Housing Partnership Inc. hopes to soon finalize its purchase of a nearly century-old warehouse on West Broadway that has long been vacant, with big plans to then partner with other groups to revitalize the historic property into a mixed-use development.
HPI President Andrew Hawes told Insider Louisville that his nonprofit, which is dedicated to developing affordable housing, expects to complete the purchase of the building at 1405 W. Broadway by early December, which is on the National Register of Historic Places. Once that is done, HPI has tentative plans gather funding and nonprofit partners to restore the property and provide affordable housing for older residents along with commercial office space.
Noting that out-of-town owners have done nothing with the property over the last decade as the building has fallen into further disrepair and is now regarded as an eyesore, Hawes said it was important to get the building that was once a key economic hub in the Russell neighborhood into the right hands.
“We feel it’s a very important asset and something needs to be done to that building, and we’re taking the lead in trying to get it repurposed,” he said.
Built in 1921, the building was first used as a factory for the National Candy Co., which employed 350 workers and produced 125,000 pounds of candy daily. It was then purchased by the Louisville-based Axton-Fisher Tobacco Company in 1932, which turned it into a warehouse that helped produce the country’s first menthol cigarettes.
After Phillip Morris bought Axton-Fisher in 1944 and discontinued the factory, Hawes said that the building was turned into a military processing station for new entrants and then provided mapping services for the Department of Defense. A church eventually bought the property but wasn’t successful in turning it around, and two companies in New York and Florida that have owned it since 2006 have “just kind of sat on it.”
HPI submitted a proposal for the project to Louisville Metro Government this fall as part of the JPMorgan Chase AdvancingCities Challenge, in which coalitions of public, private, philanthropic and nonprofit compete for $500 million worth of grants. The administration of Mayor Greg Fischer indicated that it would pick one local nonprofit’s proposal to write a letter of support for a grant of up to $3 million for, but it recently chose the proposal submitted by Metro United Way.
While HPI was not successful in landing that particular grant, Hawes said it still hopes to fill in that funding gap by reaching out to local philanthropic foundations, in addition to other sources of funding that they listed in the AdvancingCities application to the city.
Hawes noted that the Fischer administration had provided HPI with a loan of $300,000 that would help with the acquisition of the property, and he hopes that HPI may be able to receive funding from the Louisville Affordable Housing Trust Fund (LAHTF) and Louisville CARES to support potential affordable and workforce housing for older residents on the top two floors of the building.
Earlier this year, HPI was awarded with $2.5 million from LAHTF for five affordable housing projects, the most of any developer in the city.
HPI also hopes to receive as much as $12 million in tax credits for restoring the historic property and as part of the federal New Market Tax Credit Program that incentivizes investment in low-income communities.
HPI’s application to the city stated that it hoped to leverage nearly $8 million in equity from Opportunity Zone funds, part of the new federal program that incentivizes investments in designated low-income census tracts with large capital gains tax breaks and deferments.
Hawes said that HPI had not already identified a specific Opportunity Zone fund that was willing to put forth that kind of money, but said it could still be a possibility for one to be involved as the project starts to take form.
Among the project’s nonprofit partners, Hawes said that OneWest and Catholic Charities have discussed interest in using some of the new office space to run some of their programs from, as would HPI itself. While the plan is still subject to change, the nonprofit is considering moving its corporate office to one of the building’s floors, along with its community resource center for homebuying education and credit counseling.
“Right now we’re trying to find the funding scheme that makes sense, and once we find that we can go back out to the partners and actually talk space and dollars,” said Hawes.
If HPI’s plan comes together, the new development will have company along this section of West Broadway. The $3 million Russell Neighborhood Health Center is currently being built next door to the vacant factory along 15th St., while the $100 million project to build a headquarters for Passport and a new YMCA at 18th and Broadway is scheduled to be completed by 2020.