FRANKLIN – A proposed $70 million development that could transform the Interstate 65 exit 2 interchange in Franklin has received a potential boost from the Franklin City Commission and Simpson Fiscal Court.
Those government bodies have approved ordinances establishing a Tax Increment Financing District for 43 acres along U.S. 31-W (Nashville Road) owned by Franklin businessman Ashwani Sarvaria.
Sarvaria’s plan, which attorney Tim Crocker presented to the city commission Monday, includes a 96-room hotel and adjoining convention center along with apartments, retail centers and a “family fun center” expected to include a movie theater and bowling alley.
The acreage to be developed is near the Exit 2 Liquors store owned by Sarvaria, who has been involved in developing Franklin’s Holiday Inn Express and some hotels in Tennessee.
Crocker said the development can’t happen without creation of a TIF District similar to those that have helped with development of Warren County’s Kentucky Transpark industrial park and the Stadium Park Plaza area in downtown Bowling Green.
Tax Increment Financing is an economic development tool used by public agencies to finance needed infrastructure improvements for a project by earmarking future tax gains resulting from the development for the improvements.
The public investment is expected to increase the value of the property as well as the surrounding area and may spur further development. This increased tax revenue is the increment that the TIF District dedicates toward public infrastructure improvements in distressed or underdeveloped areas where private development would not otherwise occur.
Franklin Mayor Larry Dixon said this will be the first time the city and county have utilized a TIF District to help finance a project, but he believes it’s the perfect tool for this project.
“I feel good about the project,” Dixon said. “I think it will be a win-win for the developer and for the city and county.”
Dixon said development projects have to reach the $10 million threshold before they are eligible for TIF financing. No previous project had reached that level, and no developers had approached local government about creating a TIF District.
Crocker said the project has the potential for big payoffs, although any increase in property values and employment in the area may be several months away.
He said the TIF will be activated when at least $10 million worth of investment has begun. Sarvaria is waiting on funding assistance from the Kentucky Department of Tourism to build the hotel and convention center, so that threshold may not be reached until sometime next year.
Once it is reached, though, Crocker said 80% of the increase in property, business and payroll taxes generated in the district for the first 10 years will go to help the developer with infrastructure costs. The remaining 20% will come back to the city and county.
The percentage of the increased taxes coming back to the city and county jumps to 30% for the second decade of the TIF agreement and reverts to a normal arrangement after that, with the city, county and state collecting taxes on property that should by then have increased value and more employment.
Franklin City Attorney Scott Crabtree welcomes the opportunity to implement a TIF District similar to ones he has seen spur growth in other Kentucky cities.
“I feel confident that a TIF is the appropriate way to generate revenue for this project,” said Crabtree, who pointed to the Bowling Green TIFs as examples that have worked.
Both the Transpark TIF and the downtown TIF known as Western Kentucky University Gateway to Downtown Bowling Green have spurred development, according to Warren County Judge-Executive Mike Buchanon and Downtown Economic Development Authority Chairman Doug Gorman.
The Transpark TIF, Buchanon said, has “created the revenues needed to provide extraordinary sites that attract speculative building developers, industrial prospects and employers.”
Gorman called the downtown TIF that encompasses more than 300 acres and extends from the WKU campus to the Barren River “one of the most successful TIFs in the state.”
He pointed out that the downtown TIF has resulted in $325 million in capital investment and $110 million in increased payroll during its 13-year history.
Local entities have had more than $22 million in tax revenue returned to them during that period, helping to pay for development costs.
“The biggest advantage of the TIF District is that it gives us a way to incentivize development,” Gorman said.
Dennis Griffin, executive director of the Franklin-Simpson Industrial Authority, believes growth similar to Bowling Green’s can happen in the Franklin TIF District, to be known as the Franklin Gateway Local Development Area.
“This is huge for Franklin and Simpson County,” Griffin said. “It’s the type of investment we’re needing. I believe the convention center will attract additional restaurants and shops.”
Dixon believes the development that will have entrances from Nashville Road and Peden Mill Road can help build on the growth that his city is already experiencing.
Pointing to new manufacturing growth in Simpson County industrial parks along with residential growth and the expansion of the Kentucky Downs horse racing and gambling facility, Dixon said: “We’re growing by leaps and bounds, and that’s only going to continue.”
Both Dixon and Simpson County Tourism Executive Director Amy Ellis see great potential in having a convention center and the family fun center near I-65.
“Being located on I-65 is a big plus,” Dixon said. “The one thing we hear a lot is that Franklin just needs more things to do. This will provide that.”
“I see it as an opportunity for Franklin to be able to welcome more visitors,” Ellis said. “With the addition of the convention center, we should be able to host some events.
“It’s a positive thing for our community.”