Lexington starts $241 million overhaul of Rupp Arena, convention center
Jamie Schrader remembers when downtown Lexington was the place to shop. It’s where he went to buy his first boy scout uniform at Wolf Wile department store on Main Street.
In the 1970s, the commercial broker witnessed another downtown transformation — the location of corporate headquarters in downtown and a change in the skyline with the birth of towering skyscrapers and the building of Rupp Arena and the Lexington Convention Center complex.
Now, Lexington’s downtown is in its third phase — a retail, restaurant, commercial and entertainment hub.
People are back, Schrader told a group of business, commercial and civic leaders at the first-ever State of Downtown report presentation Wednesday night at the Lexington Opera House.
“More people are interested in being downtown than ever before,” Schrader said during a panel discussion about downtown.
Produced by the Downtown Lexington Partnership, an organization dedicated to promoting downtown, putting on events and attracting new businesses to Lexington’s core, the report looked at key metrics, such as downtown’s customer base, vacancy rates of downtown office space, parking availability and the number of people living downtown.
Terry Sweeney, president and CEO of the Downtown Lexington Partnership, said the report will help the city track trends over time.
“The report documents that Downtown Lexington is a vibrant, growing, economically powerful urban core,” Sweeney said Wednesday.
Over the past two years, vacancy rates for high-end downtown office space has improved from 14 percent in 2016 to 12.5 percent in 2018. That’s better than vacancy rates in the suburbs, which is closer to 14 percent. The vacancy rate for downtown only includes Class A and Class B office space, the two highest-rated commercial spaces.
The downtown core — an area between Vine and Short streets and Broadway to Midland Avenue — has 373,470 square feet of street-level space with a 5.2 percent vacancy rate.
The restaurant market is still turbulent but continues to grow. In 2018, 37 new restaurants, bars or entertainment venues opened downtown and 11 closed for a net gain of 26, according to the report.
People are coming to downtown to eat, shop, and attend festivals, concerts, events and games at Rupp Arena, the report found.
A 2018 Gentleman McCarty report showed 80 percent of respondents from the surrounding seven counties had visited downtown in the past six months and spent on average $69.64 per trip.
Ethan Howard, director of placemaking and economic development for the Downtown Lexington Partnership, said the report’s numbers came from a variety of source,s including the Fayette County Property Valuation Administrator, the Gentleman McCarty report and other government agencies, such as Lexpark.
Downtown has 9,100 on- and off-street parking spaces. Monthly parking rates range from $40 to $115. Lexpark manages 2,081 garage spaces and 1,273 metered spaces. But that means the bulk of off-street parking, 5,776 spaces, is privately managed.
Lexpark’s four downtown garages are mostly full. The Lexpark garage over the Lextran transit center on Vine Street has a 94 percent occupancy rate, the highest of the four. The lowest is the garage behind the Fayette Circuit and District courts with a 73 percent occupancy rate.
Parking continues to be a challenge with new construction, said Dudley Webb of the Webb Companies.
The Webb Companies’ more than $200 million City Centre complex in the heart of downtown Lexington was stalled for years. Part of the delay was getting funding to build a three-story, 700-space underground parking garage for the complex that will include an office tower, Marriott Hotel and a Residence Inn when completed.
Mason McCauley, an assistant vice president at Republic Bank in Lexington, said lack of parking is a concern when commercial lenders look at whether to finance a project. McCauley also participated in the panel with Webb and Schrader.
“For a business to be successful, customers have to be able to get there,” McCauley said.
Webb and Schrader agreed that although there are more people living downtown than in past decades, more condominiums and apartments are needed. Webb said he thinks it’s possible some of Lexington’s downtown office space will be turned into housing at some point.
Lexington also used to have large companies in its downtown buildings that took up entire floors of office towers. Tenants now have fewer employees. Many want unique spaces, not just lots of space, Schrader said.
The report said 24,318 people live downtown. That’s roughly 7.6 percent of Fayette County’s population. The vast majority of people who live downtown are young —69.5 percent of those residents are under the age of 39.
“I know a lot of people who live in the suburbs and they want to downsize but there is not a product for them downtown,” Schrader said.
Other downtown statistics
82,095: people who attended conventions in downtown in 2018
862: downtown hotel rooms
51: restaurants/bars in the downtown core
27,633: people who work in downtown offices
$49,754: average wage of downtown residents