Two years after preliminary approval, the Newport Board of Commissioners passed an industrial revenue bond valued at $7 million for new housing on Ann Street.
Led by nonprofit Urban Community Developers Inc., the Ann Street Project will add 11 new owner-occupied single-unit homes on the 1000 block of Ann Street on the west side of Newport — between 10th and 11th streets.
The project is financed by the Catalytic Fund and Heritage Bank, and is backed by Corporex, a local private investment and development firm.
Joe Klare, Catalytic Fund Chief Operating Officer, said this isn’t an affordable housing project.
“It's important for the communities to have housing that's extremely affordable for our lowest wage workers, but also places for people to live that can afford to spend more money in the community and support those jobs that are going to be created in the community,” Klare told WVXU after Monday’s meeting.
Construction had already begun ahead of yesterday’s vote, but developers were still waiting for the final approval on the industrial revenue bonds.
Industrial revenue bonds are tax-exempt bonds issued by the government to private businesses. They are most commonly used to attract large manufacturing companies and create jobs, but have been also used to encourage housing development.
In exchange for this property bond, the developers are agreeing to pay some of the new homeowners’ property taxes for the next 30 years.
Per Kentucky law, when a city wants to issue these bonds, the state must approve it before the city’s final vote of approval. The state approved the Ann Street project two years ago but the city had not given that final approval — until Monday night’s meeting.
The two-year delay
Richard Spoor, an attorney on the project,told commissioners this was because of a delay in getting third-party assistance. Because Urban Community Developers is a charitable nonprofit, the organization had no significant assets and could not get a loan on their own to go ahead with the project.
That’s when Corporex stepped in and put up equity to guarantee completion of the homes.
“It took a while for that to happen, because it's a risky proposition for that entity that's putting up the money, so that's why there was a time difference, but it's now full speed ahead,” Spoor said after the vote.
Spoor told commissioners the tax break would encourage future buyers.
“It goes to the homeowner to induce the homeowner to purchase these homes,” Spoor said. “Obviously the purchase of the homes reduces the debt and reduces the risk to the corporation.”
The bond paired with the tax break passed, with one city commissioner, Ken Rechtin, opposed. In 2024, Rechtin had voted “no” on the initial indictment resolution, alongside then-Vice Mayor Elizabeth Fennell. He said his concerns are still there.
“My concerns are: Are we rapidly, under the guise of a 501c3, changing the fabric of the neighborhood by creating housing that gentrifies the neighborhood quickly?” Rechtin told WVXU.
Online real estate listing platform Zillow estimates the value of neighboring Ann Street houses to be anywhere from $100,000 to $250,000. Corporex told WVXU they have not released the full details of the plan, and could not confirm the final cost of each housing unit. But both Rechtin and Klare estimated the price to be $575,000-$600,000.
“I hear negative things about the idea that somebody else buying a $600,000 home on Ann Street gets a 30% reduction in their taxes for the next 30 years,” Rechtin said. “But I've owned my home on Thornton and nobody's helped me.”
‘Not homogenized in their income’
Rechtin said on one hand, the new homes would increase the property value if any current owners are looking to sell. But it wouldn’t give a property tax break for homeowners already living in the neighborhood.
Klare said the value it would add to the neighborhood is important. He said the project would benefit homeowners on the street looking to renovate.
“They will provide a comparable sale that allows for somebody down the street who's looking for a construction loan to renovate their home,” he said.
Klare also believes the neighborhood does not have one definitive income bracket, and the value of the homes will help diversify the homes available for purchase.
“It creates a good opportunity for somebody to move into the neighborhood where there is no, there wouldn't otherwise be a home, so it's a great way to kind of diversify our neighborhoods and make them more economically sustainable.”
More details about the project are expected next month.
