Daily Independent (Ashland, KY)

Local News

February 12, 2013

West Liberty gets $30M for recovery

WEST LIBERTY — With the one-year anniversary of the tornado that devastated this Morgan County city fast approaching, the effort to rebuild and recover in its wake has received a major boost.

In what could be the largest recovery project in Kentucky’s history, Gov. Steve Steve Beshear and U.S. Rep Hal Rogers on Monday announced West Liberty and Morgan County will receive nearly $30 million from state and federal sources and private contributions to help rebuild from the devastating storm of March 2, 2012.

The funds will be used to five major building projects in the county, all of which are considered “critical to stabilizing services and restoring a sense of permanency to the community,” according to a news release from Beshear’s office. Some of the new structures will replace ones damaged by the tornado; others will be all-new.

“The destruction I witnessed in Morgan County last spring was unlike anything I have ever seen,” Beshear said. “I can tell you that Kentucky’s heart was broken by what our fellow citizens experienced. Immediately, we joined forces with our local and federal partners, and together, we began to restore services and rebuild West Liberty and Morgan County.  But, what will really make West Liberty and Morgan County feel like home again is reconstructing those key places that mark a hometown, like the courthouse.  When complete, these projects will serve as symbols to citizens of better things to come.”

The projects that will be funded through the initiative are:

‰ Construction of a new Morgan County Recovery Center, $9.4 million.

‰ Reconstruction of the Morgan County Office Building and Community Center, $6 million.

‰ Reconstruction of the old Morgan County Courthouse, $2.4 million.

‰ Construction of a new Morgan County Extension Office, $2.3 million

‰ Construction of the new Morgan County parking structure, $3.8 million.

The new Morgan County Judicial Center, which was under construction at the time of the storm, also will be rebuilt, officials said. However, those costs will be covered by insurance proceeds, so dedicated funding was not necessary. Some project funding from the Administrative Office of the Courts will be used for furnishings and fixtures for the building.

“On March 2, 2012, we witnessed first-hand the worst disaster that Morgan County has ever seen.  On that day, we vowed that we would see the recovery of this community through to the end,”  Morgan County Judge-Executive Tim Conley. said. “This day marks a significant step in the recovery process, and I want to thank Governor Beshear, Congressman Rogers and all of the federal, state, and local officials and residents who are working together to rebuild this community.”

Rogers said the  Morgan County recovery project might be the commonwealth’s largest ever.

"This multi-million dollar project represents hope for the future of Morgan County and applauds the resiliency of Kentuckians," he said. "Organizations from across the commonwealth and people of all ages, Boy Scouts and Disabled American Veterans alike have been a part of the recovery process in West Liberty, volunteering time, food and various resources to get this community back on its feet. Together, we join in celebration for the progress of Morgan County and look forward to revisiting the new, improved West Liberty very soon."

According to Beshear, before any of the projects could move forward, Morgan County needed more bonding capacity.  To accelerate the rebuilding, the Kentucky Transportation Cabinet stepped in and satisfied $2.8 million in old road bonds owed by Morgan County. That allowed the county to finance all the major projects at one time.

The availability of New Market Tax Credits has been instrumental in securing and leveraging complete funding for this recovery effort.  That funding source accounts for $9 million of the total pool.

The New Markets Tax Credits program is a federal tax credit administered by the U.S. Treasury.  The credit is a 39 percent tax credit spread over seven years, and it is designed to provide private capital in areas of the country that would not normally see that type of investment, such as rural distressed regions.  Each year, the U.S. Treasury allocates credits to organizations around the country called Community Development Entities (CDEs).

In developing the project, it was necessary to find credit allocations from CDEs and identify investors to purchase the credits in order to provide capital to the project.  JP Morgan Chase and U.S. Bancorp agreed to purchase the credits for this project. The investment by the banks enabled all of the various building projects to proceed because the funds helped leverage the other needed financing that was provided through grants and bonding, officials said.

The breakdown of the funding package is as follows: Insurance proceeds to Morgan County from KACo, $10.5 million; New Markets Tax Credits, $9 million; Morgan County Extension Office contribution, $2 million; Kentucky Administrative Office of the Courts, $1.65 million; Morgan County Fiscal Court bond proceeds, $1.5 million; FEMA Mitigation Grant, $1.5 million; LKLP, Inc. (Federal Transit Grant), $1 million; Kentucky Infrastructure Authority (City of West Liberty), $900,000; Appalachian Regional Commission, $750,000; and Community Development Block Grant, $500,000.

The Morgan County tornado was one of several that touched down in eastern Kentucky on March 2 of last year. It caused widespead destruction throughout the county and in West Liberty, the county seat. Five deaths in the county were attributed to the storm.

KENNETH HART can be reached at khart@dailyindependent.com or

(606) 326-2654.

 

 

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