By Chris Otts and Marcus Green

LOUISVILLE, Ky. (WDRB) – More than seven years ago, former Mayor Jerry Abramson and the Cordish Cos. unveiled a striking plan for downtown Louisville: a $250 million entertainment district with shopping, restaurants, a movie theater and perhaps a hotel.

The project known as “Center City” didn’t make it off the ground before the recession took hold. Plans evolved, and Cordish — the Baltimore-based developer of 4th Street Live — got several extensions to make it a reality.

Ultimately, Cordish never built anything.

But the company is still set to receive $5.25 million from Louisville Metro government simply for walking away from the project, which will now be constructed entirely by Omni Hotels Resorts of Dallas.

Mayor Greg Fischer announced last week that Omni would be the sole developer of a 30-story hotel, apartment building and grocery store at 2nd and Liberty streets. Cordish, which had planned to build the apartments and grocery store, is now out of the deal entirely.

But Cordish’s exit from the project does not come without a price for Metro taxpayers.

According to the mayor and his aides, Metro government has agreed to a two-part payout to “facilitate” Cordish’s stepping aside:

– Cordish will get $3 million in city money from a reserve account set up to pay for “soft costs” such as marketing and design of the old Center City project. The account, created during the original deal in 2008, had $2.1 million remaining as of this year – to which Fischer agreed to add $900,000.

– Fischer’s administration also agreed to pay Cordish $250,000 for nine years to be used at the Cordish-owned 4th Street Live for free concerts and other promotions and events.

Fischer said in an interview that the payouts to Cordish were negotiated as the city pushed to have a single developer, which would streamline the $289 million project.

“We felt like that was best for the city, and so that’s part of the cost of doing it,” Fischer said.

He noted that Cordish “had the development rights to the block” – rights that had to be legally transferred to Omni.

Fischer’s staff will now present details of the Omni deal to the Metro Council, starting on Monday with a meeting of the council’s ad hoc budget committee. Construction could begin as early as this summer, and the hotel is to open by March 31, 2018.

Council member Kelly Downard, a Republican who has raised concerns about the city’s deals with Cordish in the past, said it’s regrettable the company is getting an “awful lot of money” from taxpayers to get out of the Omni deal.

“Giving them another dollar doesn’t make me very happy,” he said.

But Downard said he can live with this small part of an “enormous transaction” by which the city will get the type of hotel leaders have coveted for years.

“We’ll have that all downtown and people won’t ask about how much money Cordish got. They’re going to say, ‘My gosh, look what’s here.’ And that’s kind of what we want. I’ve come to terms with it,” he said.

After talking with Fischer’s economic development staff, Downard said he understands the main justification for the payoff is to reward Cordish for getting Omni interested in coming to Louisville.

Omni’s involvement was not publicly known until last March; Cordish said in April 2013 that it was working with a marquee hotel brand not currently in Louisville.

“They got Omni to the table. The fact that they brought them in is critically important,” Downard said, adding that it’s hard to say exactly how much that’s worth.

In a statement issued by Fischer’s office, Cordish vice president Blake Cordish said: “We are very pleased to have delivered a world-class development for the city as we promised. Omni will be a great addition to Louisville.”

A Cordish spokeswoman did not respond to WDRB News’ requests for more information and an interview.

Metro Council President Jim King, a Democrat, did not respond to a request for comment.

Council member David Tandy, a Democrat whose 4th District includes downtown, said the funds Metro government agreed to pay Cordish will help the Omni project get done.

“It positions us as a city and region to attract even larger conventions to the city and other large-scale events,” such as NCAA postseason basketball games, he said.

Current plan

After months of negotiations that led to Cordish’s exit, Omni now plans to build a 600-room hotel and 225 apartments, a 20,000-square-foot grocery store, 3,000-square feet of retail space and a parking garage with at least 820 spaces, according to a development agreement filed with the Metro Council last week.

It will all be within the old Water Company block bounded by Muhammad Ali, Liberty, 2nd and 3rd streets, which Omni will buy from the Metro government for $1, according to the development agreement.

The Parking Authority of River City, a city agency, has agreed to buy the garage for an estimated $17 million once it’s built.

The deal calls for Omni to spend about $150 million, while another $139 million will come from various city and state subsidies, according to the development agreement and Fischer.

