Emerge Contracting sees opportunity in urban infill, redevelopment

October 12, 2015
Smith Town Homes, a townhouse development on Smith Street being developed by Emerge Contracting. Photo by Tom Eblen | teblen@herald-leader.com

Smith Town Homes, a townhouse development on Smith Street. Photos by Tom Eblen


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.

Bob Eidson

Bob Eidson

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.

Emerge Contracting co-owner Matt Hovekamp. Photo by Tom Eblen | teblen@herald-leader.com

Matt Hovekamp

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.”

Emerge Contracting recently broke ground for Wilgus Flats, a 12-unit affordable housing apartment development in the East End.

Emerge Contracting recently broke ground for Wilgus Flats, a 12-unit affordable housing apartment development in the East End.

Proposal a test of whether Lexington is ready to grow up, not out.

December 20, 2014

thistleAn architectural rendering of Thistle Station, a proposed 16-story apartment building with retail on the first floor. It would be between West Third and Fourth Streets off Newtown Pike.


Thistle Station, the 16-story apartment and retail building proposed last week along Newtown Pike, will be a big test of whether Lexingtonians can practice what they preach about growing their city up rather than out.

At first blush, the $30 million project appears to be a great example of urban infill development, the kind Lexington needs if it wants to avoid paving over more of its precious farmland.

Proposed by a group of local investors led by John Cirigliano, Thistle Station seems to have a lot going for it. For one thing, the site and location are just about perfect.

The development would sit along busy Newtown Pike, across West Fourth Street from the new Bluegrass Community and Technical College campus. It would be near two popular brew pubs and the Jefferson Street restaurant district and within easy walking distance of downtown.

Yet, there is enough space between this site and surrounding residential neighborhoods that nobody should feel crowded or overwhelmed, even by such a tall building with more than 210 apartments.

The site is now a former lumber yard bordered by railroad tracks. Nobody will be displaced by this project, and no significant old buildings will be lost.

thistle2The developers plan plenty of parking, most of it screened from public view, with easy access to Newtown Pike, which will minimize traffic impact on other nearby streets. The building is on a Lextran bus line and will be near both the Legacy and Town Branch trails. The developers plan to build a connecting trail section on their property along Newtown Pike.

Renderings show an attractive piece of contemporary architecture, designed in part by the Lexington firm Pohl Rosa Pohl. Skillful use of classical elements — a base, a middle course and a cap — give the design visual unity.

Although the building would be bigger and taller than anything near it, the first story is wrapped by pedestrian-friendly retail space. A stepped-down face along West Third Street provides a more human scale appropriate to the adjacent historic neighborhoods.

An abundance of glass is framed by textured concrete to resemble brick, with several nice touches, such as open glass corners and subtle balconies. Thistle Station could set a positive tone for future architecture along this important Lexington gateway corridor.

While the downtown condo market has been soft since the real estate bubble burst in 2008, property professionals tell me there is demand for upscale rental apartments downtown. Many young and transient professionals, as well as empty-nest baby boomers, want to live in an urban setting.

Two more positives: Thistle Station is not seeking any public subsidies, such as tax-increment financing. And before going public, the developers briefed leaders of the three surrounding neighborhood associations and scheduled meetings to seek public comment and suggestions. So far, most of the response has been positive.

The developers plan to file papers next month to rezone the property from I-1 light industrial to B-1 business under the city’s new form-based guidelines. If approved by the Planning Commission and the Urban County Council in the spring, the developers say the project could be finished and open by fall 2016.

The riskiest aspect of Thistle Station’s plan would seem to be the small, ground-floor retail and restaurant spaces. A lot of similar space at other Lexington mixed-use projects is vacant after struggling to find and keep tenants.

Still, making this space available is the right thing to do. Retail is essential to creating vibrant neighborhoods. A few tall housing developments like this could help provide the population density and diversity Lexington needs to help urban shops and restaurants succeed.

I expect Thistle Station will get some opposition — I have never seen a development proposal in Lexington that didn’t. People here have always been averse to more density and height. But both will be essential if Lexington is to get serious about promoting urban infill rather than bulldozing more bluegrass.

