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Downtown Paducah Hotel Bonds Approved by City

Downtown Paducah Hotel Bonds Approved by City
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By West Kentucky Star Staff
Aug. 26, 2015 | PADUCAH, KY
By West Kentucky Star Staff Aug. 26, 2015 | 10:12 AM | PADUCAH, KY
A new hotel in downtown Paducah is one step closer to becoming a reality.

Durng their meeting Tuesday, the Paducah City Commission approved two ordinances pertaining to the Paducah Riverfront Hotel, the upscale 123-room Holiday Inn planned for construction adjacent to the Julian Carroll Convention Center.  

The first ordinance approved authorizes the issuance of up to $12 million in industrial building revenue bonds.  An industrial revenue bond is the financing method chosen by the hotel developers, Paducah Riverfront Hotel, LP.  Kentucky law requires the city’s approval for the issuance of the bonds; however, the state ultimately approves the bonds with a bond hearing by the state local debt officer set for September 15.  

The private bond sale involves Independence Bank as the sole purchaser of the bonds.  Paducah Riverfront Development Authority executive director Steve Doolittle said the debt is not the city’s.  It is private between the hotel developers and the bank.  With this type of bond the sponsoring government, in this case the city, is not responsible for the bond repayment, and the bonds do not affect the city’s credit rating.  

This type of arrangement is common with extremely large projects since the city will own the property and lease it back to the developers. There will be no property taxes, except for the payments in lieu of taxes made to the city and to the Paducah Independent School District.  Additional parking for the hotel will be located on a portion of the city-owned property that once housed the Executive Inn.  

Regarding the approximate 100-space parking lot, the Paducah Board of Commissioners approved an ordinance where the city will lease to the developers a portion of the city-owned land adjacent to the Julian Carroll Convention Center on the river side of the floodwall for $1 per year. 

In July, the Paducah Board of Commissioners approved the development agreement between the City and Paducah Riverfront Hotel (LinGate Hospitality).  The $18 million dollar project consists of a five story hotel, that will include meeting spaces, a pool, and fitness center in addition to the restaurant, Another Broken Egg.  

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