One year ago, one of the signature projects in the Western Kentucky University Gateway to Downtown Tax Increment Financing District was the subject of a highly critical state audit, and the future of the entire project was clouded in uncertainty.
Twelve months later, local officials say the turnaround on the wrap development around the downtown parking garage has been dramatic and the steps taken to correct the issues are working well. Meanwhile, new developer Jerry Katzoff is working on the next steps for the project.
In 2013, the wrap, dubbed Hitcents Park Plaza after the signature tenant, was opened with Mills Family Realty as the developer and Mariah's restaurant and 6-4-3 Sports Bar & Grill anchoring the ground floor of the building.
But issues with the ongoing project became public in 2015, as contractors filed liens saying they were not being paid for their work, and Mariah's and 6-4-3 closed their doors. Then-state Auditor Adam Edelen issued a report last December that found overspending on the project of $9.7 million, resulting in a $4.5 million deficit, poor oversight and numerous, often contradictory, agreements.
Warren County issued $30 million in bonds earlier this year to pay a settlement with the contractors and pay off the existing bonds. New accounting and approval procedures were put in place to provide more oversight, and city and county officials were added to the Warren County Downtown Economic Development Authority board, which oversees the entire TIF District.
"The board as a whole is much more representative," authority Chairman Doug Gorman said.
He said officials had already started working on fixing problems with the project before the audit.
"We had identified those same issues and they were being corrected – what it did was give credence that we were going in the right direction," Gorman said.
"I believe the needed changes implemented (on the development) last year have stimulated a renewed and more intense momentum in Bowling Green's downtown and has been the push the the WKU Gateway to Downtown Bowling Green TIF project needed to maximize investment interest and promote quality growth in the city," Warren County Judge-Executive Mike Buchanon said.
While officials took steps to correct the issues, the biggest change was recruiting an experienced developer to manage the project. Katzoff, a New York businessman with wide development experience through his Manhattan Capital LLC, was a known commodity in Bowling Green as owner of the minor league Bowling Green Hot Rods, who play across from the wrap at Bowling Green Ballpark.
With several restaurants in his portfolio, officials approached him about reopening and operating Mariah's and 6-4-3 soon after they closed. He agreed and was later picked to be the developer of the entire project – a role he formally assumed in February.
In the 10 months since, the wrap, now known as Stadium Park Plaza, has quickly filled up, with more development in the planning stages.
New Katzoff-recruited tenants in the wrap include law firm Morgan & Morgan, Comprehensive Health Management Inc., Center Care PPO, the Topper Corner store selling WKU-related merchandise and gifts and a Starbucks coffee shop.
"A year ago, the two restaurants were closed and the building was 30 percent occupied," Katzoff said. Now he is working with a potential tenant on filling the last large vacant office space in the 118,000-square-foot building – the top floor facing Bowling Green Ballpark – and he is "exploring the possibility of (building) more office space and luxury condos."
Katzoff said the offices and condos would be built on the unfinished sides of the wrap, and he has hired an architect to begin designs.
Another focus is on trying to to sell the naming rights for Bowling Green Ballpark, Katzoff said.
He said Mariah's and 6-4-3 are both doing well, with banquet space completely booked through the end of the month.
"We've created a place for people to congregate," he said of the plaza between the wrap and the ballpark, by holding such events as the upcoming free New Year's Eve event that will include bands, a ball drop and fireworks.
"We have done a lot of the right things," Katzoff said, adding that opening a coffee shop like Starbucks helps "validate" the project.
The effort has not been without challenges – because Mariah's and 6-4-3 had been closed for several months in the transition, "we really had to fight to bring back that loyal following," he said.
Overall, "in 10 months what we have accomplished has been miraculous ... the building is now a viable building," Katzoff said.
Local officials agreed.
"It has been as successful as we could have hoped for. I'm glad he was able to the make an impact in the fashion he did," Bowling Green Mayor Bruce Wilkerson said.
Gorman said having the wrap without a developer like Katzoff "was a really ugly (option) ... the building would have been only 10 to 15 percent full and the restaurants closed. We would have kept fighting, (but) we were really fortunate (Katzoff) had the skill set to open and operate the restaurants," Gorman said. "We had confidence he'd be able to make an impact."
While the wrap only represents about 10 percent of the total investment in the TIF District – "it's physically right in the middle and is an anchor," Gorman said, and it seems likely that some of the private projects in the area may have been delayed or abandoned if the wrap was sitting largely empty.
"There's a ripple effect ... it has an impact on all development out there," Gorman said.
The point was echoed by Buchanon.
"All of the new commercial and business investment and retail and restaurant traffic downtown has created a real emphasis on downtown living. The growth and success of Stadium Park Plaza has helped to stimulate all of downtown (with) new restaurants and businesses on and around the square," Buchanon said. "There is now talk of another downtown hotel, new residential complex on 11th Street, new office complex on State Street, new health and education facilities near the medical campus and new restaurants at both ends of the TIF development.
"The changes we made in operations and ownership of the Stadium Park Plaza has made an amazing difference," Buchanon said.
— Follow city government reporter Wes Swietek on Twitter @BGDNgovtbeat or visit bgdailynews.com.