LEXINGTON, Ky. - Upon hearing news that some financing was included in Gov. Matt Bevin's proposed biennial budget, business leaders today expressed their appreciation to Gov. Bevin, the General Assembly, and all the agencies and organizations that lined up in support of the proposed Lexington Convention Center expansion and renovation.
As part of his budget, the Governor proposed for the state to invest $60 million in the Lexington Convention Center as part of a $250 million investment supported by the Lexington Center Corporation, Lexington-Fayette Urban County Government, VisitLEX, Commerce Lexington Inc., the Downtown Development Authority, the Downtown Lexington Corporation and the Bluegrass Hospitality Association. This transaction with the state involves repayment of the $60 million in state funds. This new method of state participation will allow Lexington to move forward now on an important economic development project that will benefit the city, region and state.
It is not a direct appropriation. Rather, it is an investment partnership that includes a guaranteed payback.
According to LCC President & CEO Bill Owen, "The importance of the new Convention Center as an economic engine for the continued growth and prosperity of the city of Lexington, the Bluegrass region and the state of Kentucky cannot be overstated. We are appreciative of the support that is lining up behind this project from our city and state leaders.
"We are still working to identify those revenue streams that will provide the state a return on its investment, which could include growth from a variety of sources such as the transient room tax, sales tax and occupational tax. Once identified, those new revenues will ensure repayment over 30 years, and we believe it will significantly exceed the investment."
The Lexington Convention Center expansion will include a new, contiguous 100,000 square-foot exhibit hall, with the potential for future growth; a new 22,500 square-foot ballroom; and an additional 30,000 square feet of meeting space.
"Simply maintaining the status quo with our convention center is a costly option for Central Kentucky," said Commerce Lexington Inc. President & CEO Bob Quick, citing the LCC's development study. "Without the expansion, we face a loss of nearly $29 million in economic activity at our hotels, restaurants and hospitality business. This expansion represents an investment in Lexington and the Central Kentucky region that will pay dividends for years to come."
Under its current space limitations, the convention center is only able to market to about 65 percent of potential national convention business, according to an independent study by CSL (Conventions, Sports and Leisure, LLC).
"Lexington and Central Kentucky experienced a record-breaking year for tourism in 2015, and we are poised for another year of strong growth," said Mary Quinn Ramer, president of VisitLEX. "Our two signature industries - horses and Bourbon - continue to attract visitors from around the world. We must expand our convention center now to capitalize on that momentum and build upon Lexington's place as a world-class destination.
"Our future is very bright with this type of investment in our community."
Owen said the CSL study showed that with the expansion, economic activity generated by the convention center would grow to more than $57 million annually.
"We believe Governor Bevin and our legislators recognize the economic necessity of this investment in public infrastructure," Owen said. "We look forward to enjoying a Lexington Center designed for the 21st century."
In addition to the $60 million in state funding, the remaining 75 percent of the proposed $250 million Lexington Center Corp. expansion would be funded through local funds. Under a proposal before the General Assembly, the legislature is also being asked to give the Lexington Fayette Urban County Council the authority to increase the transient room tax.