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EXCLUSIVE: Biggest Development Yet for Downtown Covington Takes First Step

What may be the biggest development yet for Downtown Covington's renaissance is now in motion.

On Thursday, the Covington City Commission approved a land swap, trading its parking lot at Third & Greenup Streets for one owned by Champ Realty at Seventh & Washington Streets.

Champ Realty is affiliated with Corporex and Chairman Bill Butler is listed as director on the Kentucky Secretary of State website.

In addition to approving the land swap, the city commission also gave its blessing to a master development agreement with 730 Washington, LLC. That entity is not clearly identified but The River City News has learned that the LLC is likely affiliated with NorthPointe Group, the Cincinnati-based developer behind some of the Queen City's highest profile urban residential and mixed use projects. Among them: Mercer Commons, Seven at Broadway, and several other residential projects in Over-the-Rhine.

Reached by phone on Friday, NorthPointe partner Rick Kimbler confirmed that his group has been looking at Covington for the past few years. 

"We're exploring some development opportunities in Covington," Kimbler said, saying that it would be premature to announce anything specific. He noted the city's positive developments announced over the past couple years. "There appears to be some good momentum over there."

City Manager Larry Klein also would not identify NorthPointe as the owners of 730 Washington, LLC, but did say the proposed development would be mixed use. 

"We swapped those lots and this is in anticipation of an economic development project and the Washington Street lot that would be part of it," Klein said Friday. The city commission offered its approval during a special meeting on Thursday that followed an executive session. "Right now, that's about all I can tell you."

The lot at 7th & Washington Streets has long been the topic of speculation for possible developments and has been linked to such hopeful ideas as an apartment building or the Chase College of Law. "It's not Chase," Klein said. "I can say that it's a mixed use development."

City Hall, currently renting a space on Pike Street, will also need to find a permanent home. "The city is looking for permanent quarters in the future, but there's been nothing discussed at all in this project about that," Klein said.

The Catalytic Fund and its leader Jeanne Schroer were involved in crafting and explaining the proposal to the city commission. "I really am not going to say a lot about it other than we are working on a potential project there involving that lot at Pike and Washington," Schroer said. "The project is in a stage I call due diligence stage where we are investigating what may be good uses for the site."

Schroer said that she is not involved in a development plan for the lot that Corporex now has in its possession at Third & Greenup. "This is something that will be studied, too, along the way," she said.

A call to Corporex has not yet been returned in regards to what may be planned for the lot previously owned by the city. The lot is located near several Corporex developments like the Ascent and the RiverCenter towers.

One person close to the deal at 7th & Washington Streets said that the deal is being referred to as the "Duveneck Project", named for 19th century Covington artist Frank Duveneck who is the subject of a statue and seating area nearby on Pike & Washington Streets.

The development will also encroach upon property currently owned by Steffen's Rental. Owner Arden Steffen said that she was approached in the late winter and early spring of 2013 about the possibility of selling some of their properties. A deal was put together for Steffen to sell some of the property to NorthPointe.

"So many pieces had to come together to get us to this point," Steffen told The River City News.
 
Arden entertained the idea of selling off Steffen's properties in Covington in their entirety. "Is this something I can take on having just finished my Master's degree and starting a full-time job at Children's (Hospital)?" She ultimately decided to retain the three main buildings but to sell everything else. Steffen only recently took over the company from her father.
 
"This was my father's pride and joy. Selling off a large piece of it was not easy for me." Negotiations took over a year. She decided to agree to the terms in May.
 
Steffen is also unsure of what the nearby development entails, though she had at one point requested that that be included in her contract. Before the deal is final, tax abatements will likely be required for the developer, she speculated.
 
As for the Steffen's properties involved, those parcels would be its east side lot, its rear lot, two buildings between the main building and the shelter, and the large former distillery/warehouse on the Eighth Street side. 
 
The whole project could be as much as two years away and will likely include, according to sources, more than 100 living spaces, tens of thousands of square feet of retail and office space, and more amenities to make the area more attractive. Properties on Washington Street across from the main lot are also expected to be involved, including the Be Concerned property, which is social services agency heavily supported by Bill Butler.
 
"Ten years ago, five years ago, even three years ago, this never would have been on the table," Steffen said. "In the end, (the decision to sell) will be more profitable for the business."
 
"I would never be able to modernize the buildings to get us to the point we need to be without this deal."
 
The transformative deal would be the highest profile and probably the most expensive new development in Downtown Covington's renaissance and would be in the center of some of the other big developments such as The Hotel Covington, Braxton Brewery, the Mutual Building, UpTech, the Market Lofts, and Pike Star.
 
The River City News will continue to follow and will have more as soon as we learn it.
 
Written by Michael Monks (editor & publisher) & Jerod Theobald (managing editor)
 
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