(Editor’s note: This is the fourth installment of “The Next Nulu,” a series of posts looking at emerging areas in Louisville such as Portland and Norton Commons with the potential to attract commerce and residents, changing Louisville’s neighborhoods dynamic. Terry Boyd and other Insider Louisville reporters contributed to this post.)
Lindsey McClave and Zach McClave are the kind of well-paid and well-educated professionals city econ-dev officials fantasize about when they brainstorm ways to bring residents downtown.
The funny thing is, they’re already here, having made a sizable bet on the future of downtown – an apartment at the Fleur de Lis on Main at Main and Preston streets.
The McClaves are part of a rapidly growing, though nearly ignored segment – young professionals sold on the fun, the convenience and – dare we say it? “the glamour?” – of the downtown lifestyle.
They go east to the NuLu shops and restaurants on East Market Street and along Main Street and the waterfront.
They love the Bats games and the summer concerts at Waterfront Park, meeting after work for a drink at Against the Grain, or just the edginess of a downtown walk.
And they like being insulated from some of the problems that affect the rest of the community.
“The whole bridge situation didn’t affect our lives one bit,” says Zach, an account supervisor at Creative Alliance. “Gas prices don’t affect us greatly.”
But, they say, there are lots more opportunities for downtown retailing … and still a long way to go.
Louisville’s much-debated problems developing its downtown has many (including Insider Louisville) criticizing the city’s leadership as behind-the-times, disinterested or lacking some kind of civic and commercial spirit. (Dr. Harvey Sloane – back in what? the 1970s? – was the last mayor to live sort of downtown in Old Louisville.)
The fact is, a less-than-developed downtown puts Louisville in the majority of all large American cities.
Yes, a minority of smaller cities – Indianapolis, Charlotte, N.C., and Portland, Ore.– have been aggressive about building their downtowns.
But Indy has national shopping center developer Simon Properties as the downtown catalyst. Charlotte has big bank headquarters such as Bank of America and Portland has an unusual civic determination as well as a huge center-city focused high-tech component.
Atlanta and Cincinnati continue to wrestle with the problem, their downtowns still shells, with diminishing retailing and lack of everyday amenities such as supermarkets and movie theaters.
But we collectively are talking about downtown a great deal more, and the new mayor has become an advocate for development ideas. However, the challenge remains that this is a three-legged stool and, until we even out all the legs, we won’t reach maximum density.
The first leg is commercial development – office buildings – and our skyline is equal to most other cities of a half-million population. (Many prefer to use the metropolitan statistical area census of 1.3 million. But if you do that, you have to factor in our horizontal expansion to the suburbs, which runs counter to downtown development.)
The second leg is downtown retail, which we ain’t got … yet.
The third leg is residential development, and Louisville has a surprising amount of that.
According to real estate broker Gant Hill, president of Gant Hill & Associates, there are 4,300 downtown residents and that number is “growing rapidly.” Hill can quickly tick off all the properties – condominium and rental – that exist from Broadway north to the river and east to the Interstate-65 overpass.
Names such as the Crescent, Bennington, Guthrie, Worthington, Art Space, Henry Clay, Bycks Lofts, Harbison, Molee, Kentucky Towers, Fleur de Lis, Glassworks, Levy, Mercantile Gallery, Preston Pointe, Waterfront Park Place – and that’s only a very partial list.
More to the point, these run from upper middle income to luxury.
“At the Henry Clay, 11 condos selling for $215 a square foot – ranging in price from $150,000 to $750,000 – sold out immediately,” said Hill.
Hill, who knows a great deal about Louisville’s real estate marketplace, says developing condo properties may not be the best way to go right now.
“It’s hard for buyers to get financing,” he says. “We need apartments.” And while that might sound low-rent (pun intended), he says it’s not.
“Louisville has always been a market with plentiful housing, and that makes it relatively inexpensive, but things have changed. Housing isn’t inexpensive anymore. You used to be able to rent an apartment for $350 a month. That same apartment would likely cost $650 today.
“Condos that sell for around $200 a square foot are rented for up to $2,000 a month.”
If the residential space fills out, it will address the third leg of the stool: downtown retail development. “We have a healthy convention and tourism business in Louisville,” says Hill. “But if a conventioneer has a pen blow up in the pocket of his white shirt, where is he going to go to get a new shirt? He’ll probably have to go out to Mall St. Matthews.”
Lindsey McClave agrees. She’s sales manager for 21C Museum Hotel downtown, so she’s sensitive to the needs of out-of-town tourists.
“People visiting here like to go shopping,” McClave says. “They want to be able to walk somewhere for boutique clothing stores or a Macy’s or a TJ Maxx.”
“More retail convinces other Louisvillians that it’s all right to come downtown to shop and, eventually, to live downtown,” she says. “And that leads to more retail and more residential development, which leads to higher property values and a better quality of life downtown.”
She and her husband have high hopes for retail development on South Fourth Street, between Muhammad Ali and Broadway, the corridor anchored by The Seelbach on the north and The Brown on the south.
So does Gant Hill, but he’s convinced that it won’t happen until a mindset is changed. “This is a city that has always honored local, independent entrepreneurs,” he notes. “But when it comes to downtown development, we too often wait for the out-of-town money – someone from another market, to step in and show us how it’s done. And that has never worked.”
Hill does feel we now have a plan in hand, the South Fourth Street Merchandising Plan. “There’s a huge opportunity to develop that area like we’ve developed The Highlands or Frankfort Avenue or any other area that works,” he says. “Whatever makes sense – destination retail, theatres, sandwich shops, hair salons, upscale clothing, urban clothing, whatever someone feels comfortable to sell.”
But he insists we give these retailers attractive terms to come in there.
“Oxmoor Center charges tenants $35 per square foot. Our local specialized retailers, the kind downtown needs – eclectic stores, selling Louisville art, t-shirts, fleur-de-lys, pottery – can’t afford that,” Hill said. ”Someone needs to come up with a plan that offers a lower cost of occupancy or other incentives – subsidized rent, maybe, or assistance with tenant improvement dollars.
“Just think,” says Hill, “that you’re starting from scratch and you have the opportunity to bring in two world-class hotels, then augment that with some great local restaurants, and a state-of-the-art athletic facility plus an iconic racetrack and a great university.
“Don’t you think some really good retailers would want to be in that mix?”