
L-R: Phil Scherer, Jack Trawick, Karen Williams, Mark Isaacs, Patti Clare
Last night, local architects gathered to hear five business and government leaders discuss the future of Louisville’s “Changing Downtown Economy” at Felice Vineyards on East Market Street. The group tackled issues surrounding downtown development, the economic crisis, and convention tourism.
Opening remarks began on a cheerful tone from the self-proclaimed “Downtown Cheerleader” Patti Clare, Interim Director of the Downtown Development Corporation, but progressed to a more somber and sometimes outright bleak outlook towards the end. The discussions grew heated over some issues as panelists clashed on the realities surrounding development and economy today in Louisville.
Patti Clare noted how much progress has been made in the 20 years she has been involved with downtown development. She remembers as massive projects came and went with little lasting impact and how in recent years confidence in downtown had been luke-warm at best. She has been delighted over the last couple of years as “downtown has seen a spark” and become a “hot” market with momentum and confidence building in many recently announced projects.
The credit crisis changed all this and she warned that Louisville “cannot fall prey to tentativeness” and become fearful of downtown investment. While there has been a drastic reduction in new housing permits across the board, she is heartened that there has been no decrease in renovation permits since 2007.
While hopeful large projects like Museum Plaza or Iron Quarter will one day make it through, she realizes that small projects (like the Marcus Lindsay Church condos, Whiskey Row Lofts, and Bycks Lofts) will carry downtown through to better times. Mega-projects are inherently more complicated and take more time.
Karen Williams, the Exec. VP of the Louisville Convention & Visitors Bureau, also spoke about the progress she has seen in downtown as the convention business has grown with the expansion of the convention center, construction of new hotels like the Marriott, and renovations at the Galt House. While we lag behind other cities in terms of hotel rooms, we are a leader in convention space.
She explained how the arena will strengthen Louisville’s appeal even more. Now that the project has moved out of the planning room and has begun moving dirt, she says interest from groups is beginning to take off and events have been signed for as far out as 2025. Williams adopts a “you can’t lose what you don’t have” strategy to the convention business noting the Louisville market has always been strong with professional associations, but lacked corporate events which are hurting most in thie economy.
Jack Trawick, Director of the Center for Neighborhoods, shifted the conversation to housing. He expressed the need for people to live in the central urban area and noted that downtown housing cannot be a slogan or just an idea thrown out by the city. It requires real risk and actual investment from the city and private interests.
Phil Scherer, President of Commercial Kentucky, picked up on the topic using his experience developing the Billy Goat Strut, Preston Pointe, and Fleur-de-Lis on Main to show change in Louisville. The city has come a long way since he began downtown development in the 1980s. Back then, he quipped, the city reassured him they were right behind him on development, but he didn’t realize then just how far behind. His insights into the local economy left the crowd feeling sobered, but not completely depressed (quite a feat considering how much Felice wine was being consumed).
He believes in not exaggerating downtown progress. He explained that there are less than 100 downtown condos for sale, but as recently as the Ryder Cup, the mayor was bragging the city had 2,000 new units downtown. Scherer worries that over-stating figures like this puts the community in a comfort zone where they believe development is where it should be. It can result in a development slowdown. He also sees many of the mega-projects regaining a footing in years to come, noting that a new Humana tower, though probably delayed in the short term, could potentially begin in 2011 or 2012.
Mark Isaacs, President of Legacy Homes and developer of the Legacy Lofts, feared he couldn’t paint such a rosy picture. He explained how he believes Louisville has the potential to join the ranks of great urban cities, but currently must come to terms with its place as a tertiary market, not the secondary market we all believe ourselves in, or the primary market we aspire to be.
He noted that for downtown housing, in Louisville, a developer is extremely lucky to sell one unit per month per project, a dismally low sales rate for any progress on the housing front. The reality is sales are even lower than that. He feels that currently, despite the economic downtown, Louisville cannot support the level of development that has been proposed or that the city desires.
He told how developments across downtown aren’t making money now, as the economy has stripped a standard 20% margin of return, and how Louisville is over-extended in the luxury housing market. He further predicted that unless Louisville nurtures a creative class to the level competitor cities have, we will remain far behind our peers like Charlotte, Nashville, and Austin.

The Crowd Asked The Panel Questions
And the discussion is just beginning to heat up. More after the click.