Real estate experts say Kevin Cogan’s big plans could be just what Louisville needsJuly 29, 2016
This article was written by Marty Finley and originally appeared in Louisville Business First.
A proposal by Kevin Cogan and his Jefferson Development Group to build a 35-story skyscraper at the intersection of Lexington Road and Grinstead Drive seems outrageous to some.
The project has been called by some detractors too dense and out-of-scale for the area — a narrow but heavily trafficked intersection populated by a mix of single-story retail and restaurant buildings bordering Cherokee Park. But Louisville real estate veterans believe it’s exactly the kind of outsized idea local developers have been too timid to try — until now.
“We’ve accepted little things and called them big things,” said attorney and developer Tim Mulloy, who owns apartments and other real estate around Louisville and has partnered with hotel developer Steve Poe to bring a Homewood Suites downtown. “It’s time to gamble on big things and try to win some of them.”
Even something that appears outlandish at first blush.
Cogan’s project would include a hotel with about 250 rooms, more than 700 apartments, retail and office space. The total square footage was not disclosed during a design charrette in June, but initial estimates show the project would include 100,000 square feet or more of office space and at least 50,000 square feet of retail space, much of which would be at street level. The cost has been projected to be at least $200 million.
“Some may say that’s pie in the sky,” Mulloy said of the high-rise project. “My father said, ‘can’t never accomplished anything.’ When Kevin hears can’t, he just keeps going.”
And the tower is just one of two major projects that Jefferson Development Group has proposed this year. The company also envisions a 107-acre development on Factory Lane off Old Henry Road that would include more than 1,800 apartments in multiple buildings on half a dozen lots.
That East End development would have a four-story, 160,000-square-foot office building, a two-story 112,000-square-foot health club, a “retail and vehicle sales facility” and a 232,000-square-foot senior-living facility with 203 units.
Jefferson Development Group will need significant financing and as much or more patience to pull off the two projects, though it has not disclosed where the financing will come from.
Those we spoke with following the project announcements said Cogan has the wherewithal, financial and otherwise, to make them happen. And his success, they say, could be transformative for Louisville.
What we know so far
Full disclosure: Cogan showed me an early rendering of the proposed high rise last year, long before Jefferson Development Group debuted the project in late June to a room of observers during one of three planned design charrettes at Louisville Collegiate School.
I knew this project was planned on a grand scale, but I didn’t realize it would compete in size with the 30-story Omni Hotel project under construction in downtown Louisville.
Cogan already has courted controversy and legal action from the Cherokee Triangle Association for his Willow Grande high-rise condo complex, facing complaints both about height and density. Cherokee Triangle Association officials did not return my calls seeking comment on the Lexington Road project.
The new high-rise proposal already has drawn some pushback from neighborhood residents for its height, density, impact on local traffic, potential stormwater and sanitary sewer system concerns and its proximity to Cherokee Park.
I reached out to Jefferson Development Group for comment on the feedback received during the design meeting, but both president Erica Hodge and chairman and CEO Cogan declined to comment. Hodge said the firm respects the charrette process and doesn’t want to make statements during a sensitive time.
But Bill Bardenwerper, a local zoning attorney representing Jefferson Development Group, provided a brief update by e-mail.
“Nothing is new at this point, as the architects and land planners are undertaking a lot of added investigation and both alternate and supplemental design work,” Bardenwerper said by e-mail. “So the next charrette is two weeks off from whenever the architects tell me they have something better, fuller and/or different to show people. We will not officially file an application for anything, apart from the preapplication review, until after this follow-up charrette or charrettes.”
But Bardenwerper did promise some significant changes, saying there will be “more, different and better stuff” regarding the project down the road.
‘You’re going to turn a lot of heads’
It should be noted here that Louisville Metro Government officials and several local developers and real estate brokers declined interview requests about Cogan’s project.
But commercial real estate experts I spoke to said they hope compromise with the neighborhood can be reached to make the tower project viable.
