What’s the matter with downtown Louisville?

Why isn’t there more rental housing available? Why aren’t more employers relocating into those large office building vacancies? Why no retail? Why so many surface parking lots? Why so many long stretches of urban blocks devoted to tattoo parlors, wig shops, pawn shops or, often, nothing much at all?

And why don’t we have a light rail system delivering hordes of suburbanites to their downtown jobs, to the Yum! Center, to Slugger Field, Thunder Over Louisville, the Kentucky Center for the Arts, and all those terrific downtown restaurants and bars?

The obvious answer is that all development requires capital, which means developers must either invest or borrow. And money flows slowly and only to where there’s a history that promises a good chance of return.

CITY propertiesBill Weyland, managing director of CITY Properties Group, has reconfigured downtown Louisville almost all by himself. Even with a romantic vision of repurposing the city’s grand old architecture into residences, museums, hotels, retail and office space, he knows that nothing happens without a master plan – and without plenty of investment capital.

But a key word that comes up often in conversation with people like Weyland – developers, architects, builders and investors – is “density.”

“If you look at cities on the move, they’re cities that encourage density,” he said recently during a freewheeling conversation with his CITY Properties partner, Barry Alberts, and Louisville architect and veteran urban planner and preservationist Charles Cash.

“Density,” in urban planning-speak, means areas where people congregate – where they work, live, eat, drink, shop, hang out, walk their dogs, stroll and run. It’s all part of that urban energy that creates and invites more projects – apartments, hotels, stores, office buildings and, especially, mixed-use projects – to get developed.

Sounds pretty obvious. So, with all the progress that downtown has realized in the last few years – the Yum! Center, an influx of restaurants, some smaller-scale residential projects like Whiskey Row and the Henry Clay Building, and the whole distillery phenomenon – why do we still have so many underutilized properties?

Because money is cautious and conservative. “Nobody comes in and builds all these big hotels until a few people build smaller hotels and they fill up,” says Weyland. “Nobody comes in and builds high-rise apartments until someone builds small-scale apartments and they fill up. Somebody has to take those things on early and demonstrate that there’s a market.”

A typical suburban home and family in the 1960s.

A typical suburban home and family in the 1960s.

Sometimes, that starts with the perception of a market – or the misperception. “For many years, the thought was that there was something wrong with you if you lived in an apartment,” says Alberts. “It was OK for young people starting out, but eventually you had to have that home of your own, that 1-acre lot, the backyard, the barbecue grill. That suburban mindset has made it difficult to deal with the kind of vibrancy and mass transit that build growth in the city.”

Now, though, comes the understanding that not everybody wants a single-family home or the suburban lifestyle. And that’s not been an easy mindset to turn around.

“After World War II, the prevailing culture, encouraged by the government and private investment, made it easy to create the suburbs, to turn a cornfield into a subdivision,” Cash says. “I don’t think we’ve collectively figured that out in reverse. The suburban paradigm is universally accepted – it’s good, and that’s just the way things are. The development community understands it, the buyer community understands it, the lending community understands it.”

So, he says, if we want to see urban neighborhoods and downtowns grow and prosper again, we have to figure out the exact mix of things that need to be a part of city life, on a consistent basis, and make those things as universally accepted as life in the suburbs used to be.

It’s been accomplished before in Louisville – a dynamic mix that includes jobs and housing, recreation, retail and a diverse population. “That’s Bardstown Road,” says Weyland. “So we know what it looks like.”

When's the last time you stopped by the Slugger Museum? | Courtesy of the Louisville Slugger Museum

Photo courtesy of the Louisville Slugger Museum.

That mix has been the model for growth that has begun occurring in the Central Business District, much of it spurred by Weyland’s and Alberts’ CITY Properties Group – the Slugger Museum, the Glassworks Building, Whiskey Row Lofts, ZirMed Towers, The Henry Clay Building and others.

“We’ve tried to start with existing buildings, because when you restore an existing building that’s been abandoned or underutilized, you take care of a couple of things,” says Alberts. “You create that impetus for the infill in surrounding blocks, creating the streetscape and a more dense urban fabric.”

But downtown growth is not all market-driven, nor always moved by cultural and economic considerations. Often, says Weyland, you need help from a higher power – the government. There are code and zoning issues and historic preservation concerns.

“In 2014, Frankfort passed a special, temporary tax credit for projects in excess of $15 million in qualified rehabilitation expenses,” says Weyland. “That credit is one of the reasons the Starks Building is being redone. It’s one reason Whiskey Row was being rebuilt after the fire. Those wouldn’t have happened without the tax credit.”

He also credits the tax benefits for the rehabilitation of Louisville’s large supply of old industrial buildings, like the Germantown Mill Lofts and his own Edison Center, the former LG&E building on the western hem of Old Louisville.

“There was never a way to make those projects happen, because of the size of them and the unproven nature of the market,” he says. “I’ve been advocating a 20 or 25 percent tax credit for 10 years or more. Cities that move ahead are places where tax credits are enhanced. You have to create the incentives that make investment desirable, not just for the developers but also for the banks.”

There are other changes to downtown that this blue-ribbon panel of urban developers would like to see: such as switching one-way streets back to two ways, so our downtown streets don’t become racetracks for the flight back to the suburbs at 5 p.m.; changing our acres of surface parking lots into something more productive and attractive; and, of course, introducing some form of improved mass transit, to encourage easier non-automobile commuting.

But the reality is that these things take time, planning and some purposeful intervention.

For example, says Alberts, whatever kind of mass transit we might want won’t be viable until we have high-density development around those bus stops and stations.

As for the parking lots, “You have to transfer those sites into the hands of people who will actually do something with them,” says Weyland. “But right now, there’s little incentive for the owners. The taxing policies are minimal and it’s cheap to operate a surface parking lot, so the value of income is greater than the value of the development potential.”

Overall, says Weyland, we need the discipline to focus on limited areas first. “Small developments begin to make the land more precious and attract capital investment in what then become white-hot areas. In five years, market drivers begin to spread all around those areas.”

Peace of the Earth and Gifthorse in NuLu

NuLu shops along East Market | File Photo

Cash points to NuLu as a prime example. “It started with three blocks on Market Street. Then, incrementally in small projects, one building at a time, we saw the impact begin to spread, up to Main Street, down to Baxter. The whole place is now considered a good place to invest.”

“A lot of folks are already recognizing that opportunity,” agrees Weyland. “So Bristol Development, out of Tennessee, is building its 260-unit residential development on Main and Clay. The Edwards Company, out of Ohio, is building on the site of the old Phoenix Hill Tavern. Strategic investment in dense corridors and zoning opportunities were created so that something like these developments could occur.”

And much of it started, Weyland says, when the Metro Housing Authority made Clarksdale into a Hope VI revitalization project, which got it $40 million in grant money and turned it into Liberty Green. “People in the medical district saw they could go to Market Street for lunch,” he says. “Five years from now, Market Street will be a tremendous neighborhood linked from Broadway into Butchertown, all from a little seeding here and a little seeding there.”

For these experts, the formula for downtown seems clear. And it starts with density.