West End TIF board meets fundraising goal as opposition from residents continues
The West End Opportunity Partnership, set up by state legislators to subsidize new development in west Louisville, met its obligation to fundraise $10 million by Thursday. The quasi-public organization received start-up money from some of the city’s largest businesses, despite a resident-led protest campaign against it.
Metro Council President David James, who serves as the Partnership's interim chairman, said major donors including Churchill Downs Inc., Yum! Brands and LG&E contributed to help meet the fundraising goal.
“They recognize that this is a once-in-a-lifetime opportunity to try something that we’ve never done before,” he said. “They want to be a part of making Louisville better and improving the quality of life for people across our city, especially west Louisville.”
The organization was required by state law to raise $10 million by the end of June. James said Wednesday that the $10 million the Partnership raised in private donations will unlock $10 million in seed money from Louisville and another $10 million from the state.
The Partnership and its board were created by the Kentucky General Assembly last year to oversee what's called a tax increment financing district covering nine neighborhoods in the West End. The group will control most of the new tax revenue generated in those neighborhoods over the next 20 years. Under state law, the Partnership is supposed to reinvest that money into redeveloping the area by subsidizing new housing and businesses.
Some residents fear the initiative will drive up the cost of housing, further gentrifying west Louisville and displacing its predominantly Black population.
While tax increment financing districts, or TIFs, are not a new economic development tool, the one being overseen by the West End Opportunity Partnership is unique in its size.
Generally, TIFs cover a single project or some of the blocks surrounding it. TIFs are normally used to direct tax revenue generated by a large development back into the project itself, helping a developer pay for construction or operating costs. Private developers asking for this kind of tax break usually have to prove the project alleviates blight or provides some sort of public benefit.
The West End TIF, which won’t start collecting taxpayer money until next January, covers 12 square miles of Louisville’s urban core. Experts say the TIF is unique in its lack of independent oversight and analysis, according to a recent WDRB report.
Over the coming months, James said the Partnership’s board will focus on finalizing its structure and procedures, finding a permanent director and addressing concerns it isn’t doing enough to engage West End residents.
“I have been very insistent that the board is going to drive this ship, so what that community engagement looks like is going to be up to the board,” he said. “We’ll be discussing in the next couple months how we want that to look.”
The 2021 state law creating the West End TIF requires Metro Council and city leaders to sign a local participation agreement that sets a baseline of tax revenue for the nine neighborhoods and directs 80% of the revenue above that baseline to the Partnership.
Additional donors to the West End Opportunity Partnership include UPS, the Kentucky Distillers Association, The Gheens Foundation, Jewish Heritage Fund for Excellence, James Graham Brown Foundation and Caudill Seed Company.
Protesters target West End TIF donors
Meeting the fundraising requirement was the last major hurdle the Partnership needed to clear before it could start operating and collecting tax revenue. But West End residents opposing the TIF say the Partnership is failing to meet some of the other provisions state lawmakers laid out.
The Partnership’s board is supposed to have 21 members: 12 appointed by the governor, Louisville mayor and local universities, and nine resident representatives for each of the neighborhoods within the initiative’s footprint. There are currently four vacant seats, however.
While state law requires a board member representing the Federal Reserve Bank of St. Louis’ Louisville branch, that institution has refused to participate or fill its designated seat since last October. Celine Mutuyemariya, who represented the Louisville Urban League, resigned last month.
There is currently no representative for the Park Hill neighborhood, and the Parkland representative resigned on Monday after activists opposed to the West End TIF called for them to step down because they didn’t actually live in that neighborhood.
Mariel Gardner, a resident of the Park Duvalle neighborhood, also noted that a separate advisory board that’s supposed to include nine neighborhood representatives has just a few members.
“Those seats have not all been filled, yet they are telling us that community representation is on the board and they are making decisions with our input,” she said. “They are not.”
Gardner is an organizer with the #StoptheWestEndTIF campaign, a protest movement backed by the Historic Black Neighborhoods Assembly, an advocacy group. She and other opposition activists sent letters to the Partnership’s donors earlier this month outlining their concerns and urging them to rescind their contributions.
In addition to the missing board members, the organizers told donors that the Partnership has yet to secure 501c3 non-profit status from the IRS and cannot provide proof it has the proper staff and processes in place to administer the $10 million in grants it received. The letter also noted that there has been no independent analysis of how west Louisville residents will be affected by the 20-year TIF.
“Considering all of these missing and essential components there should have been requirements for oversight, accountability, and transparency from funders donating to this project,” the letter said.
Organizers with the #StoptheWestEndTIF campaign said they hadn’t received any formal response from the donors as of Tuesday.
In response to these criticisms, James said the board is in the process of filing the necessary paperwork to get nonprofit status with the IRS, but would not have that done by Thursday’s fundraising deadline. He said becoming a 501c3 and having every member of the board seated are not required under state law for the Partnership to move forward.
James also denied any claims that the Partnership couldn’t meet the expectations of its donors.
“We are in lock step with all of our grantors and everything is going well,” he said.
Residents opposing the Partnership and the West End TIF say they are now lobbying Metro Council members to stop it. Ameerah Granger, a Chickasaw resident and organizer, said the Council could do that by rescinding its $10 million allocation or refusing to sign the local participation agreement.
“This [initiative] is just too big for them to turn a blind eye to, especially when all signs point to this having cataclysmic ramifications for west Louisville and for the larger city,” she said.
Granger said she and other residents continue to be concerned that the West End TIF will only benefit developers and, without any protections for renters, many west Louisville residents will be displaced.
Yasmine Jumaa contributed to this story.