When Bob Eidson and Matt Hovekamp were roommates 15 years ago at the University of Kentucky, they talked about starting a real estate development company together. Then they went their separate ways.
Eidson joined the Army and served in Iraq, earned an MBA from UCLA and worked in banking and finance. He also helped start The Bourbon Review magazine.
Hovekamp spent a dozen years as Ball Homes’ purchasing manager.
The college roommates got back together in 2008 as Lexington’s infill and redevelopment market was beginning to emerge. They raised capital to buy property, started doing construction work for others and began making development plans for when the economy recovered.
Emerge Contracting’s focus is on infill development and renovation ventures in Lexington’s walkable, urban neighborhoods — roughly between Midland Avenue and Newtown Pike, Loudon Avenue and Maxwell Street.
The company’s first big project is Smith Town Homes, a row of five market-rate townhomes near the West Sixth Brewery.
With that project almost finished, the partners broke ground Oct. 2 for a very different venture: Wilgus Flats, a 12-unit apartment cluster aimed at low-income workers and retirees in the East End. They plan to own and operate the complex.
“We want to do mixed-use, mixed-income projects and affordable housing,” Eidson said. “We feel like now the industry trends and growth are pretty sustainable.”
Emerge Contracting was one of the first developers to file applications with the city’s new affordable housing trust fund. But their initial project was designed to appeal to professionals and empty-nest baby boomers seeking an urban lifestyle.
Smith Town Homes are on five narrow lots on Smith Street, between West Fifth and West Sixth streets, one block east of Jefferson. It is a low-income neighborhood with many old shotgun houses. Eidson and Hovekamp said that when they bought the property in 2008, it included two vacant houses without indoor plumbing, which they demolished.
The Lexington architecture firm Alt32 designed the contemporary townhomes, which have brick and galvanized metal exteriors. Each unit has 10-foot ceilings and polished concrete floors on the first level. The units are designed to save energy costs, with heavy insulation, high-efficiency systems and LED lighting.
Four units have three bedrooms, and one unit has two. They range in price from $199,000 to $245,000. The two cheapest units are now listed as under contract.
“Our value proposition is modern, multi-generational, energy-efficient housing downtown below $120 a square foot,” Eidson said.
The partners said they aren’t trying to “gentrify” Smith Street, but create new development that will add income diversity and make the neighborhood more stable. Next door, they bought a vacant old building they plan to remodel and rent as four low-income apartments.
When I stopped to see Smith Town Homes under construction in June, Lexington Police Officer Charles Burkett happened by. He said he had spent 13 years patrolling the area, which in the past has suffered from disinvestment and high crime, even though it is only a block from the mansions of Fayette Park.
“I’m impressed,” Burkett said. “That’s what this neighborhood has needed for a lot of years.”
Across town, Wilgus Flats, on two vacant lots on East Third Street, will have 12 apartments with monthly rents in the $600 range. First-floor units will be designed to accommodate disabled and elderly people.
“They came to us and said, ‘What would be good for the neighborhood?'” East End activist Billie Mallory said. “A lot of people are just sitting on land around here. I’m glad somebody is going ahead and doing something.”
Wilgus Flats is across East Third from Wilgus Street, whose oldest property is the circa 1814 home of Asa Wilgus, a prominent builder in early Lexington. His work included the 1811 Pope Villa on Grosvenor Avenue, which was designed for a Kentucky senator by Benjamin Latrobe, America’s first professional architect and designer of the U.S. Capitol.
Eidson and Hovekamp see a lot of potential in revitalizing urban neighborhoods in Lexington that suffered from decades of neglect during the decades when suburban development was the rage. Both live with their wives near downtown; the Hovekamps on South Upper Street, the Eidsons on West Sixth.
“We like the diversity of downtown,” Hovekamp said. “It’s something you don’t get in the suburbs.”