By Greg Paeth
NKyTribune Senior Reporter
For a project with a huge pricetag that may include public buildings like a new city hall for Covington and new offices for Kenton County, much of the preliminary work at Pike and Washington is being done behind-the-scenes, privately and quietly.
The Catalytic Development Fund, based in Covington, a company called 730 Washington LLC, the real estate development firm NorthPoint Group in Cincinnati and the City of Covington are working together on a $65 million project that may include new city and county offices, more than 100 apartments, retail space and parking on what is now a well-worn parking lot bounded by Pike, Eighth and Washington streets and the Steffen’s Rental property to the west.
There have been few public disclosures about the project, which is gradually expanding to the east side of Washington and may encompass a substantial amount of property to the west that is now owned by Steffen’s, which acknowledges that some of its property is under contract to be sold.
With a pricetag of $65 million or more, it would be the biggest investment in downtown Covington since The Ascent, valued at about $50 million, opened with much fanfare in March of 2008. And it dovetails neatly with a long list of other downtown development projects that are underway, including the urban campus for Gateway Community and Technical College, Hotel Covington and Braxton Brewing, which will open Friday in a building that’s barely a quarter-block from the parking lot.
The development is known as “Duveneck Place” because of the statue of Covington artist Frank Duveneck that stands on a small triangle bounded by Pike, Seventh and Washington streets. The low wall there is a favorite warm-weather gathering place for the city’s less fortunate.
Duveneck Place first came to light late last September, when the Covington City Commission signed a development agreement with 730 Washington LLC. At the same meeting, the commission approved a real estate swap that allowed the city to acquire the parking lot from Champ Realty, a company headed by Bill Butler, whose Corporex Companies built Covington’s high-rises overlooking the Ohio River about 25 years ago.
730 Washington LLC has acquired three parcels – 730, 732 and 734 Washington – for $126,000 on the east side of Washington, directly across from the parking lot that is at the heart of the project.
One of the three directors of the limited liability corporation is Richard M. Kimbler, a top executive of NorthPoint, which has a substantial track record for real estate development in Cincinnati. Kimbler declined to talk about the project earlier this week. He referred questions to Jeanne Schroer, president and CEO of the Catalytic Fund.
Schroer, whose non-profit was created to facilitate development in the older cities that hug the Ohio River shoreline, was reluctant to talk. “It’s still premature (to talk about). There’s too much talk already and everybody thinks it’s going to happen tomorrow,” Schroer said. “It’s bad real estate policy to discuss things before they are done.”
Neither NorthPoint nor the Catalytic Fund are mentioned in the 84-page development agreement, which includes a 25-page list of all of the properties inside a much larger portion of downtown Covington that is defined as the “Center City Development Area.”
City Solicitor Frank Warnock said Wednesday that the parking lot swap has not been completed because there are two problems with the title to the property that Butler will receive in the trade. That parking lot is between the approach to the Roebling Suspension Bridge and Greenup Street.
Warnock said there’s no quick fix for the title issues, which may not be resolved for a number of months.
In early February, some four months after the city commission approved the development agreement and parking lot trade, Schroer appeared before the Kenton County Fiscal Court to gauge its interest in moving its offices out of the 10-story county building at 303 Court St. and relocating them to the project at Pike and Washington.
Schroer proposed that the county hire the Catalytic Fund, which would determine if developers might be interested in buying and renovating the county building. As of this week, the county had not sought help from Schroer on marketing the building.
But that doesn’t mean that the county is disinterested in moving its offices, Kenton County Judge Executive Kris Knochelmann said.
Knochelmann said he wants to do everything he can to retain offices in Covington and that the building at 303 Court, which is about 45 years old, needs some heavy-duty maintenance. “There are problems with the building and I think in short order we’re going to have to invest some serious money in the building,” said the judge. He said the elevators, boilers and air conditioning system may need to be replaced soon.
“We have not made any decisions. I want to see us stay in Covington. It’s a good location and it’s good for the city and good for the people of Covington,” Knochelmann said. “And we might be able to save some money if we can share some space.”
Since the Kenton County Jail was relocated from the courthouse in late 2010, only six of the 10 floors are being used, he said. He also pointed out that the city is leasing office space on Pike Street. “How did this happen?” asked Knochelmann, who pointed out that the city and county had shared space at 303 Court in the past.
Covington City Manager Larry Klein stressed that the city wants county offices to remain in Covington.
Warnock and Klein insisted that the city is on firm ground in signing the development agreement without seeking proposals from other developers who might be interested in building in downtown Covington.
Warnock said state statutes are very clear about giving a city the right to swap land with a private party for the purposes of economic development that will create jobs, increase city revenues and broaden the city’s tax base.
“I’m anxious to see it move ahead as soon as possible,” said Covington Commissioner Chuck Eilerman, who added that he has heard that the project’s pricetag has edged up to about $70 million.
Eilerman thinks the city needs a new city hall as soon as possible because the leased space on Pike Street doesn’t work well for the city’s needs. “As I understand it, the county is trying to work through the numbers,” Eilerman said in reference to Kenton County’s participation in the project.
Besides the property acquired by 730 Washington LLC on the east side of Washington, the developers have made overtures to Steffen’s about buying some of its land.
Arden Steffen, who runs the family-owned tool and party supply rental business, said part of the Steffen’s property is under contract to be acquired. She said earlier this week that she would not comment further because of an agreement not to disclose anything that she has discussed with the developers.
Steffen’s fronts on Pike Street but the company owns land that extends back to Eighth Street, including a substantial multi-story building that is immediately adjacent to a railroad overpass. A blurry overhead photo of the project that is part of the development agreement shows that the primary Steffen’s building will be retained while property to the east, west and south will be acquired for the project.
The Parish Kitchen at Pike and Russell, which provides lunch for the needy, appears to be just outside of the project boundaries.
That same photograph also shows the project includes the city-owned parking lot at the southeast corner of Seventh and Washington. It is often referred to as the “Mad Lot” because of the brightly painted walls and the off-beat events that have been held there. It butts up against the Braxton Brewing building.
The developers also have approached the owners of Be Concerned, a social service agency at 710-20 Washington, about selling their property for the project.
“We have been approached about selling the building, but no decision or final offer has been made,” Andrew Brunsman, director of Be Concerned, said in a brief, prepared statement. Be Concerned is a food pantry that provides food to the needy and also sells clothing and housewares through its thrift store.
Besides Kimbler, another principal in 730 Washington is Gerald E. Atkins, who is listed with the secretary of state as the manager/member of the Mall Road Shoppes of Florence LLC. The Boone County Property Valuation Administrator lists Mall Road Shoppes as the owner of 7901-05 Mall Road that is described by the PVA as the “Starbucks Complex,” which includes eight businesses. The property is assessed at nearly $3.2 million.
The other member/manager of the LLC is JRT Holdings, a creation of John R. Topits, who owns a large home on Riverside Drive in Covington and has made several recent donations to the City of Covington.
Early in the week it was announced that Topits had donated $50,000 to the city for its Red Bike program, which would fund part of a program that would create a network of bicycle rental stations in the city. Early this year he was recognized for donating $26,000 to the Covington fire department to purchase equipment and he also has donated to the city to cover the cost of equipment for the police department.