In 1997, the non-profit economic development group Lexington United optioned 100 acres of land to form a business park. The goal was to create high-wage manufacturing jobs in Lexington.
In 2005, Commerce Lexington financed the purchase of the remaining acres of land and completed key infrastructure through individual land sales.
We set a goal of creating $140,000 of new payroll per acre to prevent companies from simply moving from one location to another while giving us the opportunity to address existing business expansion needs.
Today, the Blue Grass Business Park is full with advanced manufacturing companies such as Big Ass Solutions, Tiffany & Co. and Webasto. The park is home to a significant amount of research and development and has achieved tremendous results:
• 1,477 employees with an average annual wage of more than $44,500;
• More than $678,485 in payroll per acre;
• An indirect benefit of nearly 1,800 jobs and nearly $57 million in additional payroll; and
• Approximately $10 million in state and local tax revenues annually.
As we celebrate our community success, we also must begin planning for the future by addressing two concerning issues.
First, our payroll tax, which makes up the great majority of the city’s revenue, is flat. That means less money for the rising cost of basic services and quality- of-life initiatives.
The city has invested in fantastic projects to make Lexington a more attractive place for people to live, work and play. Town Branch, CentrePointe, the Purchase of Development Rights program, renovations of the Old Courthouse, Distillery District, schools and 21c Hotel- Museum are several key initiatives that benefit from tax revenue and private philanthropy.
Second, we are running out of land that is truly available and ready to develop.
After analyzing and removing parcels that have been sold, are under development, not on the market, or are not realistic for our clients, there are fewer than 15 reasonable sites of at least 10 acres scattered throughout Lexington. That means we are unable to accommodate prospective employers who need larger tracts of land.
Internationally recognized site location consultant Mike Mullis spoke to 200 statewide professional economic developers last fall and emphasized the need to be prepared with shovel-ready sites: “Economic developers and cities should have business parks with 200-plus acres of land zoned with infrastructure in place.”
Kentucky Economic Development SecretaryTerry Gill notes: “It’s imperative for communities to be developmentready, especially given the speed with which private corporations make decisions about expansions and new locations. If communities do not have large plots of available, shovelready land, they will likely not be considered. In today’s international business climate, it’s essential that communities seeking growth prepare for success with properly zoned land.”
Unfortunately, the expansion land zoned for economic development has not worked well for economic-evelopment projects over the past 20 years. The land is very expensive itself and includes additional exaction fees, driving the price up further.
Regional governments in each of the surrounding counties, in contrast, have consistently invested in publicly owned land. We are proud of our regional successes. However, they result in missed direct jobs and increased tax base for Lexington. They also are a missed opportunity to employ residents in parts of Lexington where unemployment runs in the double digits.
Consider three projects that located outside Fayette County in recent years: More Than A Bakery, Amazon Kindle and Lakeshore Learning would have generated an estimated annual local tax revenue of almost $2.2 million.
The natural beauty of Lexington, including its horse farms, is a recruiting tool that we utilize and must protect. But, we must also find land that will create jobs and help fund important programs.
By working together and thinking creatively, we can not only protect our important assets but strengthen them by attracting new jobs and investment. Available sites that are ready for development will be a critical factor in whether a company locates — or even remains — in Lexington.
Now is the time to invest in this form of infrastructure by creating a new 250- to 500- acre publicly owned business park.
Carla Blanton is chair and Gina Greathouse is executive vice president of Commerce Lexington Inc.