Insights

Background
Construction on the Old Fayette County, Kentucky courthouse began on September, 1898 and the first trial began in February, 1900. The Richardsonian Romanesque structure originally contained three floors and a rotunda. Native Kentucky limestone was used for the exterior. Framing the top of the Main and Short Street entrances are twelve faces, perhaps depicting jurors, all with different expressions. A copper weathervane in the shape of a horse originally stood atop the cupola. 

During a 1960’s renovation to provide more space for the courts, many interior historic features were removed. The rotunda was sealed off, a fourth floor was added, and the grand marble staircase was removed. The courts stopped using the building in 2001, and the Lexington History Museum later vacated due to lead paint and other issues. The Old Fayette County Courthouse was placed on the National Register of Historic Places in 1983, and today remains the most iconic building in Lexington, Kentucky.

The Lexington Fayette Urban County Government (LFUCG) had a strong desire to repurpose this centrally located building as an interface of culture, tourism and economic development. Their vision was shared and enhanced and ultimately led to fruition by engaging Historic and Development Consultant, Holly Wiedemann of AU Associates. AU Associates’ understanding of the local business environment, combined with deep development experience in historic renovations, provided the basis for a commercially viable plan for redevelopment. 

Redevelopment
The 41,300 square foot Old Fayette County Courthouse wrapped up a $33 million historic renovation in late 2017. The top floor, an event space called Limestone Hall, was the first area to open. VisitLex, Lexington’s Visitor and Convention Bureau, sponsors unique interactive visitor space creating a center for tourism, promoting city and county attractions. Breeders’ Cup, an organization dedicated to the promotion of elite Thoroughbred racing, has moved its corporate office to the building, enhancing Lexington’s identity as the thoroughbred capital of the world. The third floor is home to LexEffect, an event space hosting weddings, meetings and other events in the dramatic rotunda space, which has once again been revealed with the restoration. The flavor of Lexington is represented by well-known local chef, Ouita Michel, through a restaurant called Zim's. The tenants of the Old Fayette County Courthouse represent the unique history and experience found in Lexington.

Project Financing
The key to the redevelopment plan was the use of the Federal Historic Tax Credit as well as Kentucky’s Historic Preservation Tax Credit. Involving these incentives leveraged the City’s investment on a two-to-one basis (every eligible dollar spent on the project results in an approximate 50% tax credit, which is provided as loan funding for the project). In order to utilize these tax credits a for-profit entity, which leases the property and operates the courthouse, was created to partner with Old National Bank. By moving quickly, the Old Fayette County Courthouse was also able to benefit from a state tax credit which no longer exists for new projects. Thanks to these various tax credits, the Historic Courthouse, LLLP was able to renovate the building in such a way as to create use for many generations in the future. Through careful balance, detailed financial projections, and negotiations with tenants, the Historic and Development Consultant and Historic Courthouse, LLLP were also able to create a plan which sustains itself financially.

The ONB Advantage
Obtaining access to the tax credits involved complicated ownership structuring dictated by the Internal Revenue Code. The Historic Courthouse, LLLP, guided by Holly Wiedemann, required a partner who could understand the complicated structure and use the credits. Old National, through its Tax Credit Group, ONB Community Equity, demonstrated its experience with similar community development projects and execution of other complicated ownership structures. Old National delivered a unified package of equity investment, bridge lending and treasury services, providing a single source of financial expertise. The developer and City appreciated the financial package was provided locally through the Old National office located a few blocks from the Old Fayette County Courthouse. The project was placed in service in December of 2017.

Rehabilitation Highlights

Project Budget -$33 Million
Tenants -Breeders' Cup, VisitLex, LexEffect, Zim's, The Thirsty Fox
Commercial Space - 41,300 Sq ft
Sources of Funding 
- 4


Tax Credit & Lending Team

Marty Richardson - Old National
SVP, Capital Markets

John Douglas - Old National 
VP, Corporate Relationship Manager


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