Tuesday, March 11, 2003

Tax breaks closer for Newport

Levee, Hofbrauhaus would benefit if lawmakers act today as expected

By Patrick Crowley
The Cincinnati Enquirer

FRANKFORT - After weeks of back-room negotiations, the Kentucky General Assembly appears poised to approve legislation that would make possible $11.25 million in tax breaks for two entertainment attractions in Newport.

Lawmakers are expected to pass a bill today that will ultimately give sales tax breaks over the next 10 years to Newport on the Levee and the Hofbrauhaus beer garden across the street.

The Levee would get the $10 million boost it needs to build its next phase: a hotel. And the only authentic Hofbrauhaus outside of Munich would reap about $1.25 million.

The funds, authorized under a state law that allows breaks on sales tax to major tourist attractions, have been in limbo since last July, when the legislature left Frankfort without passing a budget.

"I've been told not to worry, that we will vote (on the tax breaks) Tuesday," state Sen. Damon Thayer, R-Georgetown, said Monday. "I've been told we are going to get this done."

Once the legislation is approved both projects would still have to receive approval from the Tourism Development Cabinet for the tax breaks. But lawmakers have said that approval is expected but hinges on passage of Senate Bill 91.

Newport on the Levee is planning a $40 million expansion that includes construction of a Hilton Garden hotel. Developers of the project have said without the tax break the expansion will not be built.

Hofbrauhaus, a $5 million project under construction across Third Street from Newport on the Levee, will still be built without the tax break. But developers began work on the restaurant and entertainment venue - the only one of its kind in North America - under the assumption the tax break would be granted.

Because of the state's $400 million budget deficit, Northern Kentucky lawmakers have had a difficult time persuading their colleagues, including Senate Republican leaders, to support the tax break legislation.

For weeks, House Majority Caucus Chairman Jim Callahan, D-Wilder, Sen. Katie Stine, R-Fort Thomas, Thayer and others have built support for the legislation.

The final bill is coming through a complicated maneuver that includes attaching amendments dealing with the projects to a larger economic development bill and the calling of a conference committee where differences in House and Senate bills are hashed out.

"It hasn't been easy," said Stine, who has been shepherding the bill through the Senate. "But it looks like we are going to get it done."

E-mail pcrowley@enquirer.com.

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