry to help it create a conceptual master plan based on City needs, a market review, and extensive public engagement. The plan calls for a mix of land uses, including office space, a hotel, apartments and condominiums; a restored street grid; the possible expansion of the Northern Kentucky Convention Center; plus parking garages, a public plaza, and a levee park.
A contractor hired by the City, O’Rourke Wrecking, is currently demolishing the site, and the City will soon hire an architecture, engineering, and design firm to develop specs for the horizontal infrastructure.
To learn more, see the City’s website at Covington Central Riverfront Development.
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