Change is coming to Midland Avenue, the near east side corridor stretching from Main and Vine streets up to Third.
Three developers — Phil Holoubek and his Lexington’s Real Estate Co. (LRC), statewide non-profit Community Ventures and former Lexington vice mayor and franchisee Mike Scanlon — are poised to overhaul the area with help from a tax-increment financing district.
Holoubek’s Main + Vine development, a $10 million to $12 million mixed-use project at the corner of East Main and Vine streets, will bring a five-story building with retail on the first floor and 50 one- and two-bedroom apartments above. About half of the 15,000-square-foot first floor will be taken by Old National Bank.
Underneath Main + Vine will be a privately financed garage with 48 spaces. Original plans were for the parking authority to build a 160-car garage on the site, but the Division of Water Quality was unwilling to allow the garage to sit on top of a Town Branch culvert that runs underground.
Community Ventures, a client of Holoubek’s, owns several parcels along Midland and currently is focusing its attention on building a mixed-use development on the corner of Third Street and Nelson Avenue, across from the Isaac Murphy Memorial Art Garden.
“[Community Ventures] really are our ideal, dream client,” said Holoubek. “And the reason is, they care so much about Lexington’s communities.”
Kevin Smith, the president and CEO of Community Ventures, has put together six neighborhood teams, including a history and cultural committee and an art committee, to make sure the project goes smoothly.
“I hope that we can do justice to this neighborhood by telling the story of the East End with our development,” said Smith. The building at Third and Nelson will have 6,000 square feet of retail on the first floor and 16 residential units above, with five being affordable housing units and 11 set at market rates.
Moving into two of the three first-floor retail spots will be a coffee shop and a pizza shop. While it’s too soon to announce specifics, both are said to be locally owned.
Construction is expected to begin by January, with the building open and occupied by September 2017.
Across Third Street, in the existing Community Ventures incubator building, a 4,000-square-foot sit down restaurant will move into the first floor.
Community Ventures has held several community meetings to gauge the neighborhood’s opinion and allow them to participate in the process.
Other areas in the TIF district owned by Community Ventures include the triangle lot just south of Third Street, where their incubator building currently stands, as well as the large grass lot about halfway up Midland. All totaled, Community Ventures is looking at about $50 million to $60 million in redevelopment.
The block of land on the north side of Short Street stretching to Eastern Avenue is owned by Scanlon and overlooks Thoroughbred Park. Scanlon is currently cleaning up the corner of Midland and Short and working on plans for a mixed-use development that may include local retail and offices.
As Short Street heads toward Eastern, the grade steepens and, according to Scanlon, is the highest plane in downtown Lexington.
“Plans have always capitalized on making [the corner of Midland and Short] iconic, making the best use of that beautiful view, and then making it fit in with and merge into the neighborhood that surrounds it,” said Scanlon. “You don’t need to have this big sudden shock of good-looking, high-end expensive stuff and lower income neighborhood stuff , because that’s not fair to anybody. It’s got to be something that everybody wants.”
In the case of the Midland TIF, the state picks a recent year and tallies up the payroll, property and sales taxes generated by all the parcels within the TIF district.
Once the area has been developed with new residential units, offices and retail space, it is expected generate new taxes greater than what was generated before; in other words: incremental taxes.
A percentage of those new taxes will be used to reimburse the developers for their investments, and the state will cap the total amount they are eligible to receive.
With the Midland TIF, the final step of deciding what award they will receive is currently in progress. Whatever that amount is, developers have up to 20 years to generate that much in new taxes.
“Many people incorrectly think you’re awarded all of the TIF dollars upfront, but that’s not the case,” said Holoubek. “The owner or developer still puts all of their investment into the public infrastructure and then hopes that they will be able to recover that via increased tax receipts. If the incremental tax receipts don’t occur, then the investor doesn’t recoup that investment.”
In an effort to avoid crass gentrification, Community Ventures has put together loan funds to enable residents who are currently renting to own homes and businesses in the area.
“If we don’t do that, then what will happen is some of the people that live outside the area now that own land there will sell it out to others, and they will raise rents and cause people to move that live there now,” said Smith. “We need to move as many people who live in that neighborhood now into ownership position.”
Looking ahead, Holoubek also wants to make Midland Avenue safer and more pedestrian friendly and is hoping for slower traffic speeds, narrower lanes, on-street parallel parking, crosswalks and a tree-lined median down the middle with one traffic lane in each direction instead of two.
According to Scanlon, the Midland Avenue corridor is a gateway to downtown Lexington, connecting Winchester Road and the interstate to the downtown core, and it should be an accurate representation of what Lexington has to offer.
“That corridor’s day is about to begin,” said Scanlon. “It’s been getting ready for a long time, and I think it’s just about ready to really become an important district in Lexington.”