NEWPORT, Ky. — The Newport Independent Board of Education voted unanimously Wednesday to support two major economic development projects planned for the City of Newport that are projected to generate $6.75 million for the Newport Independent Schools over the next 30 years.
The board voted in support of the city using Industrial Revenue Bonds to help finance the construction of The SkyWheel planned for the Newport riverfront and the purchase of the Newport on the Levee entertainment complex by Cincinnati-based North American Properties.
Through a previous agreement, the board of education and the city approved Industrial Revenue Bonds for the development of The Academy on 4th, a $38 million 200-unit apartment building under construction on the site of the former Fourth Street Elementary at the corner of Fourth and Monmouth streets.
“We are excited about the opportunities these projects will provide for our students, their families and the entire Newport community,” said Newport Board of Education Chairwoman Ramona Malone. “The ongoing working relationship between the Newport schools and the city of Newport continues to prove that ‘teamwork makes the dream work’.
“These projects will not only bring significant funding to the schools, generate new jobs for our students, residents and others but will stir up the desire for others to come and be a part of a great community,” said Malone.
Under Kentucky law, Industrial Revenue Bonds are permitted to be issued by a local government to help finance construction of major projects. Typically, the project is exempt from paying local property taxes during the duration of the bond issue.
But through the three agreements reached by the Newport Board of Education, the City of Newport and the developers, the schools will be paid $225,000 a year for 30 years – the length of the bond issues – for a total of $6.75 million through what are known as Payment In Lieu of Taxes (PILOT).
The PILOT payments represent new money coming to the school system, said Newport Independent Schools Superintendent Kelly Middleton. Currently, neither the school system nor the city receives PILOT payments from the Levee’s current owners.
The new revenue also means the school system will avoid the loss of $250,000 in annual funding from the State of Kentucky, which equals $7.5 million over the life of the bonds.
Newport school board members as well as Newport city officials hailed the agreements as an example of the strong working relationship that exists between the Newport schools and the City of Newport.
“It’s great that the city and school board were able to partner and come to an agreement that is beneficial for everyone,” said Newport school board member Matt Scott. “We’ve experienced declining enrollment due to other projects in the city, which decreases our state funding. The revenue that will be generated from these projects will help us to continue funding programs for our students without risking the financial wellness of our school district.”
The Newport schools and the City of Newport have long had a strong working relationship. Past partnerships between the city and the school district has generated more than $200 million in development over the past eight years.
“Everyone who is a member of the Newport City Commission and the Newport Board of Education loves our city and wants it to prosper, grow and thrive,” said Newport Mayor Jerry Peluso. “That’s the true motivation for us coming together and working on bringing jobs, investment, visitors and new residents to our community.”
The 230-foot tall Newport SkyWheel being developed by Koch Development of St. Louis will be mounted on a pier extending toward the Ohio River between the Newport Aquarium and Mitchell’s Fish Market restaurant on the plaza at Newport on the Levee. Work could begin on the project later this year with a scheduled opening in 2019.
Newport City Manager Tom Fromme said he looks forward to continued success and prosperity in working with the Newport Independent Schools administration and the Newport Board of Education.
“In the near future, I envision several major projects moving forward,” Fromme said. “These projects will result in jobs, a better quality of life for all Newport residents and produce both tangible and intangible benefits for our school system.”