Day 4: Not just home runs

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When finished, the Whitney Building at 11 E. 5th St. will house a commercial venture on the ground floor and apartments on the upper floors.

With City’s help, small-scale development driving Covington surge

In honor of National Economic Development Week, May 7-12, Covington is calling attention to its aggressive efforts to work with its business community and other partners to generate jobs, attract investment and create a vibrant commercial and tourist economy. Today’s article focuses on small-scale development and programs.
Headlines tout mega developments like the $70 million Duveneck Square and the $36.4 million headquarters of global clinical trials firm CTI, but the story of Covington’s economic surge is best told by the Whitney Building.
Having existed in parts of three centuries, the narrow, three-story brick building at 11 E. 5th St. is one of many rehab projects in a single block.
It demonstrates how collaboration between the public and private sectors can change a once dilapidated area.
And it illustrates an old adage in economic development: Everybody loves grand-slam home runs, but most “wins” involve the cobbling together of singles, doubles and sacrifice flies.
“The huge projects are obviously a cause to celebrate, and we’ve had some great ones,” Covington Economic Development Director Tom West said. “But day in and day out, much of the development in the City occurs on a much smaller scale - a fledgling business getting its start in an empty storefront, a historic building being rehabbed into a couple of condo units, the second floor of a long-standing small business turning into apartments.”
Added West: “A lot of our time and energy at City Hall is focused on supporting this type of organic, incremental development.”
As best can be determined, Grover Cleveland was president of the United States when the Whitney Building first opened as a commercial storefront with loft apartments upstairs.
It apparently started as a plumbing shop and then became a land title company, said one of its owners, Quinn McMurtry of ECCE Properties. “In the 1930s or ‘40s, it became a series of bars,” he said.
Over the next 110 or so years, the building gradually succumbed to neglect, fire and foreclosure. By 2010, the Whitney was by most accounts a drain on the area, its upper floors vacant, the Bottoms Up bar on its ground floor a source of complaints by neighbors and police.
Tired of problems, the City closed the bar by buying the building and, after a false start, sold it to ECCE Properties in 2017.
“When we bought it, it was substantially gutted, but you could tell that it was in pretty bad shape,” said Todd McMurtry, who with his brother, Quinn, and father, Stephen, make up ECCE.
The company’s $475,000 rehab of the building will return 11 E. 5th to its original use - a professional-type office on the first floor, and one-bedroom apartments on each of the upper floors. It should be finished in 30 to 40 days.
The rehab was the site of a “Hard Hat tour” sponsored by the Covington Business Council on Thursday afternoon. Visitors noticed a block radically different than it was years ago.
On one side of the street, ECCE recently finished renovating the top floors of 7-9 E. 5thStreet into two apartments, much like it’s doing with the Whitney Building. And the old Greyhound Bus station at East Fifth and Madison Avenue became Lexington-based Forcht Bank’s first Kenton County location about 1½ years ago.
On the other side of the block, the Odd Fellows Hall - which among its businesses includes The Pinnacle and The Grand Ballrooms - anchors the corner. The former Club Venus strip bar at 12 E. 5th is now the trendier The Globe nightclub. Angie Billiter of Earl Franks Sons/Daughters renovated the top floor of 14 E. 5th, which features the Persian-themed House of Grill restaurant on its ground floor, into two apartments. And The Milburn Group bought the former Floyd’s 7-11 Club bar and a neighboring laundromat at 18-20 E. 5th for renovation.
“The block is pretty much fixed now,” quipped Todd McMurtry.
The irony, Quinn McMurtry said, is this: “When it opened, the Whitney Building was part of the growth and rehabilitation of Covington in the late 1800s. Now it’s coming back again as the urban core of the City is surging.”
Quinn McMurtry said the company has an image of who will move in: a professional service-type office on the ground floor and in each apartment a millennial who either works downtown or has a home office and who will eat, drink and shop in neighboring establishments. “They want the urban experience and are part of the modern economy,” he said.
The synergy between people who live, work, shop and recreate downtown is exactly what City officials are creating.
Covington employs an array of City- and federally funded incentive programs that use different vehicles (loans, grants, tax rebates, rent subsidies) for different kinds of projects (façade improvements, upper floor rehabs, small business locations, vacant property rehab, large-scale development from scratch) to accomplish different goals (recruiting new businesses, helping existing businesses grow, rehabbing vacant property and attracting residents).
In 2017, the Covington City Commission approved $1.5 million in direct incentives for 28 different projects. Those incentives helped leverage $14.2 million in investment across Covington’s business districts, said Ross Patten, Economic Development Specialist for the City.
In the Latonia neighborhood alone, they included a façade improvement to Emerson’s Bakery, rent subsidy for Moonrise Doughnuts and a payroll tax reimbursement for larger employer Blair Technology Group on Boron Drive.
Job creation wasn’t the only goal of those 28 projects, but developers reported that they would be creating or saving almost 440 jobs, Patten said.
