Call to Order and Roll Call
The3rd meeting of the Interim Joint Committee on Appropriations and Revenue was held on Thursday, August 28, 2014, at 9:30 AM, at the Northern Kentucky Convention Center in Covington, Kentucky. Representative Rick Rand, Chair, called the meeting to order, and the secretary called the roll.
Members:Senator Bob Leeper, Co-Chair; Representative Rick Rand, Co-Chair; Senators Walter Blevins Jr., Tom Buford, Denise Harper Angel, Ernie Harris, Ray S. Jones II, Alice Forgy Kerr, Christian McDaniel, and Robin L. Webb; Representatives Johnny Bell, Dwight D. Butler, John Carney, Ron Crimm, Robert R. Damron, Mike Denham, Kelly Flood, Martha Jane King, Reginald Meeks, Steven Rudy, Sal Santoro, Rita Smart, John Will Stacy, Jim Stewart III, David Watkins, Jim Wayne, Susan Westrom, and Addia Wuchner.
Guests: Jeanne Schroer, Executive Director, Catalytic Fund; Gretchen Landrum, CEO, Northern Kentucky Convention Center; Geoff Mearns, President, Northern Kentucky University; Mike Conway, Chairman, Northern Kentucky Convention and Visitors Bureau; Eric Summe, CEO, Northern Kentucky Convention and Visitors Bureau; Harold Dull, Price Group, Inc.; Casey Barach, Executive Director, E-Zone; Thomas Prewitt, Attorney; Dr. G. Edward Hughes, President, Gateway Community and Technical College; Gregg Fusaro, Capital Investments Group, Inc.; Arn Bortz, Towne Properties, Inc.; Guy Van Rooyen, The Salyers Group, Inc.; Ed Riehl, Mayor, City of Bellevue; Sherry Carran, Mayor, City of Covington; Kenneth Rankle, Mayor, City of Dayton; Mary Brown, Mayor, City of Ft. Thomas; Kenneth Wynn, Mayor, City of Ludlow; and Jerry Peluso, Mayor, City of Newport.
The Catalytic Fund – Vision for the Urban Core
Jeanne Schroer, Executive Director of the Catalytic Fund, discussed the history and function of the fund. The fund is a not-for-profit, privately funded company providing capital for high impact real estate development projects. It addresses the need for flexibility to attract investment for construction/rehabilitation of mixed-use real estate projects essential to revitalizing Southbank cities. The fund fills gaps between traditionally underwritten loans, developer equity, and a project’s costs, plus it provides technical expertise to assist in developing projects. She provided a list of investors and supporters of the fund and provided examples of real estate projects funded through the Catalytic Fund. The fund is actively engaged in 20 developments representing over $375 million in investment in Southbank cities. Ms. Schroer discussed enhancements and additions to Commonwealth programs which would have significant economic development impact. These include expanding historic tax credits, land bank legislation and funding for development of innovation districts.
Northern Kentucky Convention Center Expansion
Gretchen Landrum, CEO of the Northern Kentucky Convention Center discussed the expansion of the convention center. The Northern Kentucky Convention Center opened in 1998 at a cost of $31.5 million and has been self-sufficient for the last 15 years. All upgrades and refurbishments have been paid through operating revenues not from state appropriations. The convention center has invested over $2 million in upgrades in the past 12 months. Ms. Landrum discussed the estimated 2.7 percent annual fiscal return on investment and the estimated 12.9 percent economic return on investment projected for the convention center. She discussed the economic losses incurred due to lack of convention center space. She presented an expansion request, asking for $3 million in state funds to update the planning study and explore for funding options to expand the convention center. The convention center has a verbal agreement with the IRS/GSA regarding the land surrounding the center. If an expansion project does not move forward soon, this verbal agreement may expire. If that happens, the center will be land locked and more business will leave Northern Kentucky for Cincinnati.
Northern Kentucky University Expansion
Geoff Mearns, President of Northern Kentucky University discussed proposed expansions. The university is requesting $97 million in state funds for design and construction of a Health Innovation Center, to be completed by the fall of 2017. He discussed the NKU student expenditure return on investment of state funds, and the economic impact of the university to the region.
Importance of Tourism to Northern Kentucky
Mike Conway, Chairman of the Northern Kentucky Convention and Visitors Bureau, Eric Summe, CEO of the Northern Kentucky Convention and Visitors Bureau and Harold Dull of the Price Group, Inc. discussed the importance of tourism to the Northern Kentucky region. Mr. Summe stated that tourism to the region fell by 24.4 percent between the 2012 – 2013 fiscal year and 2013 – 2014 fiscal year. The group compared economic development incentives offered by Kentucky to those offered by Ohio. They discussed Tourism Development Act sales tax incentives, requesting a 3-year extension for the Newport on the Levee project to an additional $5 million in sales taxes generated by the project for re-investment. This re-investment will generate additional jobs, payroll and sales taxes and stimulate the economy.
Uptech/Urban Core Model for technology startups
Casey Barach, Executive Director of E-Zone and Thomas Prewitt discussed building innovation districts in the Commonwealth. As the digital revolution broadens and deepens, tech industries have emerged as a force in creating jobs, spurring redevelopment of once blighted urban cores, and giving cities an economic and cultural jolt. They discussed the necessities for building innovation districts, highlighting the elements as related to the Northern Kentucky region. They discussed the need for a state supported innovation funding assistance program to develop tech companies in the area, suggesting that this be a matching dollar program.
Higher Education - Overview and Impact on Urban Revitalization
Dr. G. Edward Hughes, President, Gateway Community and Technical College discussed the need for an educated workforce to spur regional economic development. In the Northern Kentucky region, 76.13 percent of citizens aged 25 or older have either no college experiences or some college credits but no degree. Nationally, the average of persons with a college degree is 36 percent. He discussed the importance of having urban college campuses to offer support for urban citizens and businesses. He discussed utilizing local college availability as a economic development tool to attract new businesses to the region. He discussed the gradual migration of the Gateway campus to the Northern Kentucky urban core, and provided examples of urban building revitalization headed by the college.
Requirements for a successful Urban Core
Gregg Fusaro of Capital Investments Group, Inc., Arn Bortz of Towne Properties, Inc., and Guy Van Rooyen of The Salyers Group, Inc. discussed various real estate developments in progress in the Northern Kentucky region, and the economic impact of these projects. They discussed the use of historic building revitalization tax credits, and outlined the tax incentive package being offered by Ohio to entice real estate development to move to Cincinnati.
Improving our cities
Ed Riehl, Mayor, City of Bellevue; Sherry Carran, Mayor, City of Covington; Kenneth Rankle, Mayor, City of Dayton; Mary Brown, Mayor, City of Ft. Thomas; Kenneth Wynn, Mayor, City of Ludlow; and Jerry Peluso, Mayor, City of Newport discussed various ways to improve economic development in the Northern Kentucky region. All mayors discussed the importance of the preservation of their local historic districts, the availability of riverfront property for development, and the necessity to provide safe, inviting, walkable and bikeable neighborhoods.
There being no further business, the meeting was adjourned at 11:55 p.m.