If properly designed, development with greater density and height can be both attractive and compatible with existing neighborhoods. Thistle Station looks like a good place for Lexington to start proving that point.

House-flipping venture turns Victorian disaster into showplace

October 19, 2014


Left to right, Josh Despain, Bennett Clark, Ryan Clark and Michael Hogan spent 16 months renovating a circa 1889 mansion at 515 North Broadway that was filled with trash and animal waste when a lender foreclosed on the previous owner last year. They sat on the front porch  with a photo of the house taken when they bought it.  After a complete renovation, the house is now for sale for $1.2 million. Photos by Tom Eblen


The business venture began innocently enough. Four young men with backgrounds in architecture and real estate decided to pool their money, buy an old house, renovate it and try to resell it at a profit.

They looked for a manageable project; perhaps a 1920s bungalow in need of a little updating.

What they ended up with was a three-story, 5,282-square-foot Queen Anne mansion built in 1889 that was such a disaster it made headlines. Over the next 16 months, this house-flipping project almost flipped them.

But the disaster at 515 North Broadway is now a beautiful, completely renovated showplace, listed for sale for $1.2 million. And the four young men have learned some valuable lessons about construction, historic preservation and business.

“This project literally was the epitome of everything: it took longer, was harder and cost more than what we expected it to,” said Josh Despain, a landscape architect.

140118BroadwayHouse0004Despain, architect Michael Hogan and soon-to-be architect Ryan Clark work together at Ross Tarrant Architects. They spend most of their days behind desks.

“We were interested in the idea of getting our hands dirty and doing some construction ourselves,” Hogan said.

And, as young married men hoping to start families, they were looking for some extra money, too. So they teamed up with Clark’s cousin, Bennett Clark, a single real estate agent and builder who had been thinking along the same lines.

They had looked at several old houses when 515 North Broadway made headlines in February 2013. The Federal Home Loan Mortgage Corp. foreclosed on the previous owner. Authorities put her belongings on the sidewalk, almost stopping traffic as passersby picked through it.

Everything was filthy and covered in animal waste, prompting city health and code enforcement officers to step in. The inside of the house was even worse. The smell sickened almost everyone who stepped inside.

141009Rehab0007But the mansion was well-located, structurally sound and retained a lot of its original character. The lender got a dozen offers, and the four guys bought it for $195,752.

“Until we started taking out the plaster and some of the damaged areas, we didn’t really know what kind of condition it was in,” Hogan said. “But, structurally, we felt really good about it.”

Also salvageable were most of the original windows, including some stained-glass ones, and most of the woodwork and flooring. There was a magnificent staircase that rose three stories through the middle of the house.

But the partners quickly realized that all of the plaster needed to be removed to make way for new insulation, plumbing, electricity and interior walls.

“We saw it as a unique opportunity to build a new house within the shell of an original Victorian,” Hogan said.

Added Bennett Clark: “Our mindset was to make the house modern in the places that you need for a house to be modern, but bring back the formal areas to their original glory.”

141009Rehab0002To save money, the partners did about 60 percent of the labor themselves — mostly demolition, basic carpentry, landscaping, paint scraping and other grunt work. They hired contractors for skilled work such as electricity, plumbing, HVAC, roofing and window restoration.

Bennett Clark, who was the general contractor, made the reconstruction project his full-time job. The other three worked nights, weekends and vacations there.

“Our wives hate this house,” Ryan Clark said, as the other three chimed in about how their own homes were neglected during the project.

Because the house is in a city historic district, the partners had to follow strict guidelines on the exterior renovation. They weren’t expecting any special treatment, either: the city’s rule book pictures their house on the cover.

But they said it turned out to be a pleasant experience.

“If you’re just up front with them from the get-go and you’re not trying to hide anything, they’re super easy to work with,” Despain said.

The partners’ challenge now is selling the house for enough to recoup their investment and make a profit. Although expensive, the price is within the range of similar downtown mansions, many of which have had less extensive renovations.

