Editor’s note: For the item below, we chose statements that asserted or presumed facts that could be verified, or for which the information the statement is based on could be verified. We focused on the topics of the Triple Crown Business Park and the restaurant tax for this item, and, if time allows, will look at other topics and possibly expound on the restaurant tax for next week’s issue.
Numerous statements were made by candidates for Berea mayor and the Berea City Council at two recent town halls held by the Berea Restaurant Association. Here is a look at some of those statements and whether they are supported by facts.
Topic: Triple Crown Business Park
The Citizen reached out to both mayoral candidates to understand the information they based their statements on regarding this topic. Incumbent Bruce Fraley responded both by phone and email. Ricky Clontz was reached by text, which included a deadline of 10 a.m. Wednesday. He provided an email address to send our questions to. The questions were sent Tuesday morning. We had not received a response by the deadline.
Candidate: Fraley
Statement: The city expects 700 jobs at a minimum from Triple Crown Business Park.
Verdict: True, when the park is fully built out
Officials with the Central Kentucky Business Park Authority have estimated the number of expected jobs based on state and national data from similar projects over the last few years. The figure is based on developing approximately 180 acres of the park and installing advanced manufacturing and industrial users, Fraley said.
Fraley also offered some comparisons in Berea.
Hyster-Yale employs nearly 800 people on roughly 50 acres, and Astemo Plant Number 1 has similar numbers on similar acreage.
If the jobs created at the park are similar to that ratio, the park could create more than 1,000 jobs.
Fraley also was sure to say that actual job numbers will depend on which companies choose to locate at the park.
Statement: State and federal grants will pay for the initial phase of work on the Triple Crown Park.
Verdict: True, with the exception of required matching funding. The city will be responsible for an estimated $205,000 toward the 20% match needed for the state grant.
The Central Kentucky Business Park Authority has been awarded $4.1 million in funding through the Kentucky Development Product Initiative program and $2 million in federal grant funding for the project. A 20% match is required for the $4.1 million state grant, which will be split among the four governments.
That funding should cover the initial work needed based on engineering estimates. That covers the site grading, utilities, road access, and other work.
“As with any construction project, the final cost will depend on bids and site conditions once construction begins,” Fraley said.
Statement: After initial work, the park will “pay for itself” as lots are sold.
Verdict: Possibly true. It’s hard for us to tell at this point.
According to Fraley, land in the park is expected to sell at around $60,000 to $75,000 an acre, which he said the Central Kentucky Business Park Authority board based on sales of similar land in the region.
Land that is currently for sale in the city’s other industrial sites is listed for much less. Land at the Berea Industrial Park, for example, is listed at $42,000 an acre.
The location or other factors could make the land at the Triple Crown Park more desirable.
Though there is a large range of estimated costs to develop industrial land, the online calculators The Citizen consulted put the cost somewhere around $62,000 an acre when including site clearing, erosion control, drainage and retention, and landscaping, as well as “soft costs” of engineering/survey, permits/fees, legal, project management, insurance, and contingency. Adding roads with curbs and sidewalks bumps the estimate up an additional $40,000 per acre.
Due to time constraints, the Citizen was unable to further research how much of this work will remain after the initial phase, and how much the Central Kentucky Business Park will do and what will be left for land purchasers to do. The Citizen also was unable to pursue looking at why the land at the park might sell for more than land at the city’s other industrial parks.
Fraley said there also is the possibility of additional grant funding.
“While we cannot rely on the possibility of additional grants, this project is viewed very favorably by State and Federal officials and regional projects such as ours should continue to receive federal and state funding in the foreseeable future,” he said.
Candidate: Clontz
Statement: “It’s going to take hundreds of years to pay this back.”
Verdict: We have not found any factual basis for this statement, and Clontz did not return our question asking him what information he relied on for the statement.
Statement: The cost could be $25 to $30 million.
Verdict: Same as above.
Statement: There are already open spots in the existing industrial park.
Verdict: True. The city has listed land available at both the Mayde Road Rail Site and the Berea Industrial Park Expansion.
Statement: Fayette and Scott counties will make money off the citizens of Berea.
Verdict: Depends on what “off the citizens of Berea” means
Though Clontz didn’t provide much detail on this statement, we presume that by “off the citizens of Berea,” he means because the park is located in Berea.
Berea transferred the land to the Central Kentucky Business Park Authority. Though that move meant Berea could no longer sell the property to companies on its own, that doesn’t necessarily mean the city will realize less revenue from the sale of the land and tax revenue.
According to officials, the 300 acres is currently “bumpy” and requires a lot of investment to get to a state where it can be developed for industry. Berea would have had to invest a lot of resources into that endeavor.
Also, the city would not have qualified for the grant money the project has been awarded on its own.
Because the Triple Crown Business Park is a joint venture, any costs that are not paid by grants would presumably be split among all four governments.
Tax revenues generated from the park will be split, with the first 10% going to Berea for a hosting fee and the remaining split among the three counties involved. Berea residents will benefit from the 10% going to the city and, as residents of Madison County, from the third of the remaining revenues going to Madison County.
If the statement simply meant that Fayette and Scott counties will make money off land located in Berea, then that statement is true.
Topic: Restaurant tax
The City of Berea collects a 3% tax on restaurant sales to fund the tourism commission.
The Kentucky League of Cities has offered guidance on tourism taxes on its website.
Candidate: Alex Sipple:
Statement: The restaurant tax goes into the tourism fund, which is a separate fund from the city’s other funds.
Verdict: True.
This is required by statute. Unlike the 3% transient room tax, none of the revenue from the restaurant tax can be turned over to the city.
Candidate: Steve Caudill (incumbent)
Statement: The city council can’t define what tourism is and can’t change tourism’s budget.
Verdict: True.
Guidelines from the Kentucky League of Cities state that any ordinance that restricts the use of the revenue could be voided by a court. The city does approve the tourism commission’s budget and has the power to not approve it if necessary.
From the Kentucky League of Cities: “It is important that city officials recognize that TCCs are creatures of city governments, funded primarily by city tax dollars.
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