Avalanche of aid could help Kentuckians reinvent mountain economy

Downtown Hazard sits on the North Fork of the Kentucky River. The Perry County seat redoubled its efforts to fix up Main Street when prospective non-coal employers came to town and saw there were no good gathering places for them to take employees or have business meetings. (Photo by Austin Anthony)

CORBIN — Eastern Kentucky is about to get an avalanche of federal and state money to help it transition from its largely disappeared coal economy, but some of its towns are already lifting themselves up and setting examples for the region.

That was the upshot of the 36th annual East Kentucky Leadership Conference in Corbin, where Main Street is pretty much full again and New Orleans-style balconies show that young professionals are migrating there.

“A lot of younger people have wanted to move closer to downtown,” Corbin City Commissioner Allison Moore said during one panel discussion.

Conference attendees also heard about the revitalized downtowns in Hazard and Pineville, and about the hundreds of millions of dollars in federal grants for which governments and nonprofits are already applying.

“There are now more resources than we have seen in our entire careers,” said Peter Hille, chairman of the East Kentucky Leadership Foundation and president of the Mountain Association, a nonprofit community-development lending institution based in Berea. He’s been doing community-development work in the region for more than 30 years.

In addition to federal money, state government now has a program to help provide matching funds that local governments often need to get grants, noted Casey Ellis of the Kentucky Council of Area Development Districts. Originally targeted to coal counties, its outlay of $1.5 million helped generate $12.8 million in grants last year, Ellis said.

After the conference, held April 25 and 26, Hille gave some examples of the funding opportunities for governments, nonprofits and others:

• U.S. Energy Department funds to reduce energy consumption and bring renewable energy to census tracts where coal mines have closed since 1999, as well as adjacent tracts.

• New programs through the Appalachian Regional Commission, most recently one for multi-state collaborative projects funded by the bipartisan infrastructure bill of 2021.

• The U.S. Department of Agriculture’s rural energy program, which covers half of the installed cost for efficiency and renewable energy for rural businesses.

• The U.S. Environmental Protection Agency’s  Greenhouse Gas Reduction Fund, to bring solar energy to homes of low-income people, and money to build the capacity and workforce needed to install the equipment.

• Several other agencies have money for workforce development and infrastructure, including broadband.

Hille also talked about the federal money at the conference’s closing lunch, but also pointed out the efforts by local leaders, often helped with government grants but mainly spurred by local initiative.

“We’ve been seeing our communities come back to life,” he said, “because they are recreating themselves as places where people can live and choose to live.”

That’s essential as communities look for employers to replace coal jobs, said Bailey Richards, downtown coordinator for the City of Hazard. She said the Perry County seat redoubled its efforts to fix up Main Street when prospective non-coal employers came to town and saw there were no good gathering places for them to take employees or have business meetings.

“We realized you have to build a community,” Richards said in one panel discussion. In the last five years, downtown redevelopment has brought 70 new businesses, 62 of which are still open, accounting for more than 250 jobs. Richards noted proudly that Hazard’s population rose 18 percent from 2010 to 2020, while Pikeville, which has the region’s best-known revitalized downtown, grew 12 percent.

In the Bell County seat of Pineville, Mayor Scott Madon looked out the window of his second-floor insurance office a few years ago and saw a public square with 20 percent of its buildings occupied. Now it’s 100 percent full, after a redevelopment plan that will hit its second big phase this summer, Madon said during a panel discussion.

One key was a five-year moratorium on property-tax assessment increases, which required the cooperation of the county government. Madon said the first property to emerge from the moratorium will pay $10,000 in property taxes this year, after generating only $400 a year before it was redeveloped. To help businesses succeed, Southeast Community College helps them work up business plans, and checks with them each quarter to see how they’re doing.

Hille said successes like Pineville’s and Corbin’s usually have “spark plugs” like Andy Salmons, who is both Corbin’s Main street manager and owner of a former drug store converted into a local-food restaurant and bar with apartments above. He did that 12 years ago, when half of downtown buildings were empty.

Skeptics, and there were many, “said nobody’s going to come to a farm-to-table, craft-beer bar in Corbin,” Salmons said. He ran out of money just before it was time to open, and people who wanted to see him succeed rounded up the last thing he needed for the Wrigley Taproom and Eatery: chairs. 

More openings followed, the town went fully “wet,” not just for restaurants, and other towns noticed and followed suit. “Corbin was a game changer in this region,” said Jacob Roan, the city’s parks director.

Some relief coming for housing shortage

Much of the conference focused on the region’s chronic housing shortage, which has been worsened by floods, inflation and high interest rates, which have also raised rents and home prices. But wait. “Help is on the way,” said Pam Johnson of Fahe, formerly the Federation of Appalachian Housing Enterprises.

Using flood-relief money and other funds, and donated land, the state has started seven housing developments in the counties hit hardest by the 2022 flooding. It recently started taking applications for $298 million in federal disaster-recovery money intended for housing and infrastructure to support it.

The application deadline is June 1, said Matt Stephens, general counsel of the state Department for Local Government. The five counties hurt most by the floods – Breathitt, Letcher, Knott, Perry and Pike – will get 80% of the money. The other 20% is allocated to 15 other counties flooded in 2022.

“We’re looking at a summer and fall of housing starts that we have not seen,” Johnson said. “That’s going to give a boost to the communities.”

Eastern Kentucky has a housing shortage partly because it has shortages of three things related to housing: developable land, infrastructure and contractor, said Wendy Smith, a deputy executive director of Kentucky Housing Corp., a state agency.

Smith said rents have climbed so much that landlords who once took federal Section 8 housing vouchers no longer do so, to avoid inspections required by the program, and more than half the people who got vouchers from KHC turn them back in because they can’t find housing in the 210 days the voucher can be used.

She said there is little new “middle housing” such as duplexes and triplexes, on which developers make less money. And while there is money for apartment buildings and rent subsidies, many people in Eastern Kentucky don’t like apartment living.

“It’s because we’re connected to the land,” Corbin Mayor Suzie Rasmus said, unlike “the rest of the nation, that is so transitory.”

This story is the first in the latest series of stories about Appalachian Kentucky from the Institute for Rural Journalism, based at the University of Kentucky. If you have story ideas, contact Director Emeritus Al Cross at al.cross@uky.edu or Jenni Glendenning, the institute’s David Hawpe Fellow in Appalachian Reporting, at jennifer.glendenning@uky.edu. 

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