Developer eyes $9.4M overhaul of senior downtown Lexington apartments

A New York developer wants to buy and renovate the 168-unit Rose Tower apartments in downtown Lexington.

To renovate the senior affordable housing complex will cost about $9.4 million, or about $56,000 per unit, officials with New York-based Related Affordable told the Fayette County School Board on Monday, May 12. Some of the upgrades includes new appliances, overhaul of aging bathrooms, replacement of HVAC and boilers, and new security measures, said Sam Sjoberg, vice president of Related Affordable.

Another key feature the downtown building at the corner of Rose, Vine and Main streets doesn’t have — a generator. Related Affordable wants to add one, as it’s a huge safety concern. The multi-story building was built in 1960, according to Fayette County Property Value Administration records.

“If the power goes out, the residents can’t use the elevators,” Sjoberg said.

But to finance the $9.4 million overhaul, the developer wants to use an industrial revenue bond, which allows the developer to use Lexington-Fayette Urban County Government bonds to finance the project. The property would be turned over to the merged government over the 15-year period and will be leased to Related Affordable. That means Rose Towers will be taken off property tax rolls. Governments do not pay property taxes.

As part of a new program that allows affordable and workforce housing developers to use industrial revenue bonds, developers must get payments in lieu of tax agreements with other taxing districts. Fayette County Public Schools is the largest taxing district in Fayette County.

As part of the program, the vast majority of the apartments must remain affordable for people whose income is 60% of average median income. For one person, that’s under $43,020, Sjoberg said.

About 120 of the units will be set aside for Housing Choice Vouchers, formerly referred to as Section 8 vouchers, for seniors who qualify. There remaining 48 units will be for people at 60% of average median income, he said.

Sjoberg said the development currently generates $44,000 in property taxes to the school district. The group is proposing an immediate impact fee of $165,000, roughly five times what the school district currently receives. After that the district would get a $65,000 first-year payment with that payment increasing 3% each year over 15 years.

The cash-strapped school district is looking for more money after discovering its financial statements have been misstated for years. It is expected to vote May 21 on a $711 million general fund budget that includes cuts to the days many employees work and unknown layoffs of support staff. The district is also looking at possibly selling properties to generate more cash.

The district will vote on the payment in lieu of taxes proposal at its May 21 meeting. Sjoberg said the group will also provide district officials its agreements with the Lexington Public Library and the Lexington-Fayette County Health Department, the other taxing districts that must agree to payments instead of taxes.

But getting those agreements is just the first step. The industrial revenue bond still has to be approved by an economic development board at the city and the Lexington-Fayette Urban County Council.

Midland Station also wants industrial revenue bond

Midland Station, a proposed mixed use development at the corner of Midland and Third Street, will also pursue an industrial revenue bond, said Scott Shapiro, one of the developers of the project.

That project will have retail on the first floor and 258 apartments in the upper floors over two buildings. Those apartments are geared toward workforce housing, which is 80-to-120% of the average median income. A family of one would have to make less than $70,000, or 120% of average median income, to qualify.

“The majority of the apartments will be workforce housing,” Shapiro said.

The proposed apartment complex is behind The Hill, a FCPS technology school. The developers are willing to set aside some of those apartments for teachers who meet those income guidelines, Shapiro said. For workforce housing, the industrial revenue bond is only for 10 years. Only 20% of the project has to be set aside for workforce housing to qualify for the incentive.

The group is proposing paying FCPS $45,000 in the first year and eventually paying $147,751 in the 10th year. Over the 10 years, the project will pay $732,216 to the school system. Those figures are based on payments calculated by Commonwealth Economics, a group that specializes in calculations of economic incentives, Shapiro said.

The school board will vote on whether to accept the payment in lieu of taxes agreement at its May 21 meeting.

This story was originally published May 12, 2026 at 11:09 AM.

Beth Musgrave

Lexington Herald-Leader

Beth Musgrave has covered government and politics for the Herald-Leader for more than a decade. A graduate of Northwestern University, she has worked as a reporter in Kentucky, Indiana, Mississippi, Illinois and Washington D.C. Support my work with a digital subscription