Louisville Mayor Greg Fischer’s administration apologized for a botched loan agreement with The Cordish Cos.—the developer of Fourth Street Live—during a Metro Council committee hearing on Tuesday.
Last month, Fischer offered up a resolution to give the Baltimore-based company an $850,000 forgivable loan to bring an unnamed tenant to downtown. The legislation was sponsored by Councilman David Tandy, D-4, and was pitched to renovate two floors for new business in the Kaufman Straus building.
But the mayor killed the proposal after learning the tenant was The Learning House, which is already housed downtown and was only moving a few blocks to a new location.
Director of Economic Growth and Innovation Ted Smith told the council’s government accountability panel that the mayor’s office made a mistake and based the request on incomplete information.
“Clearly we were too hasty in our actions as it relates to the loan request,” he said. “We take seriously the responsibilities we have to the public, the local business community and commitments that have been made in the past.”
In response, Fischer has ordered an economic development study of Fourth Street Live to assess its financial benefit for the city. The study will also examine taxes, jobs and spin-off development and the mayor’s office says the study could impact where Metro Government invests in the future.
But during the hearing, Councilman Kelly Downard, R-16, admonished the mayor’s economic development team for failing to ask Cordish enough follow-up questions, adding it underscores what he calls the city’s one-sided relationship with the developer.
“Why in the world would you go forward based on incomplete information? Especially since to access the money there’s a requirement to have a copy of the lease. If you didn’t know who the tenant was we’re running out to get money and we don’t even know who it is yet we have to know by contract,” he said.
The city’s deal with Cordish also includes the stalled Center City project, which is an expansion of Fourth Street Live and renovation of the former Louisville Gardens.
Smith told the committee that Cordish has until September 1 of this year to sell bonds for the delayed project and that the city still has the option to cancel if the developer doesn’t meet certain standards. But when pressed by council members on what those standards were specifically, the mayor’s economic team declined to define them.
Government Accountability Vice-Chairman Brent Ackerson, D-26, says the city’s deal with Cordish is fundamentally flawed because it gives the developer too much important property under different agreements with little recourse or transparency.
“One person having multiple contracts where they control so much of this city’s valuable real estate is not a good situation. It does not promote competition and it does not promote true market values to what’s happening. The concern really boils down to we cannot allow one entity to monopolize what’s going on downtown,” he says.