Omni, Cordish partner with Kentucky, Louisvileon $261 million downtown hotel, grocery store

A city block in the heart of Louisville’s downtown will see a 600-room luxury hotel, a major grocery store, retail stores and 200 apartments — all part of a $261 million project announced Thursday. Louisville and Kentucky are joining with Omni Hotels & Resorts and the Cordish Co., which runs 4th Street Live!, to build the massive project within three years on the Louisville Water Co. block — owned by the city and bounded by Second, Third and Liberty streets and Muhammad Ali Boulevard. The project’s cost will be split between the public and private partners, with $135 million coming from Cordish and Omni and $126 million coming from the city and state, according to Gov. Steve Beshear and Mayor Greg Fischer, who were joined Thursday by Nick Benjamin, Cordish’s director of development, and by Mike Garcia, Omni CFO and senior vice president of development. “This project is a major infusion in our downtown and to the city’s entire economy,” Fischer said. “It will create jobs, both temporary construction positions and permanent jobs, and it will boost our convention and tourism industry as Omni provides a new level of luxury hotel.” Each parties’ obligations include: • Cordish and Omni will develop the luxury hotel, 200 apartments and 45,000 SF of retail anchored by an upscale grocery store. • The state will contribute $90.5 million through tax rebates. • The city will contribute $35.5 million. That includes the $17 million value of the land, which the city purchased years ago, and another $17 million the city will spend to construct a parking garage that will be paid for with Parking Authority bonds. The city also will provide $1.5 million for contingencies. • A financing district will be created within the block and part of an adjoining block, with a portion of the new tax revenue helping to finance the development. The block holds several historic buildings, including the Morrissey Parking Garage, the Odd Fellows Hall, the Falls City Theatre Equipment building and the former Louisville Water Co. building. Garcia said Omni is sensitive to preservation issues. Steve Rowland, the city’s chief finance officer, said the city will issue $104 mil- lion in bonds next year — likely with a 30-year term — to provide the funds to build the project. Although the city will guarantee the bonds, Rowland said he is confident that the project will generate enough tax revenue to cover the debt. The development will be among the largest projects under construction in the region. Construction is anticipated to begin in 2015, with the entire project expected to open no later than 2017. “This investment will be a catalyst for more convention activity, while bringing more out-of-state visitors to Kentucky,” said Beshear. Fischer called it a catalyst for Louisville’s downtown revitalization. Fischer said he had been negotiating the deal for more than a year, which is expected to create 1,350 construction jobs and 350 permanent positions. Fischer said he is particularly pleased that downtown Louisville will get a new grocery store. “Citizens and visitors have told us for years that a grocery was the biggest missing component to down- town,” Fischer said. The Omni Louisville Hotel will be the fourth four-diamond, luxury hotel in the area, and will feature 600 guestrooms and suites, 70,000 square feet of meeting space, a spa, fitness center, two full- service restaurants, rooftop pool-side café, street level retail venue and a lobby lounge, according to the plans. It will be the company’s first property in Kentucky. The project will also include 44,000 square feet of retail, including a full- service, 30,000-square-foot downtown grocery store. Those facilities will be developed by Cordish; the grocery operator has not been signed, officials said. An 850-space parking garage will be built to service the hotel, residential and re- tail/grocery and will be developed by the Parking Authority of River City. Metro Council President Jim King, D- 10th District, said the council must approve the bond issue and the creation of the tax district. But he expressed high confidence in Cordish, calling the development plans “a home run.” Fischer also praised Cordish, saying the company “stepped up, when no one else would.” The public sector’s assistance is consistent with comparable developments in other major cities, officials said. Louisville has more than 4,000 hotel rooms in the downtown area, around 2,300 of which are linked by the elevated walkway system with the Kentucky International Convention Center and the new KFC Yum! Center. Other hotels with a total of about 800 rooms in or near downtown are on the drawing board. And several large suburban hotels are also in sight, including a long-planned 500-room luxury hotel on Phillips Lane near Gate 1 to the Kentucky Exposition Center. But officials said the Omni is needed. Fischer said the Omni will offer rooms to the more than one million tourists expected to visit the Bourbon Trail this year. And Karen Williams, acting CEO of the Louisville Convention & Visitors Bureau, called the Omni “a game changer in Louisville’s chances of landing some of the major trade shows. Linda Edwards, vice president of sales and marketing for the Kentucky State Fair Board, a primary local convention recruiter, said another major hotel would help bring in new business, especially larger conventions and groups considering use of both the Yum! Center and KICC, which may soon be in line for a $175 million expansion and renovation. Additional hotel rooms downtown, for in- stance, Edwards said, would save groups the cost of having to shuttle delegates in from suburban properties. The Dallas-based Omni has about 40 U.S. hotels, including ones in Nashville, Indianapolis and St. Louis. Omni classifies about a dozen of the sites as resort properties.