Louisville Mayor Craig Greenberg’s administration will end the longstanding practice of enlisting a city tourism agency to secure hotel rooms for his Kentucky Derby guests.
The Kentucky Center for Investigative Reporting earlier this month revealed how city officials used the Louisville Tourism agency to reserve rooms at the 21c Museum Hotel downtown. In doing so, they bypassed Metro Council approval for the nearly $49,000 contract.
Local lawmakers questioned the practice. Metro Council president Brent Ackerson said he’d refer the matter to the council’s Government Oversight, Audit and Appointments Committee for review. City purchasing policy and state law requires Metro Council approval for any noncompetitive purchase over $40,000.
“It needs to be looked into,” Ackerson told KyCIR earlier this month.
Last week, Jeff O’Brien, the executive director of Louisville Metro’s Cabinet for Economic Development, sent a letter to Ackerson and the 25 other council members pledging — “in the interest of full transparency” — to solicit competitive bids for future Derby hotels.
Ackerson, a District 26 Democrat, declined an interview request. In an emailed statement from a council spokesperson, he said O’Brien’s letter speaks for itself and he has not received any feedback or concerns regarding its content. A spokesperson for the council’s Republican caucus did not respond to a request for comment.
A spokesperson for Greenberg did not respond to multiple requests to discuss the letter and for an interview with O’Brien.
City officials have used Louisville Tourism to secure hotel rooms for nearly 30 events since 2015 — including the Kentucky Derby, a public works association trade show, an electrical workers union softball tournament, a church youth conference, a family reunion, an annual meeting of tactical police officers and more, according to records obtained by KyCIR.
For this year’s Derby, Louisville Tourism collected quotes from three luxury downtown hotels. In his letter to council members, O’Brien said city officials selected 21c Museum Hotel because it “would best serve the event’s needs at the lowest cost of the three options presented.”
Rooms at the artsy hotel on West Main Street cost $2,100 a night for Derby. Hotel Genevieve, on East Market Street, also offered rooms at $2,100 a night. Rooms at Hotel Bourre Bonne, on West Market Street, cost $2,500, according to a copy of the bids obtained from Louisville Tourism by KyCIR.
21c Museum Hotel also hosted Greenberg’s Derby guests last year. Greenberg led the hotel chain as chief executive before he was mayor.
O’Brien said in the letter that city officials did not seek Metro Council’s approval of the initial $48,951 contract with 21c Museum Hotel because the “aggregate amount” did not exceed $40,000.
In state law, the term “aggregate amount” refers to spending on “items of a like nature, function and use” that the city anticipates needing at the beginning of the fiscal year. Spending on items that “could not reasonably be established in advance” or that don’t get delivered are not included in the aggregate amount.
“We have since confirmed this decision with the Jefferson County Attorney’s Office,” O’Brien said.
A spokesperson for the county attorney said the agency cannot comment on legal advice provided to city government due to ethical concerns.
But, in the end, not all Greenberg’s guests wanted to stay at 21c.
“Being good hosts, we endeavored to meet their requests,” O’Brien said.
So, 21c Museum Hotel refunded the city nearly $35,000. In a last-minute move, city officials booked the farmhouse at Hermitage Farm in Oldham County for $25,000. The historic thoroughbred nursery is owned by Laura Lee Brown and Steve Wilson, the same pair that runs 21c.
As a result, O’Brien said neither contract eclipsed the threshold that would require council approval.
