The Bluegrass and Beyond

It was a puzzle with no easy answer.

Two buildings from the mid-1800s — former servants’ quarters and Lexington’s oldest apartment house — were in such bad shape they had been condemned.

Their demolition would have left another sad gap in the historic neighborhood between downtown and Gratz Park.

Meanwhile, there is a need for affordable housing downtown for low-income people and retirees. Officials estimate that more than 8,700 households in Fayette County spend more than half of their income on rent.

With a lot of work and creative financing — such as tax credits and grants — the puzzle was solved Thursday with the dedication of First Presbyterian Church Apartments on Market Street.

The two buildings were carefully restored into a studio apartment, two one-bedroom units and seven two-bedroom apartments that will rent for between $330 and $550 a month. Tenants must have incomes below $22,700 for singles and $26,000 for families. Even before the first residents have moved in, there’s a waiting list.

Not only are the apartments affordable, they’re beautiful. While adding modern closets, fixtures and appliances, the developers preserved the buildings’ exterior, as well as inside touches such as windows, woodwork, wooden floors and fireplace mantels.

The large project team celebrated the apartments’ completion Thursday with a ceremony next door in First Presbyterian’s chapel.

“This project has been both a joy and an honor,” said Holly Wiedemann, a church member and president of AU Associates, which specializes in converting old buildings into affordable housing.

“It can be done,” Wiedemann said. “Historic buildings can be saved. Affordable housing can be produced, and it is desperately needed.”

Clyde Carpenter, a University of Kentucky architecture professor and member of the church, spoke passionately about both Christian outreach and historic preservation.

“Preservation is as much about the future as the past … it is about environmental sustainability, not wasting, not consuming,” he said.

In addition to giving historic buildings new life, Carpenter said, the apartments will add vitality to the neighborhood.

First Presbyterian, which recently restored its circa 1872 sanctuary, has played an important role in keeping the neighborhood vital. Among other things, the church restored Henry Clay’s law office next door and built a magnificent contemporary chapel in the 1990s that Carpenter helped design.

First Presbyterian Apartments, Carpenter said, represents a new ministry for the church.

AU Associates led the project on the church’s behalf with a big cast of characters. Financing came from Central Bank, the city, the Kentucky Heritage Council and the Kentucky Housing Corp. Design was done by S+A Architecture, with construction by Churchill McGee LLC.

Behind the scenes were many more partners, from lawyers Robert Vice and Mac Deegan to Kentucky American Water Co., which replaced water lines so old that some of them were made of wood.

“This is a model we need to replicate for other projects,” Urban County Council member Diane Lawless said of the public-private partnership. “Not only is it affordable housing, it is quality affordable housing. That makes all the difference.”

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The “AU” in AU Associates stands for “Adaptive Use.”

But if you remember the periodic table of elements from science class, Au also is the symbol for gold.

Holly Wiedemann has created gold for her Lexington development company — and golden opportunities for several Kentucky communities — through a complex alchemy of historic preservation, architectural innovation and creative finance.

AU Associates specializes in restoring once-beautiful old buildings by adapting them for new, economically sustainable uses. Most were once schools, rich in architecture and memories, and are now affordable apartments that put abandoned buildings to good use — and onto the tax rolls.

Wiedemann is working with First Presbyterian Church and Central Bank in downtown Lexington to restore a run-down Market Street apartment building from the 1800s into 10 attractive apartments that will rent for $300 to $600 a month. Old woodwork and fireplaces are being reused, architectural details restored.

“The proportions are comfortable to be in, and out each window you can see church steeples and gardens” of neighboring historic homes, she said.

That project is one of several now under way, Wiedemann said, representing $8.6 million in investment and providing 150 jobs.

“They have the right angle on the historic-preservation argument: It is first and foremost an urban-redevelopment argument,” Michael Speaks, dean of the University of Kentucky’s College of Design, which includes the architecture school, said of Wiedemann’s company.

“Her firm is one of the few that is taking historic properties and using creative financing to give them new life and make communities better,” Speaks said.

Wiedemann, 53, comes naturally to her love of history and old buildings.

A great-great grandfather, George Wiedemann, started Wiedemann brewery in Newport. A great-grandfather, J.D. Purcell, started Purcell Department Store, which was in a grand old building on Lexington’s Main Street that was demolished in 1978 to make way for the Radisson hotel. “Boy, that would be a great building to have now,” she said.

Wiedemann grew up on the family farm in Scott County called The Hollys, for which she was named. The farmhouse, built in 1789, gave her an appreciation for the beauty and durability of old buildings.

After earning a degree in landscape architecture and urban planning at the University of Georgia, she worked for a major developer in Tulsa, Okla. She realized she would need to learn more about real estate finance to do the kinds of projects she wanted to do.

That led her to Duke University in North Carolina, where she earned a master’s in business administration and met her husband, Bart van Dissel, then a doctoral student. They moved to Boston, where he taught at Harvard Business School and she worked for Winn Development, a pioneer in adaptive reuse of historic buildings.

“That, for me, was the Ph.D. level education” in historic tax credits and unconventional finance, she said. It also sparked her interest in building affordable housing.

Through consulting work, Wiedemann raised the money to start AU Associates after she and her husband moved to Lexington in 1992. The firm’s first major project was remodeling the old Midway School into 24 apartments for seniors.

The Irvine mayor’s wife saw the project and got Wiedemann to do a similar one in the Estill County town. Since then, AU Associates has done other school-to-apartment renovations, with more planned in Glasgow, Winchester, Beattyville and Buffalo in LaRue County.

“These old schools are often beautiful buildings that were built to last and are located in lovely residential areas,” Wiedemann said. “Many of the people who live there now taught or went to school there and have wonderful memories.”

The firm converted an ornate former YMCA built in 1913 in downtown Louisville into 58 market-priced apartments and St. Francis High School. And it is turning a former tuberculosis hospital in Ashland into 34 apartments for domestic abuse victims.

AU Associates’ projects often are complex because they use historic tax credits, partnerships and creative financial arrangements. “We cobble together multiple funding sources to make these projects work,” Wiedemann said. “That’s why a lot of people don’t do this work.”

But the projects work, and there’s a lot of demand for them.

“The growth potential is amazing,” said Johan Graham, who along with Martha Dryden makes up Wiedemann’s core staff. “We really have as much work as we can handle just from the business coming through the door.”

The firm’s offices are on Georgetown Street in a formerly derelict pre-1800 house that AU Associates restored with a contemporary addition. Behind it is the firm’s first start-from-scratch project — ARTEK lofts, which was developed in partnership with neighbors in the Western Suburb Historic District on a formerly blighted lot.

Wiedemann and her husband live at ARTEK, which has impressive views of the downtown skyline and the Henry Clay monument in Lexington Cemetery. Unfortunately, ARTEK came on the market during the recent downtown condo boom and right before the current economic bust. Wiedemann said about half of the 38 units, priced from the low $170,000s to the low $280,000s, remain unsold.

The project’s unique contemporary architecture by Christopher Fuller of K. Norman Berry & Associates in Louisville uses a lot of concrete, steel and brick. Like the historic structures Wiedemann’s firm usually works with, it is built to last.

“In 50 years, it will be qualifying for historic-preservation restoration grants,” Wiedemann said with a smile. “It’s not going anywhere.”

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