Following a public negotiation, city leaders and the developers of a luxury apartment project in NuLu have reached an agreement that should allow the project to move forward.
In return for receiving a roughly $5 million tax incentive, Georgia-based Flournoy Cos. will incorporate six workforce housing units into its 270-unit luxury apartment development. It also will donate $634,000 to the Louisville Affordable Housing Trust Fund, a nonprofit that helps fund affordable housing in the city.
New language in the agreement also will define what workforce housing means in terms of monthly rental rates.
After the developer previously agreed to include 18 workforce units in the development, Flournoy’s local attorney Jeffrey McKenzie told members of the Louisville Metro Council’s Labor and Economic Development Committee that the project would not be feasible with the 18 units.
“Failure to incentivize Flournoy or other potential developers in the downtown area …will mean a failure to attract much-needed population density to the downtown area,” McKenzie later wrote in a letter to the city on behalf of his client.
In the letter, Flournoy offered to donate $500,000 to the city in lieu of including any workforce units in the project and stated that if city leaders didn’t agree to those terms, then the project would not move forward.
However, it seems that the city and the developer were about to come to an agreement that is acceptable to both parties. The changed agreement will be presented to the full Metro Council for approval.
“As a 17-year resident of downtown, I am looking so forward to getting more residents in the downtown area,” said Councilwoman Barbara Sexton Smith, D-4.
However, both Sexton Smith and Councilman Bill Hollander, D-9, said multifamily housing developers should be on notice that if they come to the city asking for government handouts, then they should be prepared to include workforce housing in the development.
“I think this process has been less than ideal,” Hollander said. “We need workforce housing in developments that we are supporting. …We have some in this building, but I much prefer more.”
Sexton Smith told Insider that she and Hollander would work together to try to get language passed that would require some workforce housing in any housing development that comes to the city asking for tax incentives.
“We want to send the message out loud and clear to all developers coming our way: This is not the precedent. We’re not going to negotiate out in the public continually,” she said.
Councilwoman Cheri Bryant Hamilton, D-5, criticized the developer for first agreeing to the workforce housing and then reneging on that agreement.
“I think we are setting a dangerous precedent,” she said. “What you had agreed to was 18 units, and it’s almost like you were negotiating in public.”
Flournoy’s attorney McKenzie has not returned calls for further comment Wednesday.