This is the final installment of The New Normal, a series about the ongoing impact of COVID-19 on Kentucky businesses and organizations. Check out the previous installments here.
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Throughout this series we’ve looked at all kinds of Kentucky institutions. We’ve seen how Buffalo Trace and Town Branch can’t keep up with demand for bourbon throughout the pandemic. We heard from Country Boy and Blue Stallion on how social distancing has hurt business but the community is still supporting craft brewers. We learned about the campus reimagining at UK at the culture of concern they hope they’re creating among students and staff. Keeneland told us of a re-invigorated commitment to their mission, and a forward looking optimism towards races and Breeders’ Cups to come. All of these organizations impact us common Kentuckians, but of course COVID has transformed nearly every aspect of our society, even far beyond these popular businesses.
In the past ten years, the city of Lexington’s population grew nearly 10%. For a myriad of reasons that include an affordable cost of living, a focus on culture and community, and a central location in the eastern United States, Lexington continues to be an attractive place to live for many and an increasingly realistic place for young professionals to stick around after graduation.
“There are so many reasons [I love Lexington] it’s like asking me to pick up my favorite child which you know you can’t,” Mary Quinn Ramer, the President of VisitLex told us. “I really feel like it’s abundant, you know, an embarrassment of riches in terms of the things that I love about the city. But if I had to, if I were really pushed into a corner and had to pick one thing, I would say for sure, it’s the people. It’s unprecedented, just a season of opportunity in this town and all the good things that are going on, and that’s driven by the people that make it happen.”
This opportunity is abundant and the upward growth trend will most likely only continue to increase as the post-COVID world becomes more decentralized and work-life balance takes a new place in the front of company and employee minds. Yet, the pandemic hits everywhere, and if you walk the streets of Lexington it’s clear to see its influence all around you. In this installment I want to look at how the pandemic has impacted the physical fabric that makes up the Lexington we see daily. That very real impact touches us all, and it’s most easily quantified on the tourism side of things: “It’s nine times the impact, in terms of loss, as 9/11 was on the travel industry, and we thought after 9/11, nothing could come close,” Mary Quinn Ramer paints the picture on the impact of the city. “The experts, the folks that study and come up with these economic models all the time are leading us to believe that it will be at least 2024 before we get back to pre-pandemic levels.”
But it also impacts the Lexington community that lives. The fabric of what makes a city function is a complex and multi-faceted web, but you can get a glimpse of it just by walking around. Perhaps the most ubiquitous supporting industry, the business literally supporting the community we have all around us, is real estate.
“Never before in my landlord experience, whether it be residential or commercial, have there been so many conversations. And those conversations are almost daily, you know, talking and nearly pleading with folks to consider paying you something until they’re able to pay more,” Ryan Foster told us. Ryan is a serial entrepreneur, business owner, and landlord in Lexington. In many instances he’s both landlord and tenant, owning the real estate that his businesses operate in. “One thing I figured out a long time ago is that if I had businesses, I always wanted to own that underlying real estate. That was really important to me so I could control what my rent was and I could control the ebbs and flows of those businesses by way of managing that real estate and that relationship, that landlord/tenant relationship, a little bit better because I was on both sides. What’s kind of helpless in this situation is that I can’t offer much help as a landlord. Even as a tenant, I can’t assist my business.”
Ryan has stakes in businesses ranging from bars we all know to strip malls we drive by regularly. That helpless feeling he’s talking about is one that a ton of people are feeling, both on the landlord and tenant end. As many businesses in various industries are unable to keep revenues at pre-pandemic levels, their ability to pay rent and keep their space is put in jeopardy. On one hand, this could hurt businesses and cause many local shops to close.
“I’m really worried about the small businesses,” Clay Angelucci from Block + Lot admits. “There’s a lot of people on the front lines of restaurants and street-level retail that are just getting crushed and, you know, really that’s what kind of makes Lexington strong, how vibrant the social scene is here. So I’m definitely worried about the small businesses and street level retail and event spaces such like that.”
On the other hand, Clay told us it could also jeopardize revenues for commercial real estate and cause a crash in property values throughout the city. “I think some tenants and/or owners defaulting on their loans concerns me a bit… I would say probably the focal point of my career and passion about real estate would be Downtown, and it’s absolutely struggling right now.”
