The University of Louisville has committed to developing some of the nearly 210 acres in the East Market area designated as a Tax Increment Financing, or TIF, district. President James Ramsey has activated TIF with the city and state, which will run for the next 30 years beginning retroactively Jan. 1, 2011.
The agreement is meant to benefit both the city by developing an underdeveloped area, and U of L, which is trying to meet its mandate for becoming a premier research university in Kentucky. The university has already invested over $200 million in the district, and Ramsey now says he wants to use TIF money to develop the health science campus region further.
U of L will receive both city and state funds for development in the area, but it must show growth each year to receive the money for that particular year. Louisville will commit 50 cents to every dollar of income tax generated over its 2006 base level, while the state of Kentucky will commit 80 cents to every dollar over a pre-approved growth average.
Ramsey met with advisors last week and said activating TIF funds will bring the university an estimated $1.3 million next year. That was enough for Ramsey to agree to activate TIF beginning 2012, which needed to be decided by Dec. 31 this year.
U of L will now be tasked with finding the actual amount of income growth since its base year in the district, which began in 2006, said Ramsey.
“We’ll go through and get the actual numbers now. This allows us to work with the city and state to get the actual numbers but we feel confident that it will be a positive number and somewhere in that range,” he said.
Ramsey could have waited next year to activate TIF, but he said despite the down economy, payroll numbers in the TIF district are up and because this specific TIF is determined by income taxes Ramsey sent written acknowledgments to the city and state this week to activate.
The money made from TIF will be put back into the development area and some projects could begin soon, he said.
“Our goal is to take whatever monies are generated from this tax increment financing arrangement and reinvest in that geographical area,” said Ramsey.
Ramsey has met with firm Hilliard Lyons for advisement. Hilliard Lyons worked with the YUM Center in supporting its development and Ramsey said he is entertaining similar business ideas with the health science campus, he said.
“What we’d like to do is to be able to sell a bond issue to perhaps build a second building on the Haymarket immediately or in the very near future or even build a parking garage,” said Ramsey.
NUCLEUS Innovation Park, which is at the core of development for the health science campus, has been stalled and slow going. Earlier this year it announced construction on the first of four buildings in the health center park. The city and university has since announced tenants and potential business interest in the area, which may show promise for growth in the area.
U of L had the option to wait to activate TIF until November 2012 for the following year, but Ramsey said he’s confident now is the time.