Plans for a parking garage and commercial wrap in Block 6 of the downtown Bowling Green Tax Increment Financing district have been a subject of contention for a number of years. Those plans have changed and adapted and ultimately run into roadblocks in the form of shuttered restaurants and liens placed on the property.
A week ago, liens totaling nearly $2.4 million were filed against Mills Family Realty Inc. for money unpaid to construction services for the commercial wrap. The restaurants operated by the founders of the company in the wrap – 6-4-3 Sports Bar and Mariah’s – also closed Monday.
Clinton Mills of Mills Family Realty said in an email to the Daily News, in regard to the liens: “We are working diligently on a solution. There are a lot of moving pieces and hope to have this resolved in the near future.”
Negotiations involving the troubled Hitcents Park Plaza continue as Warren County and Bowling Green officials work toward having another group take over management of the development.
County Attorney Amy Milliken said Friday that Judge-Executive Mike Buchanon and Doug Gorman, chairman of the Warren County Downtown Economic Development Authority, are supposed to meet with Bowling Green Hot Rods owner Jerry Katzoff today to discuss the issue.
Milliken said legal action against Mills Family Realty is being considered, but she hopes that won’t be necessary.
“I think legal action may be necessary if we can’t work out an agreement because I’ve got to get the liens off the building ... which would necessitate contractors getting paid, or they’re not going to take the liens off.”
Millken said she thinks a resolution will be arrived at soon.
“I am very hopeful that within the next 90 days it will be resolved,” she said.
On Feb. 27, Milliken sent Mills Family Realty a notice that its lease agreement with the county was in default.
The letter lists five instances of default and gives the business 30 days to resolve most of those issues.
Those issues include premium lease revenue due by Jan. 15 not being received, disbursements being made from the project fund in violation of terms and conditions of the lease, subleases not being in the form required and no rent being collected for the square footage of closed restaurants, the project fund not being in proper balance and liens being placed on the property.
Doug Gorman, chairman of the Warren County Downtown Economic Development Authority, said water has been removed from the parking garage and the wrap after flooding about two weeks ago after snow and freezing temperatures were followed by heavy rain.
The next step will be repairs of water damage, he said.
“SERVPRO has been working around the clock,” Gorman said.
Planning for the TIF
A parking garage was part of the original plans for the TIF district, which received final approval from the state in October 2007.
Plans for the district included a 4,000-seat baseball park and a 790-space parking garage.
But those plans changed two years later. In October 2009, Bowling Green City Commission and Warren County Fiscal Court approved a change to the TIF district plans to move the planned parking garage from downtown next to the Bowling Green Ballpark to a spot next to Western Kentucky University’s campus as an incentive for a private developer to build a 100-room hotel nearby.
Land had already been purchased and buildings demolished for the downtown parking garage at the time of the switch. Developers backed out of the downtown development, citing a worsening economy as making the development no longer economically feasible.
In February 2010, development of a 370-space gravel parking lot and a water retention basin was under development near Bowling Green Ballpark in place of a parking garage.
But officials were still pursuing a parking garage in the location, and members of the Warren County Downtown Economic Development Authority were actively seeking developers for Block 6 and other TIF blocks.
“We’re not just sitting back hoping somebody will appear. We would love to have somebody tomorrow if we could, but that’s not very realistic,” Mary Cohron, then-chairwoman of the authority, said at the time.
In May 2011, the authority approved moving forward with a request for proposals for construction management services for Block 6, where a 821-car parking garage and multi-use shell were planned. Originally, the side of the garage fronting College Street was meant to be the first stage of the wrap developed with about 80,000 square feet of space.
Authority attorney Kevin Brooks said at the time the authority was approaching the project as if it would be the developer but was also pursuing private developers for the project.
In August 2011, Alliance Corp. was awarded the construction management bid for the project.
In December 2011, work on the parking garage in Block 6 was underway, and was set to enter the second phase of construction by the end of the year.
The anticipated $9 million garage was to serve as a parking structure for downtown visitors to places including Bowling Green Ballpark and the Southern Kentucky Performing Arts Center, which was not yet open.
“It’s a tremendous impact,” Gorman said at the time. “It’s going to alleviate some (parking) issues, of course, with SKyPAC and the ballpark.”
Hitcents gets involved
In March 2012, financing for the commercial wrap of the Block 6 parking garage began to be put in place.
That month, Fiscal Court approved an ordinance to issue $22 million in industrial revenue bonds for the development with the idea that the bonds wouldn’t be backed by the county.
The Bowling Green City Commission in March 2012 approved a municipal order expressing the commission’s intention to lease the parking garage with lease payments equal to bond payments on the commercial wrap of the parking garage.
The municipal order passed with a 4-1 vote, with Commissioner Bill Waltrip voting against the measure, citing the risk involved for the city as the reason behind his vote.
