Developer Alan Haehnle believes historic commercial buildings shouldn’t be left abandoned and dilapidated. Instead, he’s dedicating his time and money to transform these buildings into new offices and apartment buildings.
“Everything’s got a story, and everything has character,” he told LINK nky.
Covington, with a wealth of historic buildings, is Haehnle’s focus. As building conversions become more mainstream, cities are using the practice to help solve local issues, particularly housing shortages.
Across the Ohio River in Cincinnati, commercial-to-residential developments are a key aspect of the city’s plan to tackle the local housing shortage. Some of the city’s most iconic buildings are being renovated into residential spaces. Carew Tower, a 49-story, 574-foot art deco skyscraper, is becoming a residential tower with over 350 apartments, short-term rental units and amenities such as co-working spaces.
Northern Kentucky leaders and residents alike are working together to find innovative ways to address the region’s housing shortage.
If about 6,600 new housing units aren’t added to what’s currently available in Northern Kentucky within the next five years, a recent study found that the region will start losing people – and fast.
Every other month, LINK nky sends out a newspaper to all 173,000 Northern Kentucky households. We call these Super Issues. Each of these editions takes a deep dive into a topic that affects our community and the solutions that have made our region better.
This month, we’re talking about housing and how our region is addressing that sobering outlook.
We’re exploring creative ways zoning could allow for the creation of more housing; whether adapting and reusing old buildings could make a dent in the problem; we explore the many ways people can get assistance around the region; and more.
You should be getting your Super Issue in the coming days. We encourage you to sit down and take your time with it. The topics we tackle are heavy and hard to fully take in while scrolling online.
But, seeing as how you’re reading this online (and because we want you to share these stories of resolve and positive problem solving far and wide), we also wanted you to have links to each of the stories.
Click here to read my introduction to the series, exploring how even a mindset can be part of making change. From there, you can read the other stories in this super issue, or find links to them below:
Thank you for reading, and please, if you have feedback, ideas, or want to find ways to connect to your community, reach out to me at mgoth@linknky.com.
-Meghan Goth, executive editor
What is a Super Issue? A note from the editor
A block south, the historic Union Central Tower, now known as the 4th & Vine Tower, also is undergoing a commercial-to-residential renovation. The tower, opened in 1913, served for 50 years as headquarters of the Union Central Life Insurance Co. and then was occupied by Central Trust (later PNC) Bank. In its second century, it’s being transformed into an apartment complex with over 200 units.
‘A real sense of place’
Converting historic buildings for uses other than their original purpose is called adaptive reuse. The idea is to promote sustainability and conserve resources while preserving historical or architectural significance, according to the European Architectural History Network.
In Northern Kentucky, too, adaptive reuse projects are a crucial component in addressing the local housing shortage. A Northern Kentucky Area Development District housing study, released in 2023, found that the region needs to build approximately 6,650 housing units to support economic development in the next five years, an average of 1,330 units per year.
In conjunction with each of our super issues, we hold a Community Conversation event to bring the community together to talk about solutions and provide resources.
Our event about the region’s housing shortage is scheduled for June 12 from 6 p.m. to 7:30 p.m. at the Erlanger branch of the Kenton County Public Library.
Click here to learn more about the speakers and to register for the free event. We hope to see you there!
Want to join the conversation?
Further, Northern Kentucky requires 3,000 more housing units specifically for households earning between $15 and $25 per hour. The common housing size for this demographic is one- to two-bedroom rentals and owned properties, also referred to as workforce housing.
Developers, especially in urban areas, have turned to adaptive reuse to generate more housing supply. Covington and Newport, both well over 200 years old, have a wealth of historic structures ripe for adaptive reuse.
Tony Milburn, founder of the Milburn Group, a real estate development firm, said Covington’s historic building stock allows developers to create contemporary spaces while also capturing the city’s essence through the preservation of its historic past.
“So much of the old buildings, they feel a lot more human scale,” Milburn said. “They have so much character. They usually tell a story when you look at them, and it just gives you a real sense of place that a lot of new spaces don’t do so much or don’t do so well.”
