The movement to restart the Museum Plaza project took another step today with Congressman John Yarmuth and Gov. Steve Beshear announcing that significant progress has been made regarding the state’s application for a $100 million federal loan from the U.S Department of Housing and Urban Development (HUD).
In a letter addressed to Yarmuth from HUD Assistant Secretary Mercedes Marquez, it says that the department is “optimistic that a [loan] commitment can be issued,” and that “HUD remains interested in assisitng the commonwealth” with the project.
Once the development team receives a commitment for the remaining $140.5 million construction loan and other administrative requirements, HUD says it will move promptly to complete the process for issuance of certain financial commitments.
“I have been working closely with HUD officials in support of this loan application since it was filed this past summer,” Yarmuth said in a news release. “Getting Museum Plaza financed and back under construction is critically important for our community and will lead to the creation of thousands of good paying jobs. This is an important step forward and I am proud to join the Governor and other community leaders in advancing this effort.”
In 2005, developers unveiled the 465 million, 62-story skyscraper, saying the project would create nearly 7,000 short-term and permanent jobs. The project was an ambitious development that included more than 300,000 square feet of office space, two hotels, residential space, a non-profit contemporary arts center and a public park.
The construction stalled three years later, however, due initially to complaints about installing the skyscraper’s foundation, which endangered the historic buildings along Main Street. Eventually the failing economy forced developers to postponed efforts to borrow more money due to higher-interest costs on bonds and other important loans.
Over the summer, Gov. Steve Beshear announced the state’s plan to submit an application for the $100 million loan, utilizing a loophole in HUD’s Section 108 loan guarantee program that says federal funds can be used to revitalize blighted neighborhoods and create jobs for low-income residents.
The pitch to leverage the loan is that the majority of the more than 2,300 full-time and permanents jobs will go to poorer resdients from Louisville and surrounding counties who will work in Museum Plaza. In July, attorney Craig Greenberg, one of the partners in the project, succesffuly urged magistrates with Bullitt County’s Fiscal Court to pass a resolution supporting the project by making that very argument.
“It is very exciting that HUD is formally expressing its interest in helping finance Museum Plaza. This is a project that will create thousands of jobs for low- and moderate-income Kentuckians and will stimulate the economy across the Commonwealth,” said Gov. Beshear. “My administration will continue working with the development team, HUD, and Congressman Yarmuth to make this project a reality.”
The loan hinges on the development team getting the remaining 30 percent of the financing, and according to the press release they are pursuing different financing strategies. No specific details were provided on that plan, but investors have already poured in more than $50 million into project, and are confident they can secure the remaining financing.