Developer: Construction of CentrePointe could begin in next 10 days

View from Vine Street showing the hotel, left, restaurant and office building, right. CentrePointe designs released October 2, 2013. CMMIARCHITECTS

Construction of the long-delayed CentrePointe project will likely start in the next 10 days, developers for the project said Tuesday.

The Urban County Council unanimously approved an agreement Tuesday that would require CentrePointe developers to set aside $4.4 million in case parts of the project were not completed and the site in downtown Lexington had to be restored.

Dudley Webb, the CentrePointe developer, said he expects to pick up permits for excavation this week. The project which includes an office building, hotel, an apartment building and an underground parking garage has been stalled since 2008. Excavation on the 700-space underground parking garage will begin in the next two weeks and likely won't be completed until early spring, Webb said. The office building will be completed first, because a major tenant needs to be in the office building by May 2015, Webb said. Webb has not named the tenant but has said it is a national engineering firm.

Including financing costs, the price tag for the entire CentrePointe project is estimated to be $393.9 million.

Tuesday's agreement was the last hurdle Webb had to clear before being issued permits for the project. The project which includes an entire downtown block has been controversial after buildings were razed and financing for the project fell through. The empty block is now fenced-in green space.

Mayor Jim Gray said that the agreement signed Tuesday will give the city and the public assurances that if the project is not completed for any reason, there is money to restore the site.

"We are hopeful that the project will bring jobs to the city. That's important," Gray said. "My job is to encourage job creation on the one hand but also to protect the city." Gray said that if for whatever reason the project is not completed, the agreement provides security that the city will be able to restore the block to its current condition.

The state approved tax increment financing, or TIF, for the CentrePointe development last summer. Tax-increment financing will use tax revenues generated from the project to reimburse developers for the cost of the 700-space garage. The costs eligible for recovery include $31.9 million to be spent on a parking garage and $16.9 million from the financing of it.

But the Urban County Council approved stiff guidelines in July for the Webb Companies in order for the development to go forward as a TIF project. Key provisions in that agreement include: Webb must show city officials that he has financing for the project, submit to the city a geotechnical report on the feasibility for the underground garage, and certify that there is enough sewer capacity for the development.

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Developer: Construction of CentrePointe could begin in next 10 days