So, do they plan to do this again? They think so, but not anytime soon. Since beginning the work in mid-2013, the three married guys have all had their first children. They expect to have less free time in the near future for construction.

The partners said they learned that to be successful in the renovation business, it must be your business, not a hobby you do in your spare time. A property must be chosen wisely, and the cost of purchase and renovation carefully calculated.

“It was the first project we had done together, so we wanted to make sure we did it right,” Hogan said. “Not only were we trying to make money, but we were really trying to learn a lot about historic preservation. It turned out really well.”

Click on each image to see larger photo and read caption:

With Lexington Mall redone, what else is left to redevelop?

January 7, 2013

Developer Phil Holoubek hopes to announce construction plans soon for the Main and Vine property that has been vacant for two years. Photos by Tom Eblen 


Southland Christian Church opened its new Richmond Road campus this weekend on the former site of Lexington Mall, a 31-acre parcel that had been a civic embarrassment for years.

The church bought the long-vacant shopping mall in 2010 from Maryland-based Saul Centers, which had let it languish for more than a decade. Dillard’s, the last store in the mall, closed in 2005.

Once the church develops commercial space at the property’s edge along Richmond Road — a former pond that now looks like a strip mine — one of Lexington’s biggest eyesores should be gone.

If we are lucky, and the economy continues improving, other prominent sites that are ripe for redevelopment might finally get some attention.

The next one that comes to mind is Turfland Mall, which opened in 1967 as Lexington’s first suburban shopping mall. After years of decline, the central mall shut down after Dillard’s closed in 2008. As with Lexington Mall, Turfland was owned by an out-of-state company that seemed to have forgotten about it.

Last month, amid a Hopkinsville bank’s attempts to foreclose on the 367,000-square-foot mall, Lexington developer Ron Switzer bought it for $6 million. He said he plans to demolish all but the Staples store. Staples and Home Depot, which owns its end of the mall, have remained open, along with several businesses in the parking lot.

“What we want to do is take an eyesore and come up with an attractive plan for a development,” Switzer said last month, adding that specific plans are not set.

Turfland Mall was purchased last month for redevelopment.

I wish Switzer the best of luck in revitalizing Turfland. The same goes for the owners of two adjacent properties at Harrodsburg and Lane Allen roads — the former Verizon building, which is for lease, and land long occupied by The Springs Inn. The once-popular motel closed in 2008 and was demolished the next year. A CVS drug store was built on 1.56 acres; the remaining 5.1 acres are for sale.

Another prime redevelopment site that could see action soon is the point where Main and Vine streets come together at the eastern edge of downtown. A former bank, antiques store and alteration shop were demolished in April 2010, and developer Phil Holoubek hoped to replace them with an urban-style mixed-use development.

But Holoubek’s efforts were frustrated by the economic slump, tight credit markets and the city’s inability to build a parking deck on the block.

Holoubek and a Louisville developer then tried to build a CVS drug store on the site, but its suburban-style design faced widespread opposition. The deal died when it was discovered that the site plan hadn’t taken into account an underground utility vault that was too costly to move.

Last week, I was giving Holoubek a hard time about how scruffy his vacant lot has looked for the past two years. I noted the CentrePointe block down the street has been sown in grass and well-maintained while it has awaited development.

Holoubek said he expects by the end of this month to announce a tenant for Main and Vine and a development plan that looks like it belongs downtown. Should that deal fall through, he promised to call in landscapers.

Among other prominent Lexington parcels ready for redevelopment:

■ The 11-acre Continental Inn site at New Circle and Winchester roads. The property was bought by a group of investors, including former state Democratic Party chairman Jerry Lundergan, and most of the dilapidated motel was demolished in 2007. Since then, property owners and the Eastland Parkway Neighborhood Association have sparred over semi-trailers being parked there.

The Continental Inn site is advertised for sale. At the right price, it could make a good location for a car dealership or even a mid-priced hotel, said Ken Silvestri, a commercial real estate broker who keeps a close eye on the Lexington market.