The block once was viewed as the leading site for a new downtown arena, which ended up farther north at 2nd and Main streets.

Cordish announced in 2007 it would invest $250 million in the block and surrounding areas, including the now-vacant Louisville Gardens arena at Muhammad Ali and 6th Street, which is no longer part of the project. The Center City plan fluctuated in cost and scope for years and drew criticism from council members who claimed the deal was too generous to Cordish.

A history of subsidies

Since entering the Louisville market in the early 2000s, Cordish officials have proven deft at landing subsidies from the city, beginning with taxpayers’ purchase of the old Louisville Galleria, which was given to Cordish to build 4th Street Live.

In 2009, several Metro Council members complained after it was revealed that Abramson had given Cordish a $1.8 million forgivable loan, most of which was used to renovate Lucky Strike, the former bowling at 4th Street Live, into the Sports Social Club, a Cordish subsidiary.

The remaining $850,000 of that giveaway was used last year to create the Tavern, a bar above the Sports Social Club.

In 2012, former University of Louisville economist Paul Coomes estimated city and state taxpayers would subsidize 4th Street Live by $31 million in all over 20 years – figures that do not include the recent $250,000 annual payments that Fischer agreed to as part of the Omni deal.

Those payments are meant to continue an arrangement that dates to the beginning of 4th Street Live.

As a tourist draw, 4th Street Live has gotten aid from the state in form of tourism tax credits worth about $1 million annually since 2005. The state credits have differed from year to year because they are based on actual sales taxes at 4th Street Live.

Since 2005, Metro government has been supplementing the credits to bring the total amount of annual aid for 4th Street Live to $1.3 million. In 2012, for example, city records show Cordish got $881,582 in sales tax rebates from the state, while Metro government chipped in $418,418.

Now that the state rebates have run out after 10 years, Fischer said Metro government has agreed to continue paying Cordish $250,000 a year for nine years — with legal assurance that the money will continue to be used for 4th Street Live.

Free public concerts are one example of how that money is used, Fischer said.

“We like what’s happened as a result of that agreement. Those funds went to Cordish, and they used those funds to enhance 4th Street Live,” he said.

The other part of the Cordish payout – the $3 million reserve account that the company will get to keep – dates to the 2008 Center City deal signed by Abramson.

Under that deal, the city set aside $2.5 million for Cordish to use for “soft costs,” such as design, engineering, marketing, planning and market studies. According to the 2008 agreement, Cordish was to request distributions from the account to pay for these costs as they were incurred.

Cordish withdrew only about $400,000 from the account, leaving $2.1 million, Fischer said. The city agreed to add $900,000 to the account.

Fischer implied that Cordish is entitled to the money in the account, saying the $2.1 million “already was going to be going to Cordish.”

However the 2008 agreement says any distributions from “soft costs” account should be related to Cordish’s actual expenses for the development, and that Metro government could ask for invoices orcanceledd checks to substantiate those expenses.

Despite multiple requests, a Fischer spokesman declined to make Jeff Mosley, the city’s chief negotiator on the Omni deal, available for questions.

Bruce Traughber, who helped strike the original Center City deal with Cordish as Abramson’s economic development director, declined to weigh in on the payout to Cordish.

But Traughber, who left city government in 2011, said he never doubted Cordish’s commitment to the project. It was announced, he noted, just as the “Great Recession” began, triggering turmoil in financial and credit markets and ultimately scuttling projects across the country, including Museum Plaza in Louisville.

“I have no question they entered into the original agreement for Center City in good faith and they wanted to do that. It took more time to do than anybody wanted,” Traughber said. “I think the development is great. It looks wonderful. It certainly fills the need in that block that we saw so long ago.”

Copyright 2015 WDRB News. All rights reserved.

PINE KNOLL SHORES — This county’s state senator says he’s “tremendously optimistic” about the economy in the year ahead as a result of actions the Republican-controlled General Assembly has taken during the past two years.

Speaking Friday during the Carteret County Chamber of Commerce’s annual spring legislative luncheon held at the Country Club of the Crystal Coast, Sen. Norm Sanderson, R-Pamlico and also representing Carteret and Craven counties, said there’s a new tone of cooperation in the two branches of the legislature. He said past efforts are beginning to have positive results and that work will continue when the 2015 session convenes Wednesday.

