Phoenix Hill Housing Resurgence

DSC_0063_webThe development of a mixed-use housing and retail space at the corner of Baxter Avenue and Broadway is moving ahead. Though it’s not quite a done deal, Columbus-based developer Edwards Companies is confident and hopes to begin construction as early as this fall, according to attorney Bill Bardenwerper of Bardenwerper Talbott & Roberts PLLC, the Louisville firm representing the group.

The development isn’t the Edwards Companies’ first efforts in Louisville; they’ve also built student housing around the University of Louisville.

Edwards frequently works on projects similar to the Phoenix Hill development. “They’ve had a lot of particular interest in urban infill housing, particularly in a mixed-use context in places like this,” said Bardenwerper. Urban infill generally means the redevelopment of dormant, under-utilized real estate in or close to the urban core. He says the trend of urban infill hit bigger cities already, and “a lot of those companies like Edwards are looking to Louisville because their work is – to some extent – done in some of these other cities.”

He pointed to a national trend of millennials moving into cities but adds that urban living doesn’t appeal to one single demographic. “People who are now emptynesters are now interested in moving back to the city … You’re going to see the baby boomers like myself moving back in.”

Renderings by Lupton Rausch

Renderings by Lupton Rausch

The Phoenix Hill project will include 281 apartments, and 33,000 square feet of retail space. Pointing again to national trends, Bardenwerper says that high quality apartments are in demand: “There was a long period where people rented because they couldn’t afford to own … Younger people are wondering in particular if owning a home is such a good investment.” He references the 2008 recession, saying that the buyer’s market hasn’t fully rebounded yet. “We haven’t even gotten halfway back to where we were in terms of pre-2007, in terms of people building, in terms of home and condo construction. Condos haven’t rebounded at all, but apartments are going crazy.”

Instead of condos or houses, the new generation and those baby boomers are now choosing to rent. The high-end apartments envisioned for the Phoenix Hill site will range in rents from approximately $850 to $2,000 dollars per month and include a range of layouts from studios to two-bedroom apartments.

Edwards is still working through some rezoning issues and finalizing the finance package, which includes financing for the Phoenix Hill site and the company’s proposed development just a few blocks away at the former Mercy High School site. The two sites represent an $80 million investment according to Bardenwerper.

While urban infill projects are appealing to developers, they come with a higher price tag, which can make it a cost-prohibitive for some companies. Bardenwerper calls the price differential between infill and suburban “exponential,” pointing to the proposed parking garage at the Phoenix Hill site as an example and saying it will add $10 million to the project’s price tag.  He estimates similar parking options in the ’burbs would cost as little as $1 million.

The finance package includes “an industrial revenue bond, which would involve some amount of what we would call tax assessment freeze.” After development, the properties will be worth considerably more than they are currently, and a rising real estate market could make them even more valuable. The taxes owed to Louisville Metro would naturally go up every year. But to incentivize the project, Metro will likely freeze the tax rate for a number of years, saving Edwards a considerable sum. Without disclosing specific dollar amounts, Bardenwerper suggested the freeze would mostly pay for the construction of the Phoenix Hill parking garage and the purchase and renovation of an existing garage next to the Mercy development.

The project is still pending approval from the Metro Council. If the financing goes through and the rezoning is approved, Edwards hopes to begin construction in the fall and have units available as early as next summer. VT

By ELI KEEL, Contributing Writer