Developer wants to buy a Lexington block for student housing. Neighborhood pushes back

A St. Louis-based developer is trying to buy a downtown Lexington block to build a large private student housing complex.

The developer, Subtext, which has built private student housing in multiple states including Indiana and Ohio, sent letters to property owners in the 500 block of South Upper Street offering to purchase their properties, according to emails and documents provided to the Lexington Herald-Leader.

The block includes the former Mellow Mushroom restaurant and is across the street from the Hub, another private student housing complex that also includes a Target. Subtext representatives are trying to move quickly to acquire the property, according to emails sent to residents in the area.

The block is between South Upper, Lawrence, Pine and Cedar streets.

“We have had conversations with most of the landowners on the block and have agreed to terms with a larger owner and are getting very close to agreeing to terms with multiple others. Our goal is to pursue a development of the full block and would gladly welcome the opportunity for your property to be a part of it,” according to an email sent by Tanner Lawrence, a representative of Subtext, to a landowner in the area on March 20.

Lawrence and other representatives of Subtext did not respond to emails and phone calls seeking comment.

Some members of the Historic South Hill Neighborhood are trying to stop the development before the developer acquires all the property. They are encouraging others not to sell to the company.

Fayette County Property Value Administrator records show no purchases have gone through so far.

According to emails from Lawrence, the property transactions would not close until the spring or summer of 2025 if all the landowners agreed to sell.

Lexington sees influx of private, student housing developers

“We already have the Hub,” said Marc Mathews, president of the neighborhood association. The neighborhood, one of the first in the city to be designated as a historic preservation district, is worried private, large student apartment complexes will dominate the neighborhood. The 500 block of South Upper Street is just outside the historic overlay district.

Subtext is one of a growing number of companies that have entered the private student housing market over the past few decades. Besides the Hub, which has a second complex on Virginia Avenue and South Limestone, the city also recently approved a six-story student apartment on East Maxwell Street.

Neighbors of the East Maxwell Street development tried to fight it, arguing it was too tall and had too many apartments for a neighborhood largely dominated by two and three-story buildings. Ultimately, a zone change for the property was approved in December 2023.

An overhaul of the city’s zoning ordinance, called the Urban Growth Management zoning text amendment, makes it easier for different types of housing to be built in different areas. It also creates a new zone called a corridor node that would allow large, apartment complexes along major corridors. That ordinance will likely be approved Thursday.

That’s why Mathews and others in South Hill are trying to stop the development before it gets to city planners.

“We know there is a chance the development will be approved,” Mathews said.

At least two neighbors in the 500 block have so far rebuffed offers from Subtext to sell, according to emails provided to the Herald-Leader. There are a little more than a dozen properties in that block.

But Subtext is upping the pressure on property owners. One owner told Mathews in an email that Subtext representatives have showed up at her place of business and even sent emails to her tenants. The owner said she eventually told the developer it was harassment and told them to stop.

Mathews and others in the neighborhood said they don’t have a problem with density — they aren’t opposed to accessory dwelling units, or smaller units such as granny flats. They don’t want South Hill and all downtown neighborhoods to turn into private, multi-story apartment complexes, though.

That’s not a neighborhood, Mathews said, who has lived there for five years and is helping to reinvigorate the Historic South Hill Neighborhood Association.

“We don’t want to end up the west campus of the University of Kentucky,” he said.