“Two years ago when I was here for this legislative (luncheon) and even last year, I was cautiously optimistic about where we would be or where were going in the next year or two. I am tremendously optimistic about 2015, the growth we are going to see in our economy, because the things that we have been doing are beginning to show us that they’re working. I never had any doubts,” Sen. Sanderson said.

Rep. Pat McElraft, R-Carteret, was also slated to appear but she was a no-show, after calling in sick with a case of the flu. Sen. Sanderson handled the bulk of the discussion with County Manager Russell Overman providing remarks from his perspective.

During his remarks, Sen. Sanderson dismissed critics of the sweeping tax reforms enacted two years ago, including those who say the changes are leading to revenue shortfalls that could reach critical levels.

According to reports, the legislature’s top economist said in December that revenues were about $190 million below expectations for the first five months of the fiscal year ending Nov. 30. The first-quarter gap through September was $62 million.

Much of the shortfall was attributed to weak individual income tax collections. A decline in employees’ income tax withholdings in the first half of the calendar year contributed to a $450 million gap in the previous fiscal year, according to Associated Press reports.

Sen. Sanderson said Friday he didn’t think the shortfall would persist come tax season this year.

“I think when we get to April 15^th, that we’re going to have the money that we projected we’re going to have. In fact, I think we are going to have more,” he said. 

Sen. Sanderson said the new leadership’s direction appeared to be more conducive to both branches of the legislature working together. 

“We are really going to do a whole lot more jointly, as far as our caucuses are concerned. The joint caucus leader in the House, Senator Berger has appointed me to be her counterpart in the Senate, so I’m going to be working hard to keep or two chambers on speaking terms,” Sen. Sanderson said without naming the House designee.

He said the legislature had succeeded in keeping “old ideas that worked” and combining them with new ideas to bring positive change. 

Sen. Sanderson said he was “thrilled to be a part” of the six-hour Republican caucus meeting held earlier in the week in Kannapolis – a closed-door session he said focused mainly on education matters. 

He said the atmosphere in the General Assembly has become one that reflects the Boy Scout’s motto – “Be prepared.”

“That’s exactly what we in the General Assembly have been trying to do and that’s prepare North Carolina for what we believe is coming,” he said, mentioning technology advancement, population growth and infrastructure and education needs.

He said hard decisions must be made, but the new relationship between the House and Senate would lead to less contentious work together on common goals.

He said the top five priorities are jobs and the economy; education; transportation; regulatory reform; and taxes. All are affected and influenced by revenues.

Many of those issues are addressed in the chamber’s legislative agenda – a wish list for reforms and measures deemed vital to business in Carteret County and beyond. Top chamber priorities include:

•Increased transportation funding.

•Maintaining the statewide uniform school calendar law.

•Insurance reforms.

•Funding for community college and pre-kindergarten through 12^th grade public schools.

•Health care concerns, such as Medicaid, behavioral health and sales tax exemption for public hospitals.

Sen. Sanderson said the biggest challenged the state faces in the next 20 years is how to fund its transportation needs. He said the state already has the highest gas tax in the Southeast and that is an unstable funding source because higher prices tend to curb usage. Transportation funding surpluses of years ago were spent on other things, he said, and dedicated funding is needed for roads projects.

“It’s time that we have a conversation about how we can have dedicated funding for our transportation needs because everybody in this state is affected by transportation,” he said.

Although the senator said he’s tired of dealing with it, the issue of funding and tolls for North Carolina’s ferry system would likely be up for discussion during this session.

He said the school calendar law – considered an important to coastal counties’ economies and to western communities as well – is also likely to come up again.

“Tourism is important to us, it’s our lifeblood,” he said, adding that a week of revenue from visitation has a big impact on tourism-dependent communities such as Emerald Isle. Starting school earlier would hurt those economies, he said.

Regarding education, Sen. Sanderson said the issue of pay for veteran teachers must be addressed. He said studies have shown that teachers become their most effective after eight or nine years on the job. Those teachers must be retained, he said.

Longtime teachers received the smallest increases in the teacher pay plan approved last year in the General Assembly.