■ The former site of Thoroughbred Chevrolet on Richmond Road between New Circle Road and Man o’ War Boulevard also is a good candidate for redevelopment, Silvestri said. It has been vacant since the dealership closed in July 2010 after General Motors did not renew its franchise.

Making luxury homes more marketable, with a twist

April 30, 2012

The Miller House is a masterpiece of modern architecture that people either love or hate. When it was vacant and empty, some prospective buyers didn’t know what to make of it.

The house off Chilesburg Road provided the perfect challenge for Tom Caywood’s new company, Showcase Realty Services, which brings a different economic model to the business of staging vacant luxury homes for sale.

Working for the bank that has been trying to sell the Miller House for 16 months, Caywood and Melody Farris Jackson, an artist and designer, furnished and decorated the house. Then Caywood found three people to live there and keep it in tip-top shape to show prospective buyers.

Perry Dunn, an executive with First Federal Bank, said the house’s transformation has been impressive. “Tom has really taken the bull by the horns to the point that we’re considering raising the price,” he said.

Susan Sloane of Prudential A.S. de Movellan Realty has the 5,771-square-foot house listed now for $999,000. That is down from an initial $1.5 million, Dunn said.

The Miller House, completed in 1992 for Robert and Penny Miller, was designed by José Oubrerie, a French architect and protégé of Charles-Édouard Jeanneret, better known as Le Corbusier, one of the pioneers of modern architecture. After Robert Miller’s death, the house and 20.6 surrounding acres were sold for redevelopment in 2006.

Left empty, the Miller House was vandalized. An architect who admired the house created a non-profit foundation to buy it and two acres, and repaired the vandals’ damage. He hoped to make the house the centerpiece for a development of other modernist homes, but the project failed amid the home-building slump.

First Federal took back the house in January 2011 and has been trying to sell it, Dunn said. That has been tough, in part because of uncertainly about the surrounding property, which once provided tree-covered vistas beyond the house’s glass walls.

Caywood recruited Jackson to help him furnish and decorate the house. She was already very familiar with it: As a part-time teacher in the University of Kentucky’s College of Design in 2008, she had her architecture students measure the Miller House to create precise drawings.

Built mostly of concrete, glass, steel and wood, the house felt emotionally cold without furniture and art, Jackson said. The brilliance of the house’s design is in how it uses space and volume. But, when empty, it was hard for many people to visualize how it could be a comfortable place to live.

Jackson furnished the house with art, including some of her own, and a borrowed Horsemania horse that now stands in the dining room. Jackson and Caywood have filled the house with mid-century modern furniture borrowed from their own homes and those of friends.

“What I tried to do was make it so a prospective buyer could come in and say, ‘Wow, I see how this house is put together,'” she said. “And having people inhabit the house allows us to fill cabinets and give it a homey feel.”

Caywood, a former online advertising executive with the Herald-Leader and other newspaper companies, said he got the idea for Showcase Realty Services when he moved back to his hometown after living in San Jose, Calif., and Dallas.

Lexington had a number of unique luxury homes that had been on the market for a while. Owners were stuck with high carrying costs, such as utilities and lawn upkeep. They also sometimes had higher insurance premiums because vacant properties are more subject to accidental damage or vandalism.

Lexington also had a number of people with good incomes who wanted high-quality, short-term housing and flexibility for various reasons — a relocation, divorce or temporary job assignment.

The company works like this: Caywood furnishes and decorates the home at no cost to the owner or Realtor, except for any mutually agreed renovations. (The company works only with homes listed with Realtors.) He then finds “resident managers” to live in the home for below-market rent. They also pay utilities and routine maintenance in return for keeping the home neat and clean.

The result, Caywood said, is a win for everyone: The owner gets lower carrying costs and a more presentable and secure house to sell; the Realtor might get a quicker sale; the renter gets a high-quality house at a discount price; and Caywood makes money from the rental payments.

Since starting the company in November, Caywood said, he has worked with one house that sold. Now, in addition to the Miller House, he said he has a luxury condo and a horse farm on the market.