Fischer Orders Study of Fourth Street Live After Failed Cordish Loan

by admin on March 13, 2012

After killing a botched loan agreement with The Cordish Cos. to bring a tenant to its office space, Louisville Mayor Greg Fischer has ordered an economic development study of Fourth Street Live and its developer.

Last month, the mayor backed an ordinance that would have given the Baltimore-based developer an $850,000 forgivable loan in taxpayer dollars to move a new tenant into the Kaufman Straus building. But the administration withdrew their support for the measure after it was revealed the proposed tenant was The Learning House, which is already located downtown and only three blocks away from the proposed site.

City lawmakers have raised serious concerns about the relationship between Cordish and the mayor’s office due to an economic development officer who mislead council members that the new tenant would create 100 jobs when Learning House only expected 10 new positions.

Fischer says the study will examine taxes, jobs and spin-off development, adding the city and residents need the facts about the value of the downtown entertainment district.

“We have plenty of anecdotal evidence that Fourth Street Live is good for our downtown and good for our city’s overall economy. It is important that we have the actual facts. With our new administration and some new Metro Council members, it’s important we all have a common understanding of the data and make fact-based decisions in valid economic terms on what the development means to Louisville,” he says.

The $10,000 study will be conducted by the University of Louisville and paid for by Metro Government and the Louisville Convention and Visitors Bureau.

It will examine, among other things, the amount of state and local taxes generated by Fourth Street Live; amount of spin-off economic development created by the district; number of jobs created by construction and businesses operating in the district; economic impact on the city’s convention and tourism business; and the public sector’s investments and returns on incentives for the project.

The announcement comes hours before members of Fischer’s administration are set testify before the council’s Government Accountability and Ethics Committee. It is expected that city lawmakers will grill the mayor’s team about the proposal and what specifically the developer promised to merit such a hefty loan when the new business was moving a few blocks.

“What did Cordish tell the city? What did Metro Government know and when did they know it? Why should the taxpayers pay to move jobs three blocks? Where did this 100 jobs come from? I’ve never seen anything attributed to the Learning House or even Cordish in writing saying 100 jobs,” says Councilman Jerry Miller, who chairs the accountability panel.

In 2004, the Cordish Cos. opened Fourth Street Live to help transform what many called the city’s “decaying downtown” and turn it into a popular entertainment destination. But since then residents and officials have asked when the company plans to fulfill its other development promises such as the delayed Center City project. The company operates several other districts across the country in Baltimore, Kansas City, and Houston, among other places.

But the company has been more of a lightning rod since 2007, when a controversy sprang open over the loan agreement made by former Mayor Jerry Abramson, who offered Cordish a $950,000 forgivable loan to refurbish the downtown Starks Building. When that deal fell through, however, Abramson agreed the funds could be used at Fourth Street Live instead and the then-mayor was roundly criticized by council members and the press.

In 2010, a state audit also slammed the Abramson administration for making that agreement and noted its lack of transparency. Since then, the council has passed a number of ordinances to put more oversight in future agreements and disclose their details to the public, but with little impact on the original loan agreement.

According to Fischer’s office, however, Cordish officials have welcomed the call for a new study, which should be completed by late summer.

From Cordish:

“We believe it is an excellent idea. We are incredibly proud that Fourth Street Live! has played an important role in the revitalization of downtown Louisville, generated millions in tax revenues, created hundreds of jobs and served as an important catalyst of spin-off benefits including as a critical driver for the Louisville convention and visitor industry. It also should be noted that while the city has played an important role in Fourth Street Live!, the overwhelming majority of the investment has come from the private sector. Of great significance, Fourth Street Live! continues to thrive so that the jobs and economic benefits to the public sector are positioned to continue for years into the future.”

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