Respect history, culture and reward investors

September 1, 2013 

Jeff Fugate, pictured at the intersection of East Third and Race streets, is president of the Lexington Downtown Development Authority.

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When I took over the Downtown Development Authority a year and a half ago, one of the first documents I read was the East End Small Area Plan.

DDA had been an active partner in assembling the plan with the neighborhood. By all accounts, the process was exciting, inclusive and representative of the neighborhood's aspirations.

With the renovation of the Lyric Theatre, reopening of the Charles Young Center and a pending construction start on the Isaac Murphy Memorial Art Garden, three key public projects can be checked off the list.

The plan always aspired to more than that, though — as it should. The East End is an historically African-American neighborhood with roots in the Civil War, later becoming the heart of Lexington's black community during segregation.

Decline started in the 1960s as demographics and retail patterns started to change. Various projects have also changed the face of the neighborhood, including public housing, infrastructure in the form of Midland Avenue and Elm Tree Lane and reconstruction of public housing as a HOPE VI development.

As the East End faces the 21st century, the neighborhood is a different place than it was in its heyday, both physically and demographically. Disinvestment has taken its toll, yet the area presents promise to reclaim its vitality as a diverse neighborhood near downtown.

The first three goals of the small area development plan look to historic preservation, housing choice and commercial development. Any survey of successful urban neighborhoods throughout the country will find these are three pillars of revitalization. There is nothing easy about achieving them, though.

A classic challenge in community development is shaking loose ownership of derelict historic properties. Often the only expense for the owner is the property tax, so there's little monetary incentive for sale. But even once sold, there is a high economic bar for a motivated owner to tackle these historic properties.

They are labors of love that require owners committed to the time and resources to bring back these buildings.

Affordable housing will be an ongoing challenge in the East End. The cost to build a modest three-bedroom house translates roughly into a rent of $950 to $1,100 a month just for the builder to break even.

There are state and federal programs to help subsidize building or renting, but those resources are scarce and getting scarcer. Different, less-expensive housing types, such as apartments and townhouses, hold some promise.

Commercial development presents the greatest challenge. At one point, the Third and DeWeese street areas of the East End, with an array of local businesses, were the commercial heart of the neighborhood. Today's retail markets have changed and it's much harder for residents to support neighborhood-scale enterprises.

Louisville's Park DuValle neighborhood, a HOPE VI project, landed a grocery store a little over a year ago only after finding enough public subsidy to reduce the cost of building and, therefore, the rent to a third of what it should have cost.

Even then, the store's success is tenuous based on whether the residents buy enough groceries there rather than at a larger (and potentially cheaper) store elsewhere.

None of this is to say that we should put the plan up on the shelf to collect dust. I have worked in some form of community development my entire career and seen far more challenged neighborhoods implement similar plans.

It does not happen by accident. It happens when there is clear-eyed leadership in the neighborhood that is not afraid to walk the line between reinvestment and gentrification.

In the 2010 Census, there were 2,696 people in a little more than 1,200 households in the East End, with a median annual household income of $25,476 (compared to $44,895 for all of Fayette County).

While the Census historically undercounts lower income neighborhoods, the margin of error is not so great to overcome the reality that there just isn't all that much money already in the neighborhood to put into fixing up buildings, starting businesses and buying new houses. Investment will have to come from outside of the area.

The challenge will be finding opportunities that respect the unique and deep history of the East End while still providing some return and, in turn, incentive for the investor.

The authors of the area plan understood the challenge of implementation and called for a neighborhood-based organization to lead the effort. As a committed group of residents and professionals begin to coalesce around that call, there is renewed optimism about the task at hand.

Where I have seen success, these groups work with the neighborhood to set realistic priorities, develop real-estate savvy and manage the change that reinvestment inevitably brings.

Jeff Fugate is president of Lexington Downtown Development Authority.

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