Construction will begin soon on 25 homes in the Russell neighborhood in West Louisville, with the first homes hitting the market by August.
The single-family homes will be built on vacant lots, with construction starting in late March or early April. The plan is for all the homes to be completed by May 2017, said Jason Lee, a director of Russell Development Co., a nonprofit organization that owns the properties.
“We’re very excited about working in the Russell neighborhood,” he said. “It’s a great, historic neighborhood we want to return to its vibrancy.”
Most of the homes will be built on Cedar Street in Russell, with some being built on South 18th, South 19th and South 20th streets, according to Jefferson County records.
Lee said Russell Development is investing $4.2 million to build the 25 homes. Of this, $3.2 million will go toward construction and the rest will be for architectural plans, legal fees, environmental plans and the like.
He said the project is being funded via Community Trust Bank Inc. in Pikeville, Ky., grants and the federal New Markets Tax Credit program.
The homes are expected to range in price from $105,000 to $150,000. They will have two or three bedrooms and will range in size from 935 square feet to 1,460 square feet. There will be two-story and one-and-a-half-story models.
Lee said the homes will be sold at market value and are not subsidized housing.
Russell Development Co. was formed in November, according to the Kentucky Secretary of State’s office. It is a distinct legal identity, but Lee said it shares management with Community Ventures Corp., a Lexington-based nonprofit.
Community Ventures provides home financing, among other services, and has an office in Louisville.
Lee also is CFO of Community Ventures. Kevin Smith is both a director of Russell Development and president and CEO of Community Ventures. The third director of Russell Development is Adam Simon, a member of Right Path Financial LLC in Crestwood.
Community Ventures transferred the deeds to the 25 properties to Russell Development on Feb. 17. According to the deed on file with the Jefferson County Clerk, the transaction was valued at $360,000, but Lee said no cash changed hands.
Louisville Business First wrote about Community Ventures in January, when we broke the news that it would provide mortgages to Portland Investment Initiative tenants. Area developer Gill Holland is founder of the Portland Investment Initiative, which is dedicated to redeveloping the Portland area.
Lee said the deed transfer was needed to get the home construction financed. “It’s a very complicated financing structure,” he said. “To get that accomplished, we had to create the Russell Development Co. to do these projects.”
He said that Russell Development will develop and build the homes and that Community Ventures will manage the development process.
The homes are being built as part of an ongoing effort by Community Ventures to rejuvenate the Russell neighborhood, Lee said. This effort includes the Chef Space Kitchen Incubator, at 1812 W. Muhammad Ali Blvd., which offers space for entrepreneurs who want to go from making their food at home to making them in a commercial kitchen.
The Chef Space property was sold last month by Community Reinvestment Properties LLC to Russell Development for $600,000, according to county records. Lee said Community Reinvestment Properties is a subsidiary of Community Ventures. Lee said Community Reinvestment Properties sold the property to Russell Development to finance the completion of Chef Space, though he didn’t add details because of the complexity of the transaction. “It’s operated by Community Ventures but the ownership is by Russell Development Co.,” he said.
“We’re working with the city of Louisville to redevelop that neighborhood and revitalize that neighborhood,” he said. “We feel like home ownership is a very important part of helping the neighborhood revitalize.”
The home construction marks the next phase in an ambitious plan called the “Choice Neighborhoods Initiative Transformation Plan for Russell.” The plan is a joint effort between the Louisville Metro Housing Authority, the Russell community and Louisville Metro Government.
The plan originally said Community Ventures would develop 29 homes for sale on infill lots. Lee said that number has changed for two reasons. One is that Rebound — a subsidiary of Louisville’s Urban League — is slated to build three of the homes.
I contacted Kevin Dunlap, Rebound’s manager, to learn more about this project but he didn’t immediately return calls.
Lee said the second reason the number changed is because two of the lots were combined.
This article appeared first in Louisville Business First by reporter David Serchuk. David Serchuk covers these beats: Startups, technology, finance and venture capital, residential real estate, professions (law, accounting, engineering), arts and entertainment.