Kentucky Tourism Cabinet Seeks OK For at Least $125M in P3 Projects

Two Expo Center hotels, Natural Bridge lodge among potential projects

By Ed Green
P3 Kentucky Editor
Five Kentucky tourism destinations could get at least $125 million in capital investments and improvements from private partners if the Kentucky General Assembly approves provisions in a state budget bill. The proposed projects do not include funding from the state.

The bill, HB 200, was introduced in the Kentucky House of Representatives last month and assigned to its Appropriations and Revenue committee. Among the items in the bill are five potential public-private partnerships from the Kentucky Tourism, Arts and Heritage Cabinet. The list includes three in Louisville.

The five P3 projects listed call for:

  • Construct Lodge and/or Resort Facilities at Yatesville Lake.
  • Renovate or construct Lodge Facilities at Natural Bridge.
  • Construct Agri-Plex at Kentucky Exposition Center.
  • Build Gate One Hotel at Kentucky Exposition Center.
  • Construct Hotel Development at Kentucky Exposition Center.

Flexibility needed

According to Chris Reece, the projects are listed because the legislature must approve P3 projects valued at $25 million or more.Reece is executive director of the cabinet’s Office of Finance, The projects have no value assigned because officials don’t have specific plans in place and have not issued RFPs.

“We wanted to make sure we have options,” Reece said, adding that most of the projects listed are conceptual.

He confirmed that the Yatesville item relates to an unsolicited proposal the cabinet received last year and posted publicly. That P3 notice is required by law. The proposal suggested allowing a partner to build, finance, operate and maintain a resort facility at Yatesville Lake. Reece said state officials cannot say if a RFP is being considered for that or any project. He added the Cabinet would not be able to consider a P3 project of more than $25 million without legislative approval.

The four other projects listed in the budget bill indicate areas where Cabinet officials see potential demand or opportunities for infrastructure investments, Reece said, and having legislative approval to consider P3 projects would provide flexibility.

“We want to assure an expedient process” to issue an RFP or respond to an unsolicited proposal, he said.

Advocates for P3s

Officials in the Tourism Cabinet, led by Cabinet Secretary Don Parkinson, have been strong advocates for the use of P3 models since Kentucky passed enabling legislation in 2016.

Parkinson has said Kentucky’s 49 state parks alone need more than $240 million in improvements – funding the state currently doesn’t have available to make the parks more of a draw for tourists and Kentucky residents.

Reece noted that areas like Natural Bridge State Park and the Red River Gorge area in Eastern Kentucky are popular tourist destinations where many have discussed improving amenities and where the parks system likely doesn’t have the capacity to invest on its own. Natural Bridge State Park currently operates Hemlock Lodge, but it has only 35 rooms.

“Red River Gorge is a growing hot spot for younger travelers so we wanted to give ourselves some flexibility,” Reece said.

He added that similar thinking went into the decision to add a potential Gate 1 hotel and Agri-Plex at the Kentucky Exposition Center in Louisville. Both projects have been discussed in recent years. The second hotel was listed in the budget bill because officials recognize a growing need for hotels in the area, Reece said.

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