Sen. Sanderson called on community colleges to take a stronger stand than they have historically, with regard to legislative measures. The community college system has traditionally just accepted changes handed down by the legislature while university system advocates have been more vocal in regard to funding.

“The community college system hasn’t made enough noise, compared to the university system,” he said.

He said a plan is in the works to form a joint House-Senate caucus to look into better transitioning for high school seniors into the community college system. Input would be sought from both college officials and K-12 administrators, he said.

Sen. Sanderson said insurance reform is still needed, despite the insurance commissioner’s recent ruling against property insurer’s request for a massive rate hike. He said the insurance industry has been diligent and influential in its lobbying.

“I don’t owe anything to insurance lobbyists,” he said.

Regarding Medicaid, Sen. Sanderson said it is important to a lot of people and there is talk of expanding the program, although the House and Senate differ on the details. A compromise is needed, he said.

Other health care problems, such as behavioral health, also need to be addressed, he said, adding that it’s not right to just “push (those with mental illness) over to emergency rooms and sheriffs’ departments.” He called it a “critical situation. We’ve got to do something about it. The longer you put it off, the worse it’s going to get.”

County Manager Russell Overman also spoke during the luncheon.

During his remarks, Mr. Overman called for changes to state lottery laws that would restore funding guarantees for school construction. He said that fund was capped during the 2011-12 session and without the guarantees, the money raised by the education lottery could be easy pickings to cover other non-education-related expenses.

Mr. Overman said the county opposes unfunded mandates and the shifting of Medicaid and other expenses from the state to the county level.

Mr. Overman said there’s also “chatter” that changes to the state’s sales tax proceeds distribution method could be coming, changes he said would be detrimental to Carteret County.

Contact Mark Hibbs at 252-726-7081, ext. 229; email mark@thenewstimes.com; or follow on Twitter @markhibbs.

WINSTON-SALEM, N.C. — Over the last two days, at least 57 animals were saved from the sub-freezing temperatures in Forsyth County. This is in the wake of a press conference involving each law enforcement agency in the county, calling for people to be on the lookout for animals left outside without proper shelter, food and water. These animals — now being housed at the Forsyth County Animal Shelter — were either seized, surrendered by their owners, or found as strays.

However, FOX8 has learned that at least one of these animals will be euthanized.

“It’s a combination of age, medical condition and being out exposed to the elements,” Forsyth County Animal Control’s Lt. John Day said.

Many more of the animals may meet the same fate. The owners of the animals who have been found not to be abusive will have a chance to come pick up their pets. Those who are not claimed will be evaluated for adoption, but if they are not found to be adoptable, they could be humanely euthanized, according to Day.

“If they do die, it’s a humane death. It’s not the type of situation they’d face if we didn’t do anything,” he said. “Being left outside alone either to freeze to death, chained up outside to a tree without shelter, or even to be running loose out on the streets to get run over by a car.”

Local animal advocacy groups, like non-profits Fur-Ever Friends of North Carolina and UnchainForsyth, agree.

“Can you imagine, you’re sick, you’re unhealthy, you’re freezing to death. There are a lot more things worse than euthanasia,” said the nonprofits’ Jennifer Tierney. “They would have continued to live like that had it not been that they were taken.”

Tierney says this is simply a way for the community to step up and adopt the animals before it’s too late.

To the people who phoned in to the authorities regarding the at-risk animals, Tierney wants to assure them that it was the right thing to do.

“You did the right thing to protect them, and it’s everybody’s responsibility to look out for these dogs,” she said. “Keep your eyes open and report everything you see and keep reporting it. You are the voice for the voiceless.”

In the case of the dog that will be euthanized, Animal Control will be reviewing the case and the owners could face charges.

“There are more cases we’ll look at, to look at the elements involved, and what was going on,” said Day. “If they do meet the criteria for cruelty we’ll be pursuing that.”

For information on how to adopt an animal from the Forsyth County Animal Shelter, check out their website at www.co.forsyth.nc.us/AnimalControl/. To donate to, or for more information about Fur-Ever Friends of North Carolina, visit their website at www.fureverfriendsnc.org. 100 percent of donations will go to the animals and can be sent to Fur-Ever Friends of NC or UnchainForsyth at P.O. Box 15742, Winston-Salem, 27113.