The stated mission of Lexington’s Real Estate Company (LRC) is as foundational as it is aspirational—to transform downtown Lexington. Phil Holoubek, LRC’s founder, president and CEO, is known for thinking big. In 2000, Holoubek, a recent transplant from San Diego, founded the Lexington Young Professionals Association (LYPA). In 2010 he brought the Creative Cities Summit to Lexington, which added to the discussion of creative new directions for the city. He is co-founder and co-owner of Wild Duck, a “micro angel” venture capital fund that invests in local entrepreneurs and start-ups.
LRC’s award-winning projects include Main and Rose and Nunn Building Lofts, both mixed-use developments that add more than 120 residential units and 25,000 square feet of retail space to downtown. LRC also serves as the developer and consultant for Community Venture’s MET and Artists Village projects in Lexington’s East End.
Holoubek’s civic engagement has included board memberships with Lexington Center, Urban League of Lexington, Blue Grass Community Foundation, Downtown Lexington Corporation, and Big Brothers Big Sisters of the Bluegrass. In 2021, he was appointed to the board of Congress for the New Urbanism as treasurer for the Midwest region. Business Lexington spoke with Holoubek about his work with new urbanism and developments in the city.
What does the Congress for the New Urbanism focus on?
The CNU champions walkable urbanism. They supply resources, education and so on to create socially just, economically robust, environmentally resilient and people-centered spaces. It’s not about cars. It’s about a walkable community.
The principles aren’t new; they bring back original urban principles. An urban neighborhood once had everything you wanted within a fifteen-minute walk. If you picture the development of the United States, starting on the East Coast, cities like Boston, Philadelphia and others had everything you needed right there — groceries, shoe stores, repair shops and people living above their stores. Over time and as the country’s development went west, you ended up with a city like Los Angeles, which was based on the automobile and sprawl. There’s a book called “The 15-Minute City” that even talks about car companies buying up trolley lines to make people more car dependent.
What is driving the New Urbanism change?
We’ve started to see that younger generations — younger than me, Gen Y or Millennials and down to Gen Z — are getting their driver’s licenses later. They drive fewer miles, something like 30% fewer miles per person. Baby Boomers are empty nesters and, for the most part, haven’t moved on to senior housing or assisted living. A lot of Millennials may be married young professionals without kids. The two largest generations in our country both want to live downtown in a multi-generational, walkable community. So, there are some significant demographic changes going on in our country that are helping downtowns embrace new urbanist principles.
Please talk about your interest in downtown Lexington.
I moved to Lexington in 2000. I came from San Diego, which had active young leadership, with companies like Qualcomm there. When I moved to Lexington that wasn’t the case at all. We didn’t have a 24-hour downtown. Nobody was living downtown. It was an older average age that made up Lexington’s leadership. So that first year, as a volunteer endeavor, we started the Lexington Young Professional Association. There was such pent-up demand among professionals for change that we got 1,000 members in the first year.
We had a 21 to 39-year-old age group, and it was everything from tech entrepreneurs to attorneys and bankers. It was a great mix of young leadership. We very quickly started putting young professionals on boards of different organizations around town, and very soon, through LYPA, we had members serving on nearly 200 different board positions. The leadership of our city has changed dramatically.
Then came a series of articles in the Herald-Leader called “Misery for Rent”. I can remember like yesterday seeing this photo of a rental house where there was a picture of a toilet, but the toilet wasn’t connected to any plumbing. It just went to a crawlspace down below. It just was so offensive. That is what started Lexington’s Real Estate Company. As a quick background, my father was a pastor and my mother was a teacher, so those are my values. We bought a four-plex property on Wilson Street. Our goal was to improve the quality of rental housing and rent it out at market rates. We believed people would sooner or later leave far less quality housing and come to our housing, forcing landlords to either increase the quality of their housing or drop their rents.
Then I thought about young professionals and real estate, and there was nowhere to live downtown. We aren’t going to be a competitive city unless we give them the quality of life they demand. And one thing that young people were demanding, even then, was great housing in a 24-hour downtown with places to eat and drink. So, combining these needs of downtown Lexington and my real estate expertise, I had a do-good and do-well mission.
How important is community engagement with urban development?
It is critically important and a critical success factor, especially when working in a community where residents for many years or even generations might feel like their voices have yet to be heard. I remember a woman whose grandfather had, for 70 years, wanted a sidewalk in front of the house. She was overcome with emotion and cried as she told me the story of the sidewalk finally being put in. So, in working in a neighborhood where people haven’t had a voice, including them as part of the planning is critically important. It leads to a sense of ownership and shared vision. The Met development on the East End is an example. Community Ventures led that with at least two years’ worth of community engagement meetings.
What value do mixed-use developments add?
From the city’s perspective, the essential product is land. You have a finite amount of product, and you want to have enough revenue to survive as a city. To provide an appropriate quality of life for your residents, you need to maximize the amount of revenue you can get per acre per year. Mixed-use is not just incrementally more beneficial in terms of tax generation but exponentially more valuable.
In one case study of a city published in “New Urban News,” single-family homes generated maybe $2,500 of tax revenue per acre per year. Big box and strip malls generated $8,000 or $9,000 per acre per year. Then you get to mixed-use, and it was something like $100,000 of tax revenue per acre per year. As a local example, and this might not be the case anymore, at one point Main and Rose, with its 100 condos and retail space on the first floor, was the No. 1 property tax generator in all of downtown Lexington.
What is the state of LRC’s business today?
To date we’ve developed close to $100 million of real estate. Most projects have been sold as condos or developed for other clients. But we do own a mix of commercial, multifamily, and single-family homes in our portfolio. As far as affordable housing we’ve developed for others, the MET and the Artists Village in the East End are great examples. Those are projects we developed for Community Ventures. They are the owners of both projects.
The East End development connects to Midland Avenue. What are your views of developments there?
Midland Avenue has become a raceway where people cross Main Street, step on the gas, and race out of town. That six-block range from Main Street to Winchester Road was almost 100% nonproductive land in terms of revenue generation. Redeveloping that corridor — which needs no new infrastructure, roads or schools — will lead to better quality housing, more retail and a more walkable community.
The Town Branch Trail, which connects to the Legacy Trail at one end, will also connect downtown to the MET. The empty lots along Midland are conducive to mixed-use, dense urban developments. It takes everyone working in the same direction, private and public sectors. In terms of when Midland is finally completely built out, that could take a decade or more, but it will improve incrementally year after year.