By Katheran Wasson
These days, Lexington – and downtown in particular – has taken on a spirit of revitalization. From swanky new restaurants to local breweries, historic houses returned to their former glory and increasing numbers of festivals and community events, change is coming at a brisk pace.
Current, planned and recently completed construction downtown now totals $1 billion, according to the Lexington Downtown Development Authority, and the area now boasts 172 restaurants and bars. The impact goes beyond fun and food: The arts and culture industry contributes $18.6 million annually to the local economy.
Jeff Fugate, president and COO of LDDA, said several factors have sparked increased development and revitalization downtown and in surrounding areas.
For starters, the World Equestrian Games in 2010 created the momentum to complete languishing projects, he said. It spurred construction of the Fifth Third Pavilion, which has become a focal point for community events – from Thursday Night Live to the Lexington Farmers Market – right in the heart of downtown.
More than 7,500 people pass through the pavilion on an average Saturday night, according to the LDDA. Just around the corner on Short Street is a burgeoning restaurant district, including longtime Lexington favorites such as Dudley’s and Cheapside with new additions, including Table 310, The Village Idiot and Shakespeare and Co.
Head a little farther out, and you’ll find folks dining on Jefferson Street, enjoying a beer with friends in the Distillery District or scarfing down a doughnut (or two) on North Limestone.
“Thanks to the courage of those entrepreneurs to get started, what we’re seeing now is a shift,” Fugate said. “We’re still coming out of the economic downturn, and they’re letting prospective developers know that the water is just fine.”
Attracting outside developers
The economic outlook is starting to thaw after several tight years, and Fugate says the good news is that Lexington is starting to see more interest from out-of-state developers.
“They love what they see in Lexington,” he said. “We’ve got a highly educated workforce and an economy that didn’t tank out during the recession.”
Several public revitalization projects underway could also boost the confidence of private-sector developers, signaling the potential for success in the area, he said.
Adjacent to downtown, the University of Kentucky has broken ground on $1.8 billion in new construction and renovation in the past three years alone. Bluegrass Community and Technical College opened a new campus off Newtown Pike, and Transylvania University recently completed a $10 million renovation of its athletic facilities on Fourth Street.
Fugate also highlighted the $41 million 21c Museum Hotel renovation of a century old landmark on Main Street – it opens spring 2016 – new life in the Distillery District, anchored by Ethereal Brewing and The Break Room; and The Square, a $2.3 million renovation of the former Victorian Square shopping center, which includes retailer Urban Outfitters and restaurants such as Pies and Pints, Saul Good and Tony’s of Lexington.
There are new glimmers of hope for a stagnant project, dubbed CentrePoint, which has left an entire city block empty since 2008. In August, a New York development group announced it had taken over the long-stalled project with aspirations to build a landmark structure designed to become a new home for city government – which now operates in a 95-year-old former hotel.
Fugate said a day rarely goes by that someone in the community doesn’t ask him about the empty city block. He doesn’t know what the future holds for the project, but he knows the outcome is crucial.
“In its previous form, (CentrePointe) was an ambitious and complicated project, and we can argue all day over how it came to be and how it should have happened,” he said. “Looking to the future, that property is in the heart of our downtown, so it’s important that we see a high-quality development go into that space – it has the potential to be transformative to our downtown.”
With all the new businesses popping up, it should come as no surprise that residential real estate is in high demand downtown and in surrounding neighborhoods.
According the Lexington-Bluegrass Association of Realtors, in the past two years nearly half of all residential properties on the market within 3 miles of the central business district were there less than 30 days. The average sale price was $184,122 in 2014 – a 14 percent jump since 2011.
“We’re really excited, like homebuyers are, about what’s happening downtown,” said Larry Freels, LBAR’s 2015 president. “We’re seeing the remodeling and repurposing of houses in that area, and a lot of it’s driven by young families. They like the urban setting, they like a walkable and bikeable area, and they like all of the new restaurants and businesses opening up in the area.”
Citywide, housing supply is an issue. Fayette County has approximately three months of inventory on hand, which is about half what a healthy market typically requires, Freel said.
“If buyers aren’t ready to pounce, they lose out,” he said. “On the other hand, sellers are starting to see multiple offers for properties, and, on average, homes are selling for 98 percent of their list price. I’d encourage anyone who’s been sitting on the fence to go ahead and sell.”
In terms of new residential construction, Freels said, Lexington is “still playing catch up” from the recession. But new builders are getting into the business, so there’s hope for
“That’s a part of the market we’d like to see some more of, particularly in the first-time-buyer price range,” Freels said.
Freels’ advice to Lexington residents for the coming months is: If you’re interested in a property, buy fast. If you’re thinking about selling, start the process now – it’s definitely a seller’s market.
“We are convinced even more than ever that Lexington is one of the finest places in the country to call home,” he said.
Beyond the demand to buy, there’s also a need for additional rental options for young professionals at a variety of price points, Fugate said.
The good news is that $259 million in residential or mixed-use development has recently been completed or is underway in the downtown area.
“We’ve traditionally been a city of homeownership, but if you look at our workforce, more of our young professionals are not going to spend their entire careers in Lexington,” Fugate said. “They’re still an important part of the economy, so we need to think about their housing needs. They want walkable neighborhoods, downtown living and higher-end rental options.”