Lexington approves final plans for 2,800 acres slated for new development

A master plan has been finalized detailing the development of 2,800 acres soon to be added to Lexington’s growth boundary after more than a year of discussions and debate.

The Urban County Planning Commission voted Thursday to approve the master plan in Fayette County’s five new expansion areas. It will now go to the Lexington-Fayette Urban County Council. It’s not clear if the council will make changes to the plan.

The council voted in 2023 to add acres to the city’s growth boundary. It’s the first time since 1997 that the city opened land in the rural area for development.

The areas that will be added include areas between Winchester Road and Interstate 64, several areas around Interstate 75 and Athens Boonesboro Road, and an area around Parkers Mill Road and Man O’ War Boulevard.

The designs call for village-like neighborhoods with retail and other amenities in the center of each parcel. Each area also calls for a mixture of housing types such as apartments, duplexes, townhomes and single-family homes. The intent is to create more walkable and inviting neighborhoods.

The master plan estimates that between 17,000 and 26,000 living units could be built on the 2,800 acres if plans are followed. A recent housing study showed Lexington needs at least 22,549 housing units to meet demand.

The village model is not new. It’s a return to how Lexington neighborhoods were once developed, planners have said. For example, Kenwick, near downtown Lexington, has a mix of housing types but also still has retail and restaurants.

To make sure neighborhoods included retail, restaurants and other shopping, the master plan calls for something called “concurrency,” a requirement that retail and living units are built at around the same time. Under the original proposal, if a developer reaches 20% of the proposed housing for an area, it must build at least 4,000 square feet of retail space before continuing to build housing.

But during public hearings on the proposed plan, many developers and home builders raised concerns about the requirement, saying it would stymie development and make it more difficult for developers to build housing.

Planning Commissioner Bruce Nicol said during the Thursday meeting he was concerned about the requirement.

Concurrency will create “a hard stop” on builders’ ability to get financing or bank loans.

Banks don’t like delays in construction, Nicol said.

Commissioner Robin Michler said he thought the requirement was not too onerous. The 4,000 square feet of retail or restaurant space was the size of many restaurants.

But Planning Commission Chairman Larry Forester, who is a banker, said the concurrency requirement could make those construction loans more risky, depending on the bank and the developer. Each bank has different lending rules, Forester said. How much collateral or leverage a developer has also can determine the conditions of those loans.

Sam Castro, of TSW Designs, a consultant overseeing the master plan, said many cities in the southeast, particularly areas around Atlanta, have a concurrency requirement. At what point developers have to build retail or commercial space before continuing to build residential units, varies by city, Castro said Thursday.

Chris Taylor, director of long-term planning, said there’s a reason many cities are moving to a concurrency requirement. If cities want dense, walkable neighborhoods that are less reliant on cars, “You have to have somewhere to walk to.”

The master plan for the 1997 expansion area included several areas that were supposed to have similar designs with both residential and retail buildings, but that didn’t happen, planning commissioners said during Thursday’s meeting.

The commission ultimately agreed Thursday to change the concurrency requirement to require developers to build commercial or retail spaces after 40% of the residential units are built.

It will take decades for the 2,800 acres to be built out, planners have cautioned. There are still hundreds of acres in the city’s 1997 expansion area that have not been developed.

More planning still needs to be done.

Next, the city will spend $750,000 on a study to determine how the costs for that expansion will be paid.

The council recently approved using money from a $20 million surplus to pay for that study. A preliminary estimate showed it would cost around $570 million, with 90% of that cost being paid by developers. The study will determine how developers and the city will pay for those costs.