By Greg Paeth
NKyTribune Senior Reporter
The Covington Business Council and the Urban Partnership have pushed the “hold” button on their 30-month effort to create a special district that would have assessed business owners for enhanced maintenance services in much of the city’s downtown.
A letter from the business council and the partnership, which was created to convince business owners and city officials about the value of the district, was sent to city officials Monday.
The letter says that while Covington officials seem to support the concept of a business improvement district (BID) they are not prepared to demonstrate a commitment to the project by, in effect, signing on and endorsing the plan.
At this point, the key question is whether “on hold” is a synonym for “dead.”
The letter said, in part:
“At its regularly scheduled Feb. 23, 2015 meeting of the board members of the Urban Partnership of Covington (the board) voted 6-1 in favor of immediately suspending any additional activity as it relates to the proposed business improvement district model it has spearheaded for the past 2½ years.
“In discussions over the past several weeks with city leaders the Business Council believes there is still strong support for a business improvement district in Covington’s City Center or what is considered the downtown…That is highly encouraging.
“However, there does not appear to be adequate support from city commissioners regarding the mechanics of the model that the Urban Partnership has been proposing. While disappointed with the prospects that our plan will probably not be accepted, the CBC and “UP” are still committed to partnering with the City to offer programs that drive growth to the existing businesses which will attract and drive new investments and enterprises into Covington.
“It remains to be seen if that partnership could still come in the form of a new “BID” model spearheaded by our organizations.”
Creating a BID as a way to help revitalize downtown was recommended in the 2007 Third Century Strategic Plan that was sponsored by the city as well as the Center City Action Plan that was completed in 2012 by a Denver consulting firm.
Under the current plan, the assessments on downtown properties would have raised about $300,000 for downtown maintenance. Some of the annual assessment would be as low as $200 a year while the average bill might be $400-$500, the business council said. Corporex Companies would have paid “tens of thousands of dollars,” on its highrise riverfront properties, the council estimated.
The BID has been the dominant topic of joint CBC and UP board meetings for more than two years. It was discussed briefly at Monday’s meeting of the boards.
The business council and the partnership began collecting signatures door-to-door on petitions to create the district in 2012. For a 21-month period in 2011-12, the enhanced services were provided at no charge in downtown Covington by the CBC and the partnership in a trial run for the program.
During that time period, 45 tons of litter was picked up in downtown Covington and some 800 graffiti “tags” were removed, the council and the partnership said.
State law requires that more than half of the owners of property inside the district boundaries must sign a petition in support of the district. Those who sign in support also must represent ownership of properties that are assessed at more than 50 percent of the assessed value of all the property in the district.
Once those objectives are met, the city commission could have moved ahead to approve an ordinance that would have created a district for an area that’s bounded roughly by RiverCenter Boulevard, Madison Avenue, “Short” Pike Street, Greenup and Scott streets.
Right now 50.5 percent of the property owners have signed the petition. Those property owners represent 49.8 percent of the assessed value of all the property inside the district, according to business council calculations.
Beginning last summer, the business council and the partnership had asked the city to allow its downtown properties to be included along with property owned by other supporters of the district. The council and the partnership believed at the time that Mayor Sherry Carran and Commissioners Steve Frank and Chuck Eilerman could be counted on to vote for the initiative.
But when Eilerman began to raise questions about the configuration of the district and other issues, the city endorsement was never presented for a vote.
If the city properties were included along with the properties owned by supporters, the business council and the partnership calculate that more than 57 percent of the property owners representing nearly 60 percent of the assessed value could be placed in the pro-BID column.
As he has in the past, Eilerman said Monday that he favors a BID for downtown but has questions about how the boundaries were drawn and the complexity of the formula that’s used to determine how much each property owner would pay.
Eilerman, who sells commercial real estate and worked as a planning consultant for eight years, said similar districts in Cincinnati and Louisville have more logical, straightforward boundaries. Covington BID boundaries appear to be “arbitrary and capricious. If someone gets upset (and sues), we’re in trouble,” Eilerman said.
He said the funding formula elsewhere was fairly simple. Property owners were asked to pay one tenth of one percent of the assessed value of the property, Eilerman said.
The Covington formula has several variables, including how the property is being used, square footage and front footage.
Eilerman said he thinks moving ahead with the BID would require another round of gathering signatures on a petition that would reflect changes in the boundaries and the assessment formula.
“The BID can be a great thing. It’s just that this recipe is a little deficient,” the commissioner said.
City manager Larry Klein made it clear that he would like to see a BID approved at some point.
“I am hopeful that this letter (from the CBC and the UP) will allow for a ‘pause’ by everyone involved who are supportive of the BID concept, and time to reenergize, rethink, and regroup,” Klein said.
“None of us know for certain what form any new BID effort will take in the future, but I think a positive conclusion to this first attempt will be the first building block for the second (and hopefully successful) effort at establishing a BID in Covington.
“We appreciate the CBC and UP efforts for their tireless and unlimited dedication to making Covington a better place for everyone.”
Corporex Companies, whose properties line the riverfront west of the Suspension Bridge, is one of the major property owners that did sign the petition to create the district. Wessels Construction and Development, which had sued to halt the BID creation, sold its property in the district last year for $82.6 million.
NKy Tribune Senior Reporter Greg Paeth is a member of the board of the Urban Partnership, which has been working with the Covington Business Council on creating a business improvement district. He voted against the proposal to suspend action on the BID plan at the February board meeting.