Saturday, November 6, 2004

Developers pointing fingers


Tax break critic got one of his own, company says

By Mike Rutledge
Enquirer staff writer

CRESCENT SPRINGS - They have lawsuits pending in three separate courts, and this week the developers of the proposed Buttermilk Towne Center also took their arguments against another Northern Kentucky developer into the court of public opinion.

Bear Creek Capital LLC has been clearing land for the $56 million Towne Center project on Anderson Road.

Greg Scheper, director of acquisitions for Bear Creek, said developer Matth Toebben - one of the parties suing over tax incentives Crescent Springs made available for the project - received similar incentives from Crescent Springs in the mid-1980s.

Not exactly, responded Covington lawyer Leonard Rowekamp, who represents Toebben, the city of Fort Mitchell and others suing to stop the Crescent Springs project.

Fort Mitchell, Toebben and others contend that tax breaks for Bear Creek - they estimate the developer will avoid paying about $535,000 per year in property taxes because Crescent Springs has title to the land - can artificially lower the Towne Center's costs.

Scheper said Toebben should be familiar with that, because an agreement he had with Crescent Springs in the mid-1980s over the same redevelopment area allowed him to lower costs at an IGA store that was on his property.

"He put an IGA grocery store in there, and drove out ... the other competing grocery store," Scheper said.

There was a big difference, Rowekamp countered: While Toebben sold tax-free municipal bonds with the city's help that cut federal taxes and saved perhaps 2 percentage points on interest rates, Toebben's properties continued to pay local property taxes to the schools, county and other entities, Rowekamp said.

"Keep in mind: We have a $56 million development," and the infrastructure costs are much greater than Toebben faced, Scheper said. The tax savings for Bear Creek are less than 1 percent per year of costs, compared to 2 percent for Toebben, he said.

But Bear Creek's tax advantage hurts schools and other entities, Rowekamp said. Of the taxes Bear Creek would avoid, more than $300,000 a year would have gone to schools, with more than $84,000 going to libraries, he said.

Rowekamp said Covington has reached a deal with Lexus RiverCenter similar to the one between Crescent Springs and Bear Creek. But Covington announced the auto dealership would make payments in lieu of taxes to the county and schools, he said.

"Bear Creek is not doing that," Rowekamp said.




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