The Milburn Group has renovated several buildings in downtown Covington, including Oddfellows Hall at 523 Madison Ave. and, most recently, the Bilz Insurance building. From Milburn’s perspective, Northern Kentucky’s historic neighborhoods and buildings attract tourists and residents seeking relocation.
“It’s something you can’t recreate,” Milburn said. “I mean, if you think of all of the travels that people do, people go to cities like Savannah and Charleston. They don’t go out to the mall of Savannah or Charleston; they go to the old downtown. Why wouldn’t we want that here? And why wouldn’t we want people to live in buildings like that and enjoy neighborhoods like that?”
Part of urban fabric
Adaptive reuse projects often take dilapidated or vacant warehouses, factories or office buildings and convert them to lofts, condominiums or apartments. Downtown Covington, for example, boasts several of these projects, including the Boone Block Lofts, the Covington Mutual Building and Bradford On Scott.
Tom West, Covington’s economic development director, told LINK nky in February that the city’s goal is to encourage the adaptation of buildings that can stand the test of time.
“It is important when a city has infill sites that we find developers who understand the market and how to build something that can be adaptable and relevant through multiple decades,” West said. “That is a characteristic that the builders of our best 19th-century structures understood, which is why so many of those buildings continue to find new uses over a very long life cycle.”
Adaptive reuse initiatives generate numerous housing units in underserved regions. This approach is not only sustainable, as it gives existing structures new purpose without new development, but it is also especially beneficial in densely populated urban environments where space is scarce. Additionally, these units typically provide convenient access to public transportation, enhancing the walkability of communities.
Attracting new residents and integrating their homes into a city’s urban fabric can enhance foot traffic to local businesses. Restaurants, cafes, retail shops and service providers frequently experience increased patronage when new housing emerges close by.
One of the most prominent examples of residential adaptive reuse in Covington is the Boone Block Lofts, which turned a 19th-century commercial building into modern living spaces. The project preserved the historic facade and interior details while incorporating contemporary amenities for residents.
Private and public investment
A mix of public and private investment has spearheaded Covington’s revitalization. Developers have leaned on tax incentives, historic preservation programs and grants to encourage adaptive reuse.
Nonprofit organizations like the Catalytic Fund were created to drive economic development in Northern Kentucky by providing financial assistance and support for urban revitalization projects. The organization aims to stimulate private investment in the region’s river cities, including Covington, Newport, Dayton, Ludlow and Bellevue.
The Kentucky Heritage Council, a state organization, provides rehabilitation tax credits for developers. Properties that generate income can qualify for a 30% tax credit on rehabilitation costs up to $10 million, resulting in credits of up to $3 million. The same 30% credit is available for owner-occupied residences, with a maximum credit of $36,000 on $120,000 in qualified expenses.
SparkHaus is using a $2 million rehabilitation tax credit to help finance its new home. The previously vacant Simms Furniture building, at 727 Madison Ave. in Covington, is being transformed into a regional entrepreneurship hub. The development will bring together Northern Kentucky-based startups, investment firms and entrepreneurial support organizations in one centrally located site.
Haehnle, who is behind projects such as the DBL Law headquarters and the Ice House renovation, is a proponent of making the tax credit, both at a state and federal level, permanent.
“The one thing we sell in that city [Covington] is the history and the coolness,” Haehnle said. “That’s where everybody’s headed. It’s just got to be easier. They need to make those state historic tax credits a permanent function, and the federal tax credits.”
To qualify for a tax credit, a building must be listed on the National Register of Historic Places. SparkHaus’ future home is within the Covington Downtown Commercial Historic District, which is included in the registry. The building, built in 1929, was a Montgomery Ward department store until the early 1970s.
Economic catalysts
In addition to converting commercial properties into residential ones, deteriorating and historic structures are increasingly being adapted for modern purposes. The Kenton County Government Center, which houses all county government functions, was established in the former headquarters of the Bavarian Brewing Co. at 1811 Simon Kenton Way in Covington. Instead of demolishing this building, Kenton County opted for its preservation, enabling a $32 million investment to transform it into a contemporary government facility.
