Fiscal Court Passes Industrial Bonding Ordinance To Lure Business Ventures to County

New Owner of Park Mammoth Resort Looks to Enter Agreement With County

Darren Doyle, story:
In an effort to promote more industry in Edmonson County, the local fiscal court heard from bond attorney Gil Johnson on Monday, who explained the benefits of industrial bonds and how they might work in the county.

The discussion was based on previous conversations with County Attorney Greg Vincent and the new owner of Park Mammoth Resort, Preetesh Patel, who is currently working on plans for a completely new facility.

Industrial bonds are normally issued by local governments for the purpose of helping a business obtain more desirable financing and property tax breaks during their first years. The bonds help the business get started, and in turn, the local government benefits by the creation of jobs and other revenue brought on by the business' customers spending other money in that area.

County Attorney Vincent said that in his research, he found that it's very feasible that the local government could issue IRBs to Park Mammoth without opening liability to the county.

Attorney Johnson, who told the court he'd been part of over a billion dollars in industrial revenue bonds (IRBs) in Warren County, explained how they could help Edmonson County.

"The process is simply this: the county, at some point in time, identifies a project, a private project, to come into the county that would stimulate economic development, create jobs, and boost such things as tourism, for example," he said. "At that stage of the game, the local government can decide that we will provide an incentive to help the project move forward. And in this case, the only incentive available is the issuance of industrial revenue bonds. What does that do? Well, that allows the county to take title to the property, lease it back to the developer who would develop it, at no obligation or responsibility to the county. But because the property is technically owned by the county, under KRS chapter 103, specifically 103.285, a property tax abatement is provided."

Mr. Johnson went on to explain that county governments don't generally cut out the property taxes for the life of the project, and they can be constructed so that the business must pay 100% of local school taxes, to which about half of Edmonson County property taxes go (45.9 cents per $100). The business normally also makes a commitment to a certain number of full time jobs and investments in other ways to the community, all of which can be agreed upon by both parties.

"You are doing it solely for the purpose to facilitate the developer's project, the construction and acquisition of the project, and provide some incentive to allow him to go forward--to give him some break for a period of time, whatever that time period that you agree with the developer," he said.

Judge Executive Wil Cannon asked Mr. Johnson if any other taxing districts would be included in tax payments from the developer with IRBs.

Mr. Johnson said that no other taxing districts would be included in the developer's tax payments, which in addition to school taxes in Edmonson County are state, county, library, ambulance, extension office, health department, and conservation taxes.

"The county owns the property and improvements," he said. "You have a deed to it. Because you own it, you can't be assessed a tax. There would be technically be no tax at the state level, no tax at the school level, any of your other taxing districts at the county level, whatever other taxing districts are involved. So what occurs is, we enter into what we call a payment in lieu of taxes agreement and we identify what taxes would be paid."

He then said that IRB holders pay 100% of the required school taxes in Warren County and Bowling Green, which are billed separately. In addition, he said that from past experience, businesses are free of the property taxes (aside from school) for 10 years, then pay 50% for the next 20.

County Attorney Vincent pointed out that since about half of an Edmonson County tax payer's property tax bill goes toward local school tax, the county would not be out a great deal in property tax abatement. Vincent also noted that the location of Park Mammoth is near the Edmonson County Industrial Park, and an all-new resort in the area could lure more businesses to the industrial park.

"And also, you could look at this as a trial run for these incentives going forward, because if this seems to work out, this is going to be something our Industrial Authority is going to be able to use in the future to help lure other businesses here," Vincent said. "They've been at an impasse at times, trying to come up with ways to get certain businesses here because other communities were offering things that we couldn't match. Now this will put us on equal footing or better footing than some once we adapt to this process and they understand and can use it going forward."

A business like Park Mammoth would also pay recreational taxes for Parks and Rec and transient room taxes for Tourism. The former owners, The Fortress Group, LLC., filed for bankruptcy in 2019. After failing to turn the business around as they had said, they shut their doors and left around $60,000 in room and rec taxes still owed to Edmonson County.

Mr. Patel spoke regarding how he feels this will benefit everyone involved.

"We're not just bringing the cabins and the hotels and things like that," he said. "There are going to be other local industries that come about, whether it's attractions, restaurants, or other things. There's gonna be somebody that gets inspired to create another business that's also gonna generate more tax revenue and bring more people to the area. You know, like the golf course. I think it'll just be multiple things that'll bring people here, and (they) will want to stay longer to do more things here."

A motion was made by Magistrate James Vincent and seconded by Magistrate Edd Rich to approve resolution EC22-07, which will allow the county to move forward in taxable industrial revenue bonds for Pratishta, LLC., (Park Mammoth Resort).

The motion passed unanimously with the exception of Magistrate Corey VanMeter, who was absent from the meeting.