The creative financing for the Museum Plaza project in Louisville is the focus of a public hearing Wednesday morning in Frankfort.
The Kentucky Department of Local Government is expected to apply for the $100 million loan after the hearing and an opportunity to receive formal comments on the draft application.
The $465 million, 62-story skyscraper project in downtown Louisville has been stalled for two years, in part because of the unavailability of private financing.
The Department for Local Government plans to submit an application for Museum Plaza under HUD’s Section 108 Loan Guarantee Program. The agency would serve as a "pass-through" agent for the funding; the project and its developers are responsible for repaying the federal loan in full.
The justification for using HUD money is that the state says residents of surrounding counties will be targeted as potential permanent employees at the development. The Community Block Development Grants of the surrounding counties are officially the collateral for the loan, however the Museum Plaza developers are personally guaranteeing the loan.
The state says this is the first time this program has been applied for by the Commonwealth, though it has been used on more than 1,200 projects across the nation since 1978, including the Boston Convention Center Hotel project and the Cadillac Hotel Project in Seattle, Wash.