Once upon a very depressing time, large multi-family developers were only willing to invest in Class A apartment complexes in Louisville’s far suburbs.
That’s about to change dramatically.
Indianapolis-based Cityscape Residential has just taken a giant step toward investing as much as $40 million in a Class A complex on blighted land just east of NuLu at Lexington Road and Payne Street.
The proposed 300-unit Axis Apartments cleared the Louisville-Jefferson County Metro Planning Commission last week. The next step is a vote on the project by Metro Council. The apartments are not yet on the Metro Council docket, but Cityscape partner Kelli Lawrence said she believes Axis will get a hearing by July, with a closing on the purchase of the 30-acre parcel by August.
At that time, Cityscape would be able to move forward with financing. The developer has built big urban multi-family projects in the Midwest as part of joint venture transactions and public-private partnerships. Axis partners currently “are in conversations” with potential investors, including equity groups and banks, which Lawrence noted is typical for this stage of the project. “At the end of zoning, we lock in those groups, the lenders and equity partners.”
She declined to identify potential partners in Axis, which will take an investment between $35 million and $40 million, she said. According to our research, Axis would rank as the biggest investment in an urban Louisville complex by an out-of-town developer. Even including suburban Class-A apartment complexes, it would still be in the top 5 ranked by total investment in the past year.
A number of elements in the proposed project have changed, including the number of units. The plan is for Axis to have 300 units in three, five-story buildings with underground parking on the parcel, which is just across from the Distillery Commons office complex. As we told you last March, the original plan was for 330 units in four-story buildings
The change came after Cityscape asked for waivers on the height limits, Lawrence said. Historic documents showed the request was in line with earlier uses of the property, which had been part of Distillery Commons, with the original buildings more than 100-feet in height. Three buildings are left from what was once a massive distillery complex, including a former rick house that’s part of a planned redevelopment by developer Ashley Blacketer.
Lawrence said documents show the proposed Axis parcel on the north side of Lexington Road had once been connected by over-street bridges to what is now the Distillery Commons office development on the south side, as well as to a railroad spur from which the bourbon was shipped.
The site, which was most recently a manufacturing facility, has been abandoned for years.
Also, instead of landscape islands spaced out around the property, Cityscape got permission to aggregate the landscaping together for biocells and more usable areas than small islands, Lawrence said.
So far, the plan has been well received by neighbors and zoning agencies, she said.
As we’ve reported, Louisville is one of the Tier-2 Midwest cities on the radar of national developers, which Lawrence confirmed.
“Louisville is one of the markets we do like,” she said. “Pricing in coastal markets is so aggressive now, and yields are shrinking … ”
The opportunity to redevelop a 30-acre parcel with proximity to prime urban neighborhoods, “all immediately adjacent,” is rare, Lawrence added. “Axis is literally a mile from all the greatest places in Louisville … NuLu, Clifton, downtown and the riverfront parks.
“To find that amount of land in an urban area … there are not too many opportunities to do that.”
Lawrence added that an adjacent 20 acres on the west side of the Axis parcel is also prime land for redevelopment. “It might be undiscovered right now. But everyone I’ve talked with remarks about how close and walkable the surrounding areas are … the center of a great urban area.”
Axis apartments will go from $700 per month for efficiency/studios to $1,600 per month for two-bedroom units.
Here are other planned projects for a little perspective on where this is all headed.
Axis is likely to come on-line in 2015. By next year, there could be 1,019 units planned or under construction in the urban neighborhoods of NuLu, Clifton and along the Ohio River, by our count:
- 310 at NuLu, with 173 market-rate apartments under construction at Hancock and Jefferson streets by City Properties.
- A proposed conversion of the Ready Electric property in Clifton at Frankfort and Bellaire avenues. Indianapolis-based Milhaus Ventures executives and Louisville zoning attorney Glenn Price, with Frost Brown Todd, tested the waters for a proposed 102-unit complex during a neighborhood meeting on Feb. 12.
- Axis Apartments, 300 apartments at Lexington Road and Payne Street on the abandoned Progress Rail property.
- RiverPark Place, with 329 units through 2015 on River Road, just east of downtown next to the Waterfront Park system.
- Distillery Commons at Lexington Road and Payne Street, with 100 units planned. This is a partnership that includes Ashley Blacketer and Chad Middendorf.
- The Woods at Lexington Road, less than a mile east of the Axis property, where Poe Companies is building 72 units.
There’s more we’re hoping to tell you about this month. Stand by.