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Officials plan to 'double-down' on residential development in downtown Louisville

Leaders want to shift focus away from big business and tourism to find a way to support a healthy downtown.

LOUISVILLE, Ky. — Downtown Louisville is looking to press the reset button and reassess what it wants to be.

Organizations like Greater Louisville Inc. and the Downtown Louisville Partnership say that since the pandemic there has been a significant shift in foot traffic downtown. People’s day-to-day patterns have changed and less people are regularly coming downtown to work. That is causing a problem for the health of the heart of Louisville.

“It's important right now that we do it now,” Rebecca Fleischaker said. Fleischaker serves as the Executive Director for the Louisville Downtown Partnership.

Fleischaker sat down with WHAS11 Reporter Jim Stratman to follow up on a discussion he had with Sarah Davasher Wisdom, the CEO of Greater Louisville Incorporated.

Both women have defining roles as it relates to what the next iteration of downtown will look like.

"We know that we have to have a thriving downtown in order to be a thriving city,” Davasher Wisdom said.

But what does that actually look like?

Fleischaker said a healthy downtown has three prongs to it; the office side, the tourism side, and residential.

"Our office was really good pre-covid. Tourism is now even better than pre-covid. Residential has been a little waning,” Fleischaker said. “Now that office isn't as strong, we really need to double-down on residential development."

The Residential Question

Rebecca Fleischaker says Louisville is in a pretty good position to build out and support a new demographic of worker: The young millennial looking for a city lifestyle. 

It’s a very pop culture concept; creating an environment where citizens can walk to and from work, to a local shop to get food, live in a highly urban setting and not need personal transportation to get you where you want to go.

That’s not something that Louisville has prioritized in the past.

"In the 1990's…the focus was on tourism because downtown Louisville was just office 9-5.” Fleischaker said.

That has definitely changed in the last 30 years.

Now Bourbonism is exploding, the downtown convention center space has doubled, museum row and whiskey row have grown leaps and bounds.

RELATED: Kentucky sees best year on record for tourism, nearly $13 billion in economic impact

Attracting tourists is no longer an issue.

Greater Louisville Incorporated CEO Sarah Davasher-Wisdom says in fact, business is booming from Thursday through Saturday, but it’s those other days of the week where downtown business falls off.

"We've seen other peer cities build a residential first strategy downtown to supplement some of the tourism that takes place in their downtown,” Davasher-Wisdom said.

She says that Jacksonville has been a real role model for them, so much so that GLI took a trip to Jacksonville to see how they’ve gone about creating a residential first downtown.

That’s where they met CEO of the Jacksonville Downtown Investment Authority Laurie Boyer.

"There is a marketable lifestyle in an urban center that is very different,” Boyer said over a zoom call from her office in Florida.

“We have a great suburban lifestyle, we have a beach lifestyle, so when we're looking at recruiting companies to Jacksonville to occupy those offices – and the thing that we're missing is what I call the urban lifestyle."

"We don't have that great lifestyle for the millennial who wants to move in, hang out in a coffee shop, walk to all these venues, doesn't want to own a car. That has not been Jacksonville, and not much of Florida frankly,” she continued.

So for the last decade, Boyer and her partners in Jacksonville have worked to fix that.

She says that right now they’ve gotten about 7,500 residents who have taken advantage of more housing opportunities in downtown and they have about 1,400 units still under construction. 

That takes them closer to what Laurie dubbed ‘The Magic Number’ of 10,000. She says once you hit that milestone you can usually attract and support retail businesses like a grocery, drug store, the kinds of places you would need if you plan to live in an urban area.

“We see this as supporting economic development as well because we're providing that alternative for those recruiting employees to be able to bring in the brightest and best and have everything to offer,” Boyer said.

That last part is what appeals so much to downtown leaders in Louisville.

Quite simply, attracting more and better workers can attract more and better businesses and that helps to grow a city and make it more appealing.

Fleischaker and Davasher-Wisdom say that Louisville has the ground work already in place to build out a new, central neighborhood.

The Residential Strategy

That idea to view Downtown as a neighborhood is a fairly new approach. For decades downtown was seen more as a hub for business. However, if your goal is to attract people to live and create  a life for themselves in this new residential downtown, that thought has to change.

“You saw people drive in, you saw people drive out. Not a lot of activity,” Fleischaker said.

“So we've got twice over an expanded convention center, all of museum row, whiskey row, Bourbonism has exploded in the last decade. All of those have changed dramatically the face of tourism, all for the good."

Not to mention the revitalization of areas around downtown has come into sharp focus in the last decade. Areas like Nulu and Smoketown have built themselves up as places where people want to go. They’ve become what Fleischaker refers to as strong “edge neighborhoods.”

“You don't want there to feel like I've got to go through this hole before I get to the middle of the exciting area,” Fleischaker said.

“So you want what's happening over at Beecher Terrace in the Russel Neighborhood, in Old Louisville, Smoketown, Nulu. All of these neighborhoods are going to -they are getting attention and redevelopment and there are more opportunities as well."

That expansion of tourism set the stage for what comes next. Fleischaker says that the city has a wealth of buildings downtown that are already zoned for residential use and could perfectly accommodate stores on the bottom with apartments on top.

"We're very lucky that when other cities were tearing down buildings in the 60's and 70's we did not. We were too broke to do a lot of demolition,” Fleischaker said.

“We have lost some gems, I'm not saying we didn't lose some, but we've got some really beautiful, old, mid-rise, historic buildings that would be perfect renovation opportunities for residential properties," she said. "And I could rattle off five right off the top of my head. And those really are in the central core of downtown."

Fleischaker says that most of downtown is already zone for C3 development which means that most things are allowed to be built their, besides heavy manufacturing. That eliminates one potential stumbling block for developers, but price and affordability remains a top concern for city leaders.

Fleischaker indicated that if you can’t build something affordable, then the plan to entice people to move downtown faces a long, uphill battle.

“The cost of construction has gone up, everything has gone up and you're just not going to get the rents that are going to meet that cost of development. So what we want to do is be able to lower that rent cost but still have a nice product that you live in, and that requires a subsidy. Just straight forward that's what we need,” Fleischaker said.

The downtown partnership has already created at least one fund to help cut the cost of developing those buildings. She says that typically the elevated cost of creating apartments gets passed on to the tenants in the form of higher rents. That’s something that can’t continue to happen.

Fleischaker hopes to see all of these concerns reflected in the new 10 year plan that the downtown partnership will release in late 2023. She also said that there is work already being done in downtown, but there’s much more to go and it won’t just be like flipping a switch.

"We've got a great quality of life, competitive cost-of-living, we're centrally located, and if you can do business from anywhere why not do it from Louisville, Kentucky. And I would say why not do it from downtown Louisville," Fleischaker said.

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