Covington’s Small Business Program, which includes incentives to help with rent for a new business and façade improvements, was so successful that it ran out of money in the first six months of the fiscal year - even though its budget had doubled from the year before.
That’s because one of the City’s priorities is to fill vacant storefronts in all of its business districts, Patten said.
“Vacant and rundown buildings are one of the first things people notice,” he said. “It’s the worst possible impression for visitors or for someone looking to invest or move a business here.”
Another priority is housing.
Businesses - whether they’re downtown, in the MainStrasse Village tourist area or in a neighborhood business district - need workers and customers.
Given that tie between housing and “traditional” economic development, the City puts its federal HOME and CDBG funds to use in that area, said Covington Community Development Manager Jeremy Wallace.
For five years Covington has helped developers renovate the upper floors of commercial storefronts into apartments. So far, eight projects and 23 apartments have been finished or are under way, including the Whitney Building and others on East 5th Street, Wallace said.
That was an initial target area. Other target areas were along Pike Street and south on Madison Avenue. Last year, Covington expanded the Upper Floor Rehab program to the Ritte’s Corner area of Latonia and has been working with officials there to find upper-floor lofts to rehab, Wallace said. One such project has been trying to get under way, he said.
“There are definitely other areas of mixed-use we’d like to target,” he said.
Recognizing that new employees moving to the City often want to buy a house right away, Covington also has a homebuyer assistance program that uses federal HOME fund to help with down payments and closing costs, depending upon a person’s income.
Since the program’s inception, the City has helped over 1,000 homebuyers, Wallace said, including some young workers just starting out. “They find that they can get downtown from the surrounding neighborhoods in just a few minutes,” he said.
Another important resource for both developers and home-owners wanting to fix up their buildings is the City’s historic preservation office. Covington has seven historic preservation overlay zones and 17 National Register Historic Districts, and exterior work within those areas has to be compatible with the historic character of the neighborhood.
The City helps organize an annual two-day series of workshops to educate property owners about regulations and techniques, connects them to vendors qualified to do historic preservation work and trains architects and planners.
Covington Preservation & Planning Specialist Emily Ahouse also routinely visits sites with property owners to discuss preservation issues and helps them apply for state and local tax credits.
Ahouse said the number of historic rehab applications, which runs the gamut from new windows to full renovations, has steadily increased the last few years.
In the federal fiscal year that ended Sept. 30, 2015, the City received 133 applications, said Ahouse, a number that had been steady since 2011. In the year that ended Sept. 30, 2016, there were 178. And in the year ending in 2017, there were 203. Going into summer, the busiest rehab season, already this fiscal year there have been 94, she said.
“The large-scale new developments get a lot of the attention, but what’s often overlooked and equally as important to our economic development is all of the small-scale work occurring in our residential historic districts,” she said. “The cumulative investment of both longtime property owners who are maintaining and updating their buildings and new property owners drawn to Covington’s walkable, historic, urban neighborhoods has a significant impact on our neighborhoods.”
To illustrate her point, Ahouse pointed to three examples: 
  • Scott Salyers of Singletrack Properties has a residential rehabilitation in progress and wrapping up at 622 Philadelphia St. 
  • Toby Moeves of MB Custom Construction completed and sold one unit of the duplex at 114-116 W. 11th Street and is finishing the other, providing a big transformation of a problem property. 
  • And Gerald Fraley is doing a comprehensive rehabilitation of the property at 513 W. 7th St.
So, as the Economic Development Department is putting together its budget proposals and programs for next year, it wants to not only replicate but also expand this year’s success.
“We’re currently looking hard at ways to create the same kind of buzz on a different scale in some of the smaller business districts in emerging hotspots of Covington,” West said. “We think there are some really good opportunities that we want to seize.”
For the Covington Business Council, the surge of development has created vibrancy, said Pat Frew, its executive director.
Attendance at its networking events and Hard Hat Tours is impressive, he said, and membership is way up.
When Frew came to the CBC in August 2010, it had 130 members. Thanks to aggressive recruitment efforts, it now has 363, ranging “from the pretzel lady at St. Elizabeth to St. Elizabeth itself,” he said.
One direct impact of the City’s economic momentum, Frew said, is this: Cincinnati developers, investors and business officials have begun crossing the Ohio River to join. “They want to be on the ground over here,” he said.
He also tells a facetious story to make the same point.
“Back when I first came to the CBC, I went out on a lot of recruiting trips,” he said.
“I’d tell them, ‘We want you to be a part of our organization, and there’s going to be good things happening in Covington’ - and I’d have my fingers crossed behind my back,” Frew said.
“I don’t have to cross my fingers anymore.”