Louisville Mayor Craig Greenberg and Jessica Bennett Kincaid with the Office of Arts and Creative Industries talk about how the city is investing in arts.
An anticipated pool of funding meant to return vacant downtown Louisville buildings to productive use is now available.
Funded with state tax dollars, the Downtown Louisville Building Conversion Program is looking for "shovel ready" projects that would convert underutilized buildings in the Central Business District for hospitality, retail, entertainment or residential uses.
"We are going to use this money wisely to help convert vacant buildings into more engaged activities," Mayor Craig Greenberg said Tuesday. "We want to see proposals that preserve the basic architecture of the buildings that already exist in downtown, and repurpose them, bring them back to life."
Preference will be given to adaptive reuse projects that have a significant residential component, particularly those with affordable housing units, according to the city.
"These are projects that are really important as we think about creating a 24/7 neighborhood," Greenberg said.
And while the focus will be on residential proposals, funding could also go toward other types of projects, including hotels or shops.
The effort's funding is part of a $100 million allocation from the Kentucky General Assembly during its most recent session. That pool of money is to be split between a handful of downtown-focused projects, including the Belvedere, Louisville Gardens and the Community Care Campus, among others.
Greenberg declined to share what portion of the $100 million will go toward the initiative, saying the total spend will depend on level of interest and need. There is also no per-project cap, though Greenberg noted millions could potentially go toward a single applicant, helping to enable a larger project.
"We're going to fill the gap," Greenberg said of project financing. "We're not looking to enrich those who are doing these revitalizations. We're helping to make a project happen that otherwise wouldn't without the support."
Louisville and cities across the nation have seen elevated office vacancy rates since the COVID-19 pandemic amid office downsizing and hybrid work trends. In Louisville, as of the third quarter of 2024, the Central Business District had an office vacancy rate of 25.5%, according to commercial real estate agency CBRE.
City leaders have looked to office building conversion as a way to reinvigorate downtowns, though such conversions can be costly.
The city's Cabinet for Economic Development will oversee and administer the program, which has an application deadline of Feb. 10. Not all applicants will necessarily receive funding. The city anticipates making the funding awards within a month of the program deadline.
Applications will be scored on how many square feet will be converted and to what degree the project will have a positive impact on downtown revitalization and the city's growth. Applicants are required to provide a consultant's estimated economic or fiscal impact for their project.
Developers or building owners who apply are expected to have a project that can break ground within 18 months of securing project funding and can be completed within three years.
Jeff O'Brien, executive director of the city's economic development cabinet, noted developers have reached out to express interest since the funding was first secured back in the spring.
He anticipates those behind a handful of larger projects applying for funding, as well as some applicants tied to smaller conversion projects. His office will review projects' funding sources to determine financing gaps that need to be closed to make the projects a reality.
"We're going to ask for capital stacks and we are going to vet those capital stacks," he said. "We're used to vetting projects."
Eligible buildings must be located within the Central Business District, stretching from the Ohio River to York Street and from Interstate 65 to 10th Street.
Local developer Jeff Underhill, whose Underhill Associates is a partner in the planned redevelopment of the entirely vacant Starks Building on Fourth Street Live, said the building has "great bones" and is primed for conversion into residential use.
"My partnership is certainly interested in participating in this funding opportunity," he told The Courier Journal. "Redevelopment of the Starks Building is core to breathing life back into our downtown."
Plans, in the works for years, call for the conversion of the 14-story building into an arts-focused mixed-use space with over 300 apartments, artist work studios and ground floor commercial space, including a restaurant.
"Hopefully, this opportunity will be capitalized on to support our downtown in many ways," he said.