ASHLAND, Ky. — Mayor Steve Gilmore said the city’s acquisition of the old Ashland Oil building is a “piece of the development puzzle,” but is also a “gift” the city won’t accept if a potential business deal breaks down.
Gilmore and the rest of the Ashland Board of City Commissioners agreed Wednesday to accept Louisa Community Bank’s donation of the 1401 Winchester Avenue property.
Some members of the community had questioned why the city would take ownership of the dilapidated building after The Daily Independent first reported the deal Tuesday evening. Gilmore said Wednesday he’d received calls from local residents asking similar questions, and he wanted the “public to know where we are on this.”
Community and Economic Development Director Chris Pullem was called to the podium and explained in vague terms the motivation behind acquiring the Winchester Avenue property.
“It’s really about timing. We have a developer who has a certain timeline they need to meet. That timeline is approaching its end,” said Pullem. “In order for us to show that we are going to have skin in the game with them, they (the developer) need us to take this action today. … This action taken by the board will allow them to proceed.”
Pullem said the situation is “delicate” because when city officials “deal with major development projects, there’s a lot of confidentiality involved.” He said the deal “could potentially be a very good news story” for the city.
Gilmore hinted at what the city plans to do with the property during the meeting. “I’m going to go a little bit further. The property is what’s important, not the building,” he said. “We need a parking garage and convention center there. And you can read into that what you may. I hope you read into it like we do.”
Gilmore said the city’s acceptance of the Ashland Oil building will be contingent on the larger business deal.
“The caveat for us and you as taxpayers is that we’re not bound to it,” he said. “If this deal doesn’t work, we don’t accept the building.”
Pullem said the city wants to “put protection in place to make sure we don’t take on a liability.” The contract with the Louisa bank will include language that ensures the city can return the property to the bank if the business deal breaks down, Gilmore said.
Commissioner Matt Perkins asked Pullem if the city would be responsible for the building if the business developers involved in the larger business deal back out “midway through their project.” Pullem said at that point, the city would have complete ownership of the building.
The seven-story building has changed hands several times, and it has remained vacant for long stretches since it was first built over 91 years ago. It was bought by the bank last summer for $330,000 after the building’s previous owners failed to pay nearly $72,000 in taxes on it.