The Covington City Commission announced at their meeting Tuesday night that Fort Mitchell-based developer Drees Homes will likely be the first residential developer at the Covington Central Riverfront development site, located at the former site of the IRS building.
The commission heard a presentation from Covington’s Economic Development Director Tom West, who along with other city staff members recommended the proposed development agreement. The commission placed the proposal on the consent agenda for next week’s legislative meeting, meaning that it will likely pass.
“This has been an extraordinary week of progress for Covington and, particularly, the CCR site,” said Mayor Joe Meyer.
The proposed development would sit on block B of the development site, one of the smaller land parcels, which runs east and west along 4th Street between Russel and Washington Streets.
“This is the first of many development agreements that staff anticipates will be coming your way over the next year or so,” said West to the commission.
West said that Drees anticipated the cost of the development to be about $7 million and that, if approved, it would likely begin construction later this year. The townhouses would be split into divisions of four, and the construction is likely to take about 30 months to complete. The space in front of the townhouses will have sidewalks and bike lanes, and each unit would sport its own private garage, which West argued would curtail on-street parking.
The townhouses themselves would be a mixture of two and three-story buildings with masonry facades and interiors. Finally, the houses would feature outdoor courtyards with iron fences, “a nod to the historic iron fences that we have here in Covington,” West said.
Drees Northern Kentucky Division President Ben Taylor said the company anticipated starting prices for the homes to be about $500,000.
A study of housing in Northern Kentucky has revealed troubling trends for housing in the region, with the largest need being for “workforce housing” for households earning between $15 and $25 per hour, with monthly housing costs between $500 and $1,500. The region needs about 3,000 more housing units to provide for people within that income range, according to the study. The demand for one- to two-bedroom rentals and owned properties consistently exceeds their supply, while supply for three and four-bedroom properties consistently exceeds demand. The study suggests that the region needs to build 6,650 housing units to support economic development in the next five years, which equates to 1,330 units per year. Read more here.
Understanding NKY’s housing shortage
“We do project positive [return on investment] on this, about 3.3%,” West said, adding that the city expected about $33,000 annual property taxes from the development. Moreover, the development is located in a tax incentive financing, or TIF, district, and West said the city expected about $1.4 million in TIF-generated funds that will be reinvested back into the district.
The commission also heard three proposals related to infrastructure on the Central Riverfront site.
The first was a proposal to issue about $18 million in bond anticipation notes to pay for early infrastructure construction. Bond anticipation notes, or BANS, are short-term debt instruments wherein a city solicits cash from investors, issuing them a note saying the city will pay the money back with interest once it secures normal general obligation bonds from a institutional investor. BAN issuances tend to be faster than normal bonds and, thus, are one way city can get a quick injection of cash. The measure was an ordinance, so it will need to go through two rounds of reading–the first will take place next week on March 26–before the commissioners can cast a vote.
The second proposal was for the infrastructure construction itself. It was a contract proposal with Alexandria-based company Bray Construction, who will complete the early infrastructure work between and around Third and Fourth Streets. The contract is worth roughly $14.9 million, and the city expects construction to be finished around September 2025.
Finally, the city heard a contract proposal from Terracon, a Cincinnati-based consulting firm, that will provide geotechnical oversight for Bray’s work. The contract is based on work performed, and the amount they will receive will not exceed $211,050.
Both the Terracon and Bray Construction proposals were placed on next week’s consent agenda.
City Commissioner and mayoral candidate Ron Washington commended the work of the commission, the city staff as well as Kentucky Sen. Chris McDaniel (R-Ryland Heights), who was instrumental in securing a possible $150 million appropriation of state money to bring NKU’s Chase College of Law and the University of Kentucky’s College of Medicine to the development site’s G block.
“This is a light at the end of the tunnel for a lot of our budget issues,” Washington said. “It’s not going to be an instant check; but it’s a light at the end of the tunnel, and I’m glad to be sitting up here to witness this.”