It took two years, but the City of Owensboro received final approval from the state Thursday for the 54 TIF (tax increment financing) Gateway Commons project.
This is huge news for the City of Owensboro, who is annexing most of the 260-acre project into the city so that Gateway Commons will receive city police, fire, and sanitation service.
Initial plans for Gateway Commons include:
- 835,600 sq ft of retail space
- 45,500 sq ft of restaurant space
- 55,000 sq ft of entertainment including a movie theater and bowling alley
- 120,000 sq ft of office/professional space
- two hotels with 150 rooms each
- numerous residential units
The Greater Owensboro Economic Development Corporation projects the economic impact of the project to be $3.1 billion over the next 20 years.
But the best news is that because of the TIF, and since the developer, Matt Hayden with Gulfstream Commercial Services, incurred all phase one construction costs, all of this has cost the city nothing.
“That’s the beauty of this project. There’s no borrowing involved. There are no direct payments involved. This will have a positive net income on the City’s general fund. So this is really a stabilization factor for the community – without having any debt,” Assistant City Manager Ed Ray explained.
Altogether, Gateway Commons is expected to take 5-7 years to build out the entire space, but according to Ray, the developer hopes to open 300,000 sq ft of retail space by spring of 2018.
Ray says $7 million of the state (TIF) funds will be used to update for RWRA water plant. Those improvements include an on-site sewer system for the Gateway Commons development, but also generator replacement and electrical upgrades at the existing east plant, Ragu Pump Station upgrades, and other upgrades to the east plant and existing sewer systems.
By utilizing the TIF for the needed RWRA improvements, Ray expects all of those improvements to be done without raising rates, which is another huge bonus for the community from Thursday’s TIF approval. “What that means is state funds will be used for those upgrades rather than increasing the burden on the local ratepayer.” And those improvements would have been needed in the near future anyway. “This is fantastic because we’ll be utilizing state revenue to supplement the cost in lieu of what would have been a rate increase to fund those projects.”
Annexing nearly 200 acres of the development into the City of Owensboro is good for the city because once the incentives are paid off, all future tax revenue comes to the City. Because of the TIF, the state is now funding some of the infrastructure costs that would have been incurred by developers and the city if not for the TIF. For example, construction of the new road and entrance (next to Aldi), which is currently being built, and widening 54 to six lanes up to that point.
Beyond that, Mayor Payne expects final approval for the downtown TIF to come December 8, which will allow the construction of a new parking garage and third downtown hotel. “When you consider these two TIFs together, they have a huge impact on the future of this city,” Payne says. “And when you combine that with the improvements we’ve made over the past eight years, it is significant!”
