Ahead of a major vote this week, a legal opinion says that pledged private investment in a Louisville City FC stadium project cannot be enforced.
At a meeting on Thursday, the Louisville Metro Council is expected to vote on a $30-million bond for the project. If the $30-million bond is approved, $25 million would be used for land acquisition, with the additional $5 million used as a contribution to brownfield remediation and public infrastructure.
That is one component of a plan that calls for a new Louisville City FC stadium to sit on 15 acres, open in 2020, cost $50 million and be financed by the team. In addition, the club is expected to pay $14.5 million back to the city over 20 years from sales of land, rent from leases of land, and stadium rent. The overall project, which is expected to include retail, a hotel and offices, will be built by private investment and potentially backed by TIF financing.
After questions were raised by four council members, county attorney Assistant Jefferson County Attorney Sarah Martin issued a legal opinion on the project. According to her October 18 response, the pledges from Louisville City FC owners to land $185 million in private capital is “unenforceable” and “merely a goal of the development project.”
The club’s ownership group signed an amendment on Sunday that calls for it to spend at least $45 million on land and construction for the stadium. The group of four council members requested another amendment that would require a minimum of $100 million in private investment, but the mayor’s office has indicated that it will not push for that stipulation. More from The Courier-Journal:
Mayor Greg Fischer’s office said Monday the administration would not seek such a requirement.
“The ownership group is not in a position to guarantee how much funding will come from the ownership group and outside private groups that desire to invest in the project,” the mayor’s office’s response said.
Louisville City FC board member Mike Mountjoy told the Courier-Journal on Tuesday that club owners anticipate spending more than $100 million to develop the area but said they are considering selling ground to outside developers who want to build their own structures.
“The problem was the council members were asking us to guarantee not what we would do but what someone else would do,” Mountjoy said. “Let’s say someone wants to build their own office building. They buy the ground from us, we get a little bit but the city gets most of it. We can’t control if (developers) then spend $25 million or $100 million on their building.”
The Louisville Metro Council is expected to consider multiple issues relating to the project on Thursday. One is the aforementioned bonding for the project, while another is a resolution to request the state’s assistance in the form of a TIF district. The TIF will have to receive approval from the Kentucky Economic Development Finance Authority before it is finalized.
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