“The city is still guaranteeing a bond payment, and I’m not willing to have that happen,” he said at the time.
But Commissioner Melinda Hill expressed support for the project, comparing the city’s involvement to that of an entrepreneur.
“An entrepreneur is willing to take the risk, and they look for the bigger picture and what’s best not just for them, but for the entire world and their community,” she said.
In May 2012, the City Commission approved a subdeveloper agreement with Mills Family Realty for the commercial wrap, along with changes to several other TIF district documents.
The city approved backing $22 million in industrial revenue bonds for the wrap. The commission approved leasing the parking garage with lease payments equal to the bond payments for the wrap.
Other revenue sources, including some lease revenues and the TIF revenues from several blocks, were also dedicated to the city lease payments. But Brooks said at the time that the city was responsible for covering whatever portion of the bond payments wasn’t covered by other specified revenues.
“I’m not going to predict the future nor say there is zero risk,” he said at the time.
Hitcents President Chris Mills said the agreement was a chance for the city to invest in keeping a successful company in Bowling Green.
“We’re very excited about the vote that took place tonight,” he said. “It just furthers the Hitcents commitment to the Bowling Green area.”
Ed, Chris and Clinton Mills, founders and operators of Hitcents, also operate Mills Family Realty.
But Waltrip, who was the only commissioner to vote against the measure, said the move set a bad precedent and could hurt the city’s bond rating.
“I still don’t think it’s in the best interest of the city to risk our bond rating to pass an ordinance with so many unknowns,” he said.
Ground was broken on the wrap, to be called Hitcents Park Plaza, in June 2012.
Financial problems arise
In July 2013, the City Commission approved the issuance of another $5 million in bonds for the commercial wrap project, a large portion of which was meant to go toward finishing the first floor of the wrap, which was set to include a number of restaurants.
Brooks said cost estimates for the project were inaccurate and made at a time when construction prices were lower.
Chris Mills said the project was complicated because the parking garage was built first and the wrap was designed around it.
ADA compliance was an issue, as was movement of the roof of the parking garage when vehicles roll over it, meaning the roof of rental space also moves, he said. It cost more than anticipated to fix those problems.
“Really, as we’ve been very deeply involved in the construction process and working with Alliance (Corp.), it just seems a lot of things ... have just been oversight,” Chris Mills said at the time.
Waltrip again voted against the measure, this time citing concern about the government supporting competition for existing businesses.
“The problem is, in my estimation again, that we as a city entity are helping bring in competition for existing businesses, restaurants particularly,” he said then.
In August 2013, Hitcents moved into the wrap and MR Group Inc., formed by the Mills’, announced it would open seven new restaurants in the wrap to be owned by the group.
Clinton Mills said they tried to bring in individual name brands for the fast-food concepts, but in the end it was more feasible for one company – theirs – to own all the spaces.
“We will have economies of scale that way,” he said then.
Clinton Mills said the restaurants were part of creating a destination at Hitcents Park Plaza.
“In our young lives, we have traveled a lot and eaten at a lot of good restaurants, so we will be all about service, food quality and atmosphere,” he said.
In February 2014, MR Group announced it had purchased Mariah’s from owner Rick Kelley, who was facing financial problems at the time, and would move the restaurant to Hitcents Park Plaza to be the anchor restaurant in a set of five restaurants. The Mariah Moore House went to Kelley’s creditor and has since been sold. Kelley, for a while, came along with the restaurant’s name as a consultant, as did many of Mariah’s employees.
But in September 2014, three of the restaurants suddenly closed. Tres Molinos, Pagoda Asian Cafe and Brick & Basil Pizzeria – Hitcents’ three fast-casual restaurants – were closed, with Clinton Mills saying that his business was looking at revamping the concepts and making the restaurants full service.
Mariah’s and 6-4-3 Sports Bar remained open.
Clinton Mills said the three restaurants didn’t fit with the “downtown destination” atmosphere they want to create.
“What we noticed was that people are going to 6-4-3 and Mariah’s,” he said.
Clinton Mills said the three fast-casual restaurants likely weren’t getting as much business because customers had to put in a lot of effort for a quick-service meal, namely having to park somewhere in the parking garage and walk down to the restaurants.
“I think we underestimated the parking challenges that are there,” he said.
In January, City Commission approved entering into negotiations with Katzoff, who has restaurant experience, about taking over the management of the parking garage wrap.
The approved municipal order authorized city staff to negotiate with Katzoff, or a company named by him, for the transfer of the interests of Mills Family Realty related to the project.
In February, the Daily News reported Mills Family Realty owes the contractor and subcontractors that built Hitcents Park Plaza nearly $2 million for work done on the project.
At the end of February, liens of $2.4 million were filed on the property.