“Kevin is, in my opinion, a great asset,” said Reed Weinberg, president and principal of Louisville-based PRG Commercial Property Advisors. “I think he’s got tremendous vision and has tremendous attention to detail in his development. Local developers … put balance sheets on the line. We should really embrace them. Most big projects are from out-of-state people.”
Weinberg described the Lexington Road project as something large enough to transform what he sees as the city’s most underused corner by creating a mixed-use development that could attract new business to Louisville.
Those companies, he added, will have educated employees who may be drawn to relocate to Louisville by a complex of this size.
“Something big and large-scale and high-profile, you’re going to turn a lot of heads,” he said.
And keeping that size, he said, might be crucial to its economic viability. Lopping four or five stories off a design might sound easy, Weinberg warned, but it could wreck the project’s profitability.
The Factory Lane project, Weinberg said, is another that could raise Louisville’s profile and draw the highest rents in the city because of its walkability. Weinberg said Old Henry Road is the “next frontier” for development in Louisville.
And, he said, Cogan has proven he can create successful living communities.
“His apartments at Claiborne Crossing leased up at the drop of a hat,” he said.
Claiborne Crossing is a gated community off Old Henry Road near Lake Forest with one-, two- and three-bedroom apartments starting at more than $1,200 a month. The development, which cost in excess of $30 million, was built by Jefferson Development Group and opened in 2014.
‘Kevin has made a career out of this’
Tim Mulloy provided us a look behind the curtain on Cogan’s other project, on Factory Lane. Mulloy’s a board member of the St. Joseph Catholic Orphanage Society, which owns the 107-acre parcel along Factory Lane that Cogan has the option to buy.
Mulloy said the society looked at other attractive offers but was impressed by what Cogan brought to the table, his idea for the site and his willingness to pay market value.
“Apartments used to be considered somewhere that young people lived, but we know that’s a myth,” Mulloy said of the Factory Lane development. “We are pleased. For the same reasons that we chose his company. He’s from here, he knows this market, he’s worked tough deals before. He’s tenacious and has a lot of skills.”
That tenacity, he said, is why Mulloy said he’s so enamored by Cogan’s vision for Lexington and Grinstead, as well.
And Mulloy has a message for naysayers: You’re not thinking big enough.
“It’s that kind of thinking, that we’re not Nashville, Charlotte, Indy and Raleigh,” he said, adding that increased traffic is a sign of growth and can be a positive if handled correctly.
He also said the project may not face the same scrutiny from homeowners as Willow Grande because the development would not overshadow residential homes.
If Cogan finds a way to pull it off, Mulloy said that corner could explode, particularly as the Louisville Metropolitan Sewer District finishes its work with the former Jim Porter’s Good Time Emporium site and potentially offers it up for private development. (The land will be used as an equipment-staging area while MSD constructs a $45 million underground retention basin for stormwater along Interstate 64. Construction is expected to start in mid-2017, with completion in late 2020.)
“It’s those types of projects that actually makes us feel like we’re moving something forward,” Mulloy said. “If I didn’t know him, I’d salute him for thinking big and doing something huge.”
Cogan has not revealed his financial support on either project, but multiple sources with knowledge of the two projects say Cogan is well-connected locally and has a network of financial support to help make these dreams a reality.
The bigger picture
Mark Wardlaw, senior vice president of brokerage for Louisville-based NAI Fortis Group, said both projects are fascinating because they could close gaps in Louisville’s real estate loop.
Namely, he said the Lexington Road project could provide a link between NuLu near downtown and East End development.
“We have this no man’s land between the two,” he said.
Similarly, he said the Factory Lane project could bridge the divide between Middletown and Westport Road, providing more suburban density and creating an impetus for other developers to take risk and fill in other spots.
Wardlaw declined to comment on the potential controversy of the two developments, saying only of the Lexington Road project that he hopes neighborhoods get the design concessions they need to support the project while Cogan gets the density he needs to make it economically feasible.
Instead, Wardlaw pointed to cranes in the sky as a sign of progress, and he said you find no shortage of those cranes in Louisville’s peer cities, such as Indianapolis and Cincinnati.
“If we want to continue to compete in that same type of arena, we have to have similar types of developments,” he said.