But these concerns are of course not just impacting commercial real estate and the businesses in that market, but the average everyday residential tenant too. The Paycheck Protection Program, enhanced unemployment, and stimulus package helped almost everybody out at the beginning of the pandemic but the reality is that many are still heavily impacted and the government assistance has dried up. While some individuals are struggling to make rent, their landlords are absorbing some of those losses as well. The market is in somewhat of a holding pattern right now, and it’s really uncertain what may happen in the future.
The thing is though, all of this might provide opportunity. While Lexington has grown, new businesses have opened and local experiences have evolved and expanded. But some stuff has stayed dreadfully in the past. Perhaps COVID is an excuse to look at that, and analyze how we can make our city fundamentally better.
“I’m a little bit disappointed that there hasn’t been more of a ‘Hey, let’s take this opportunity and this disruption to, you know, bring it back in a new form. I think we just kind of piddle around the edges of that instead of making some bolder moves that could be made,” says Randall Stevens, local real estate owner and innovator (see Base110).
So what are those bold moves? How could we utilize this unprecedented time to be, at least a bit, positive? Let’s take a second and think about that. I’ll run through my thought process here. If I was a civil engineer (which I am wholly unqualified to be, for the record) what would I want Lexington to do? It’s important to think of this in the long run, in the context of taking this historically disruptive event and making timely changes that could benefit the lives of Lexitonians for decades to come. Some obvious, initial thoughts? More stuff downtown. More space. More flexible use of the area around the center of our city. Imagine the idealistic city of 2050, that’s what we should be working on. Lexington is at such a unique point of being a small city with a close knit community yet still large enough to support these kinds of infrastructure projects, we can’t let that go to waste. And the good thing is, even pre-COVID, we kind of already realized that.
“To me downtown, you know, really was kind of the epicenter for restaurants, dining, shopping, and entertainment, and it’s critical that that stays healthy because that will recruit more people to live downtown and more businesses,” Clay from Block + Lot shares, “I don’t know what projects you all are looking forward to more than me, but the Town Branch Park project is critical. The convention center is going to add, I think it was 40,000 square feet, more of convention space. That’s going to help the hospitality industry. That’s going to help the street level retail. And then right behind there, you’re going to have this brand new park and amphitheater. That’s really going to become the living room of Lexington.”
If you haven’t heard of Town Branch Park by now, you should read up on it. If you’ve been downtown in the last couple of years you know that construction has already started, but even so it’s hard to fully grasp just how much the multi-million dollar project is going to change the very fabric of our city. With common spaces connecting downtown to the distillery campus to trails throughout the county, the Park along with the new Convention Center will cement Downtown Lexington as the place to be in Central Kentucky. This anchor will draw people from all over, but there does need to be more surrounding it to fully realize the vision for a better Lexington post-pandemic.
“Until we really start promoting more beds and approving projects for residential housing, we’re going to continue to struggle to keep people downtown. I love the idea of opening up the streets. We just historically have always been so opposed to it,” Ryan Foster chimes in. And Randall Stevens agrees:
“I think that there’s a ripe opportunity to reimagine that entertainment district and to probably shut down Short Street.”
With unprecedented operational changes in both the business and government realms this year, it does seem like the time to make small changes throughout downtown. More zoning for residential complexes, more space to keep those residents walking around and entertained, and more focus on fostering community will make the city we love even more lovable. COVID has hurt everyone, and it’s no doubt hurt our city. But, like any businessperson knows, that also presents opportunity.
“Lexington has always somewhat evaded collapses and recessions,” Clay says. “We don’t experience the highest highs and we don’t experience the lowest lows. So I feel like we kind of remain a bubble in that sense and that we can avoid those major collapses.”
And we can take advantage of that fact.
Like we did at the beginning of this series, I also think we should zoom out and apply this situation on a much grander scale. In one way or another, we all have been impacted by the coronavirus and 2020 has slapped us all in the face. Everything is different, everything is changing, and we’re all learning one day at a time. But that’s just the thing: we’re learning and, because of that, we’re adapting. We’re going to get through this just like we have gotten through challenges in the past.
Lexington can become better post-pandemic, and so can we. We can, and I wholeheartedly believe that we will, come out of this stronger and more resilient than ever. That’s what makes us human, that’s what makes us American, and that’s what makes us Kentuckian.