Hyden, KY
Hyden, KY was thrilled in 2019 as the S&T Hardware Building, the last unoccupied commercial space in its historic downtown, appeared poised to receive $200K from the Appalachian Impact Fund (AIF) to jumpstart its renovation. As it turned out, those ARC-sourced funds could not be applied to a privately owned building. Hyden pivoted in mid-2021, however, to focus on renovating a different historic property, Mary Breckinridge’s Wendover, whose ownership had been recently donated to a local non-profit. In doing so, Hyden become eligible to apply a portion of the $200K in the ARC’s original investment and thereby score a gratifying win for the community.
Stage of Investment: Planning
Population: 398 (2019)
Date Started: 2017
Estimated Completion: TBD
Key Players
Spotter: Hyden Citizens Bank Framer: Hyden Citizens Bank
Developers: Hyden Citizens Bank; Leslie County Betterment (post-pivot)
Project Manager: Joel Brashear (pre-pivot); Wendover Preservation Council (post-pivot)
Community Engager: Local Downtown Stakeholder Team (2017-2021/pre-pivot); Leslie County Betterment (2021/post-pivot)
Investors: Appalachian Impact Fund (AIF), Appalachian Regional Commission (ARC), Frontier Nursing University (post-pivot)
Technical Assistance: Appalachian Impact Fund (AIF), Community and Economic Development Initiative of Kentucky (CEDIK) at the University of Kentucky, Housing Development Alliance
The Spark
From 2017-2020, Hyden stakeholders, with support from CEDIK at the University of Kentucky, identified their priorities for investing in downtown revitalization: redeveloping the Old Post Office, streetscape improvements, and, to a lesser degree, a mixed-use renovation of the S&T Building. In 2019, a regional ARC POWER grant award greenlighted the S&T project.
The Challenge
After pre-work on the S&T project began, local stakeholders learned ARC funds could not be used for construction costs to renovate the building that Hyden Citizens Bank had acquired in 2013. Without ARC funds providing the initial capital to attract additional investment, the S&T project was suddenly in jeopardy. Overall costs to gut and renovate the three-story structure for commercial tenants, affordable apartments, and a community space would be at least $2M. Its floodplain location would inflate insurance costs. Hoping to meet the ARC’s eligibility requirements, the Bank sought but was unable to find a local nonprofit to which it could donate the S&T building.
“Mary Breckinridge’s Wendover is a huge opportunity that we’d be crazy not to go after as much as we can.”
The Investment
The speed and grace with which Hyden has been able to pivot from the S&T Building to Mary Breckinridge’s Wendover - the alternate project - is clearly not a happenstance outcome. A lot of patient community based collaborative work and investment over several years laid the groundwork for what has so far been a seamless transition.
From 2017 to 2020, CEDIK provided local stakeholders with a mix of leadership development, networking opportunities, educational programs, technical assistance, and incentive grants. A local leadership team guided these activities and brought together the City, the Chamber of Commerce, the Community Foundation, and other stakeholders to set project priorities and prospects for investment.
Intriguingly, AIF’s and CEDIK’s partnership to submit an ARC POWER grant proposal emerged in part from early discussions about Hyden’s redevelopment plans for the S&T Building. This partnership was awarded $1.5M in ARC POWER funding in 2019 and is now known as the ReVitalize, ReInvest, ReDevelop (R3) Initiative.
By mid-summer 2021, however, an alternate investment focus had arisen - Mary Breckinridge’s Wendover, located about 4 miles outside of Hyden. Built in 1925, the property celebrates the legacy of the Frontier Nursing School that Breckenridge established in Hyden to serve the people of rural Kentucky. Leslie County Betterment, a local nonprofit, has accepted the offer of Frontier Nursing University to turn over ownership of Wendover to its stewardship, thereby assuring the facility will now be open to the entire community. The total donation of Wendover’s buildings and grounds is valued at just under $2 million.
Wendover did not receive, however, all $200K of the funding that had been set aside for the S&T Building. “We actually got a $65,000 impact loan at 1% interest with 12 months deferred,” said Joel Brashear, Community Outreach and Business Development Officer, Hyden Citizens Bank. This was more inline with what R3 was wanting to do, he added, especially as the property is now owned by a non-profit organization.
Leslie County Betterment’s first major task, then, has been to create the Wendover Preservation Council, a committee of local leaders who will guide Wendover on its new course. It’s likely this group also will serve as a replacement for the original local leadership team that guided CEDIK’s three-year downtown revitalization initiative.
The Return on Investment:
Downtown stakeholders in Hyden view local acquisition of Wendover and the repurposing of a portion of the original R3 investment as an opportunity to reap a positive financial return at the property, stimulate local businesses associated with outdoor recreation and cultural heritage tourism, and bring the community together again. Following upon the disappointment felt by many local residents when Frontier Nursing University moved to Versailles, this feels like an authentic win for the community.
What’s Next?
Hyden Citizens Bank has explored the option of donating the S&T building to a non-profit, but as yet the bank has not gone so far as to approach local charities about taking control of the property. Following internal discussions, the bank has decided it is in the best interest of the community to hold onto the property and see what it might accomplish moving forward.
As for renovating the Wendover facility, Joel Brashear has said the project was and still is in need of startup capital. “The R3 funding allows Wendover the funding we need to operate in 2022,” he noted, adding the Wendover Preservation Council will now seek a more permanent source of funding through ARC and other avenues.
In any event, the R3 investment pivot has successfully connected Mary Breckinridge’s Wendover to a set of revitalization priorities for Hyden’s historic downtown that were set a few years ago during CEDIK’s facilitated gatherings of community stakeholders. Those planning sessions clearly articulated the community’s clear intention “to connect and expand upon cultural landmarks downtown and countywide.”
In fact, a bronze sculpture of Mary Breckinridge mounted upon a horse is on display at the downtown hospital. Named in her honor, the statue is a favorite with locals and visitors alike, as it evokes how closely intertwined Breckenridge—and her beloved Wendover—are with the town’s history and cultural heritage.
Key Takeaways
Pivot when needed. Don’t be afraid to pivot and try new things in early stages of development. While the R3 Initiative had seemed like a good fit for the S&T Building, it was more pragmatic to shift the local focus to renovating Mary Breckinridge’s Wendover, which also showcases Hyden and Leslie County’s rich history and cultural heritage.
It’s okay to take a break and reimagine. When one development option closes, consider how other uses may be more doable. Much has been learned about renovating the S&T Building. That knowledge may yet lead to a redevelopment strategy that’s a good fit for the community
Key Investments in the Capital Stack
Total: $2.2K
Equity: None
Senior Debt: None
Subordinated debt: $65K
$65,000 impact loan at 1% interest with 12 months deferred from Appalachian Impact Fund’s ReVitalize, ReInvest, ReDevelop (R3) Initiative.
Credit Enhancements: None
Grant or Subsidy: $2.15M
$47K Grant + Community Donations
$2.1M property donation to community nonprofit