(Editor’s note: This post was updated at 11 a.m. on May 9. Insider Louisville was asked to keep confidential the names of Laura Lee Brown and Steve Wilson until a public announcement.)
This post also was updated at 2 p.m. on May 2. Due to incorrect information, the original post misrepresented the role of Chester Musselman. Musselman is not one of the potential investors in the Whiskey Row properties. His only interest in the deal is possibly working with Todd Blue to develop a hotel on the block.)
It’s one of the pivotal downtown blocks whether you’re talking about economic development, nightlife or the sports scene, and its fate is coming down to a few precious days.
The big question is, who is this mysterious group of investors city officials and civic leaders have assembled in hopes of their purchase of the Iron Quarter/Whiskey Row properties on Main Street, just east of the new KFC Yum! Arena?
Insiders tell Insider Louisville that Jim Welch, co-chairman of the Louisville Downtown Development Corp. is leading the effort to bring in a group of investors to make an offer on the strategic properties, which could be demolished after May 6 as threats to public safety.
Welch also is Brown-Forman Corp. vice chairman, and sources say the core of the potential investor group is made up of the family that owns controlling stock in the Louisville-based liquor giant.
LDDC officials did not return calls for comment.
Sources said Laura Lee Brown and Steve Wilson, who own 21c Museum Hotels and both Owsley Brown II, retired Brown-Forman chairman, and his cousin, Owsley Brown Frazier, are working with the city to develop a plan to buy the seven buildings from Louisville businessman Todd Blue, chairman and CEO of Cobalt Ventures, then find a use for them.
Others involved include movie producer/developer Gill Holland, according to sources with direct knowledge of the negotiations.
His family, who owns Musselman Hotels, have had “discussions” with Todd Blue during the last 18 months about possibly becoming a hotel developer/operator on the Whiskey Row block, said Chester Musselman.
(Insider Louisville reported last February that Blue was negotiating with a hotel company to put a W brand hotel in Iron Quarter.)
Blue bought the Whiskey Row buildings from 111 W. Main St. to 119 W. Main in 2007 with a plan to convert them into Iron Quarter, a $48 million project with hotels, offices and restaurants, using only the facades from the original Victorian-era buildings. The project never materialized, and Blue sued the city for the right to demolish the buildings.
Blue did not return calls and emails for comment.
The Fischer administration struck a deal with Blue last February that would – if no viable alternative materializes – allow Blue to demolish the deteriorating buildings next month and use the land as a surface parking lot for as long as five years.
No one involved in the investor group would go on the record by name.
The group brings a mix of development and redevelopment experience.
The Musselmans have developed several hotel properties in Louisville including the Courtyard by Marriott Louisville Downtown at Second and Main streets, across from the Whiskey Row/Iron Quarter.
Holland led the investors who purchased the Wayside Christian Mission properties on East Market Street, then redeveloped them into the NuLu arts, business, restaurant and retail hub.
Insiders say buying the Whiskey Row buildings isn’t as problematic as what to do with them.
In an April 22 story, Courier-Journal reporter Sheldon Shafer quoted city officials, including Fischer spokesman Chris Poynter, as saying an unidentified group of city-led investors intended to try to keep the buildings intact, not just preserve their facades as in Blue’s Iron Quarter plan.
Multiple sources say ideas about what could come out of the project include a complex anchored by a hotel, though there is no consensus.
Louisville’s most high-profile redeveloper, who has been assisting city officials by reviewing whether federal tax credits might help defray redevelopment costs, says such credits are key.
The block as a whole has more potential if whoever buys the seven Blue properties keeps the historic buildings and uses federal/state historic tax credits to build a project that’s more “exciting and dynamic,” said Bill Weyland, who redeveloped the Henry Clay hotel and the Glassworks building, among other projects.
Weyland is managing director of City Properties Group, and a partner with Val Jones in the Whiskey Row Lofts project on the west end of the Whiskey Row block at 127 to 131 W. Main St.
“There’s a big advantage to doing the tax credits rather than tearing down the buildings,” Weyland said.
The National Parks System, state historic preservation offices and the Internal Revenue Service oversee the federal Historic Preservation Tax Incentives program. The program has helped spur $58 billion in preservation and community revitalization projects across the United State since the 1970s, according to the NPS website.
“There’s a huge difference between what you can achieve using those tax credits” and trying to do a conventional project with conventional financing, Weyland added. “It’s going to be hard (to raise financing) in this environment.”
Keeping the buildings also makes sense aesthetically, according to Weyland.
Incorporating the existing buildings into a restoration/integration will produce a project “that will have a better scale and will be a lot more attractive than tearing them down” and replacing them with a giant development, he said. “You’re talking about one of the really well-scaled streets in the city, and that’s Washington Street.”
Weyland said he believes five of the seven buildings are salvageable, and two will have to be torn down.
He sees the Whiskey Row project happening in phases, with the restoration of the buildings first, then a second project built on the property after the buildings are taken down.
He’s “absolutely opposed” to a parking lot or parking structure, which Weyland said isn’t needed.
“If you call them and ask them, they can’t fill up the parking underneath the (KFC Yum!) arena right now.”