To make Passport Health Plan’s move to the west side possible, Louisville Mayor Greg Fischer wants the city to spend up to $6.4 million to help Passport acquire land the city used to own but sold to local developers for $1.
A city councilman told Insider that he is questioning the prudence of the deal and that he wants a local committee to investigate it.
Passport, a nonprofit health system that administers Medicaid benefits for Kentuckians, announced last week that it would move its headquarters to the vacant lot southwest of the intersection of 18th Street and Broadway. City and company leaders hope the planned state-of-the-art health and wellness campus on a long-abandoned site will foster revitalization in the neglected neighborhood of West Louisville.
The site of the proposed development has been beset by a history of proposed — but failed — developments and financial deals that have entangled city government, a payday lender, a giant corporation and lawsuits by preservationists and a small Indiana bank.
In 2001, Philip Morris closed its cigarette manufacturing plant on the 23-acre site in part because tobacco-related litigation settlements were pushing up cigarette prices and lowering demand. The closing eliminated 1,400 jobs.
According to articles from Broken Sidewalk and WDRB, the city acquired the property for $100 and sold it to Louisville-based NewBridge Development, owned by Frank and Teresa Bridgewaters, for $1 in 2006. The deal required NewBridge to prepare the site for redevelopment, including razing the remaining Philip Morris structures. Sheffield, England-based Euro Dismantling Services demolished the Philip Morris buildings for $2.3 million.
Also in 2006, NewBridge’s parent company, also owned by the Bridgewaters, The Mardrian Group, proposed a $40 million mixed-use development for the site.
TMG struggled to find tenants but garnered interest in 2010 from the YMCA. However, that project fell apart, too. The YMCA ultimately decided to build its facility on the other side of Dixie Highway.
County records show that on. Sept. 12, 2012, NewBridge obtained a $1.59 million loan from Gus Goldsmith, who is known for offering high-interest loans to people who cannot qualify for traditional bank loans. The 18th/Broadway property was the collateral on the loan.
Goldsmith released NewBridge from the loan on Oct. 1, 2015, the day after NewBridge obtained a $1.7 million loan from Cincinnati-based Cheviot Savings Bank, with the property again serving as collateral. Cheviot was acquired by Greensburg, Indiana-based MainSource Financial Group last year.
MainSource this year sued the Bridgewaters in Jefferson County Circuit Court, saying the developers owed $1.7 million on the 18th/Broadway loan.
In 2013, Walmart negotiated with city leaders to build one of its big box stores at the site. However, the project stalled when a group of preservationists, planners and activists filed a civil lawsuit against Walmart, Louisville-Jefferson County Metro Government and NewBridge. The retail giant backed out of the deal in October.
Passport Health leaders soon after began exploring a move to the site. CEO Mark Carter told Insider last week that the nonprofit needed more space, and that West Louisville would be a great location because many of Passport’s clients live there.
Last week, the city said that it had offered Passport the same incentive package it offered to Walmart: a $500,000 job creation grant and $762,000 to help the health care company acquire and prepare the land.
To make the Passport project a reality, the city also plans to forgive a $1.1 million loan obtained by the Bridgwaters in 2013 to buy additional pieces of property in the area to increase the likelihood of the Walmart project.
In addition, Fischer plans to ask the Metro Council to approve the creation of a tax increment financing district, which is projected to generate another $2.8 million to $4 million to help Passport pay for the land acquisition.
In total, the city could be paying up to nearly $6.4 million to help Passport obtain a property that the city acquired for $100 and sold for $1.
A GOP spokesman said the Republican caucus could not comment on the project yet because it had not received the mayor’s proposal.
Metro Councilman Brent Ackerson, D-26, told Insider that his team is looking at various aspects of how the property changed hands over the years and said that he could not judge the prudence of the deals with Passport and NewBridge until that investigation is completed. However, he said, the deals have to be “thoroughly examined,” preferably by the metro budget or government accountability committee.
“The question is, did we do this the right way and the most efficient way,” Ackerson said.
The councilman, who has questioned similar property transfers previously, said that when the city sells a piece of land to be developed, it should insist on a provision that allows the city to reacquire the property for the same price if it needs the property down the line.
Fischer’s office did not reply to an emailed inquiry. Jeff Mosley, Louisville’s director of economic growth and innovation and the city’s chief negotiator on the deal, could not be reached Friday or Monday.
Teresa Bridgewaters told Insider via phone Friday afternoon that she did not have time to talk because she was “headed out the door.” She said she did not know when she might have time to talk. She did not return a phone message left on Monday.