Similarly, the historic Coppin’s Department store, at 638 Madison Ave., was reinvented as Hotel Covington – rated as the top hotel in the state in 2022. Opened in 2016, the hotel has helped revitalize downtown Covington, demonstrating that adaptive reuse can catalyze economic growth and urban renewal.
On a neighborhood-sized scale, the 23-acre IRS redevelopment in Covington seeks to revitalize underused land through residential and mixed-use development. The master plan includes creating a pedestrian-friendly street grid, green areas and public facilities. The project also is anticipated to introduce hundreds of new housing units, office spaces for businesses and retail stores.
On the east side of the Licking River, Newport has embraced adaptive reuse to revitalize its historic districts. A notable instance is the East Row neighborhood, renowned for its renovated 19th-century homes. Additionally, projects like the Watertower Square redevelopment have turned former industrial sites into vibrant commercial buildings.
A nationwide trend
These projects reflect a broader trend in urban development, in which cities across the country are repurposing aging structures to meet modern needs. Nationwide, commercial-to-residential conversions have gained momentum, particularly as remote work trends shift office demand.
A report from the National Association of Realtors shows a notable increase in converting vacant offices to residential spaces in recent years. This trend is especially prominent in major metropolitan areas such as New York City, San Francisco and Chicago. These cities have adopted adaptive reuse strategies to address housing shortages and rejuvenate their central business districts.
The shift toward adaptive reuse reflects an increasing focus on sustainable urban development. By giving existing buildings new purpose, adaptive reuse cuts down on construction waste, lowers carbon emissions and conserves architectural heritage. Additionally, this approach often proves to be more economical than new construction.
Despite its benefits, adaptive reuse is not without challenges. Renovating historic buildings often comes with regulatory hurdles. Developers, for example, must comply with preservation guidelines, zoning laws and modern building codes. Additionally, older buildings may require extensive structural updates to meet contemporary safety and energy efficiency standards.
Financing adaptive reuse projects can be complex, as banks and investors may perceive greater risks compared to traditional new construction projects. However, tax credits and government incentives, such as historic preservation grants and low-interest loans, have helped bridge funding gaps.
One critique Milburn has of adaptive reuse projects is that regulations can sometimes be overly stringent. That can discourage developers from taking on new projects.
“They can make things a lot more difficult than they need to be to redo old buildings,” Milburn said. “No one wants to do anything that’s unsafe or put anyone into any kind of danger, but, to try and repurpose a lot of these buildings, there needs to be, in my opinion, a little bit more flexibility in the building codes.”
Part of wider strategy
Although adaptive reuse can help address the regional housing shortage, it is not a complete solution. It should be implemented alongside other housing strategies, including the construction of income-aligned housing, public housing and zoning reforms.
In addition, some historic buildings and commercial buildings aren’t suitable for adaptive reuse, according to Suzanne Lanyi Charles, city and regional planning professor at Cornell University.
“There’s currently a lot of talk about converting office buildings to residential as a solution to our housing crisis,” Charles said in an interview with the Cornell S.C. Johnson College of Business. “In a nutshell, some office buildings are great for that, and some are not.”
Looking ahead, the future of adaptive reuse in Northern Kentucky appears promising. As demand for urban housing continues to grow, developers and city officials recognize the potential of historic buildings as a key asset in economic development.
The region’s approach to adaptive reuse serves as a model for balancing growth with historic preservation. By maintaining its architectural heritage while adapting to modern housing needs, Northern Kentucky is demonstrating how cities can evolve without losing their identity.
“If you come to Covington and you see the old housing stock and the old building stock, what’s our attraction there? That’s it,” Haehnle said, “saving that stuff and making it look cool. And when you’re doing something new to try to make it fit in and work with the neighborhood, that’s really hard. But if it’s done right, it works.”
As more adaptive reuse projects take shape, Northern Kentucky can benefit from increased housing options, economic revitalization and a stronger sense of community. With careful planning and investment, the transformation of historic buildings will continue to shape the region’s urban landscape for years.