County officials defend project, tax hike

Apr 14, 2009      Messenger-Inquirer

James Mayse

Apr. 14, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Daviess County commissioners and the head of the Greater Owensboro Economic Development Corp. fielded questions from about 60 county residents Monday evening, as the officials attempted to explain the details of the downtown development plan.

The audience filled most of the chairs and lined the walls in the Sorgho Elementary library as EDC Director Nick Brake and commissioners Bruce Kunze and Mike Riney outlined the downtown plan and discussed their hopes for its success.

"We can always find reasons why we can't do something or why it won't work," Kunze said at the end of the two-hour meeting. " ... I know there are wildly different opinions, and I know it's controversial. But we're trying to do what's right for the community."

Fiscal Court and the Owensboro City Commission both voted in February to double their insurance premium tax rates over a two-year period to finance $80 million in public projects downtown. Brake said the public investment would be dwarfed by the amount of private dollars invested in downtown.

"I have very little question we'll match three private dollars for every one public dollar," Brake said.

Downtown development is necessary as an economic development tool -- largely to attract and retain educated workers between the ages of 25 and 40 who, because of their mobile jobs, can choose where they want to live, Brake said.

To attract those workers, communities need to create "quality of place," Brake said.

A number of young professionals were polled about Owensboro. Brake said that half the respondents said Owensboro is not "a livable place."

"You want them to choose us," Brake said. "If they don't choose us, we're going to have a harder time paying our retirement" and maintaining quality of life, he said.

The plan was created by the Gateway Planning Group, based on public involvement beginning with the "We The People" town meeting in 2007. The plan was also crafted on market studies of cities with similar characteristics as Owensboro.

"It's a very thorough plan," Brake said. "This (plan) will make it. These guys have a track record and have succeeded every place they go."

Kunze said when the "We The People" event was held, "downtown development was the number one priority for this community." The plan calls for city and county investment to build a multipurpose convention center, a market square, an arts academy and to make changes to streets and additional improvements to Smothers Park.

"It's not just about building public buildings downtown," Kunze said. "We want to take this public package and cause this to be a catalyst" for private investment, he said.

"We felt ... the cost to the community would bear fruit and in the long run would be the right thing to do," Kunze said.

The plan calls for private developers to build a 225- to 250-room hotel near the convention center and create 300 to 500 residential units and 137,000 square feet of retail and restaurant space downtown. The arts academy will bring in students from outside the community to work with the RiverPark Center on Broadway-style shows, Kunze said.

Developers are already expressing interest in downtown, Kunze said. "Fred (Reeves, downtown development director) thinks there will be at least five hotel developers interested" in building a hotel near the convention center, Kunze said.

The insurance premium tax was chosen to finance the public project because it is spread across more residents than occupational taxes, Kunze said.

"If you (put the tax) only on the backs of working people, they're going to pay more" than if the tax were spread across the community, Kunze said.

The proposed tax increase could not be put to a public ballot, Kunze said. "There are very few things state law allows us to put on a referendum, and a tax like this is not one of them," he said.

The insurance premium tax increase would raise taxes about $20 for every $1,000 in insurance coverage a county resident holds, Kunze said. In his case, Kunze said he would pay about $140 additional in insurance taxes because of the increase in 2010.

"In my mind, it's worth it to me to see downtown prosper," he said.

Riney said the project would benefit more than just the downtown district.

"We have to stop and realize what's good for downtown is going to help our entire community grow," Riney said.

To complaints that commissioners had ignored public opposition to the tax increase, Riney said commissioners installed three amendments: To spread the increase over a two-year period, to exempt health insurance and crop insurance from the increase and to review the rate every five years to insure the increase is not generating more revenue than is needed to pay the debt on the public projects.

"I know the timing is terrible, but I know it's the right thing to do," Riney said. "We can't continue to put it off."

When asked if the convention center would be self-sustaining when the RiverPark Center is not, Kunze said government is budgeting money for operation of the convention center.

Riney said: "I don't think any of us are going to make the claim a convention center is going to pay for itself" but said there was a "special value" in creating jobs, which the center would do.

Rod Kuegel, a county farmer and member of the EDC board, said the decision to raise the tax rate was "spilled milk."

"If you don't see some difference (downtown) in two years, we know there are going be some changes made" in city and county government, Kuegel said. "Be positive."

Kunze asked the residents to give officials "the benefit of the doubt" on the downtown project.

When asked what he expected to happen downtown, Kunze said: "I think it will come back ... and be an area that will draw business and residential development."

James Mayse, 691-7303, jmayse@messenger-inquirer.com

Newstex ID: KRTB-0152-34138884

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