ONE-ON-ONE
- July 2000
by Ed G. Lane
"With
the Possible Exception of my Clothes, our Family is a Very Conservative
Group"
Anita Madden discusses the family’s real estate development,
growth in Central Kentucky and the durability of the Thoroughbred industry
HAMBURG
Place was originally purchased by John E. Madden, Preston Madden’s
grandfather, in 1898. In 1956 (one year after their marriage), Anita
and Preston Madden assumed the day-to-day farm operations and started
raising horses there.
They
had early success by the ownership of T.V. Lark, who was the country’s
leading grass horse in 1961. Standing at stud at Hamburg Place, T.V.
Lark became this country’s leading thoroughbred stallion in 1974
under the management of Preston Madden.
John
E. Madden had six winners of the Kentucky Derby and Preston continued
the family tradition in 1987. Alysheba, bred by Preston Madden, not
only won the Kentucky Derby in 1987, but was Horse of the Year in 1988.
During
the time of this successful thoroughbred racing and breeding, Anita
Madden planned the Hamburg Place Derby Parties and other thoroughbred
business related social activities. Anita Madden was also a Kentucky
State Racing Commissioner as well as taking her time with numerous central
Kentucky community boards. She also served as a Fayette County Planning
and Zoning Commissioner for a period of 17 years. During this time,
she studied the intricacies of formulating the plan for the development
of the horse farm, Hamburg Place, for its highest and best use to the
community.
The
intersection of I-75/64 and Man O’ War Boulevard cut the 2,000-acre
farm into several land parcels. When the roadways were constructed,
the I-75/64 and Man O’ War Boulevard interchange created an ideal
location for commercial and residential development. In the late ‘80s
and early ‘90s, Hamburg Farm received mixed-use zoning and utility
services from the Lexington/Fayette Urban County Government.
In
1996, Patrick W. Madden (Anita and Preston Madden’s son) returned
to Hamburg Place with a degree in law and experience in trading on the
Chicago Board of Options Exchange. Chronologically, this event was perfectly
timed and Patrick Madden, as the family’s attorney, started into
negotiations with developers and businesses who wanted to acquire interest
in parcels of the 2,000 acres that comprised Hamburg Place.
Family
members who own an interest in Hamburg include: Preston and Anita Madden,
Patrick W. Madden, and the family of the late Patrick E. Madden –
Patricia Madden and her daughters, Winifred Madden and Pem Madden Ausbrook.
On
June 8th, I had the opportunity to talk with Anita Madden about the
Madden family’s real estate development, Hamburg Place, and issues
facing central Kentucky.
How
is the Madden family’s real estate development progressing at Hamburg
Place?
Hamburg Place
is doing great! As you may know, the horse farm was originally purchased
by John E. Madden (Preston’s grandfather). He selected the property
for a number of reasons.
One was the farm’s
proximity to Lexington’s major downtown hotels, which made it
easy for horse buyers to visit Hamburg Place and inspect the thoroughbreds.
Hamburg Place was a great location in 1898 and it’s proving to
be a terrific location in 2000.
How
do you, Preston and your son, Pat, manage and coordinate the day-to-day
efforts required to plan and develop the farm property?
The family joke
is that I’m the idea person, Preston is the detail person and
Pat gets all the credit. Actually, Patrick is the person who’s
responsible for all the business details and decisions, and he’s
the attorney for the family. He keeps everyone involved in what’s
going on. You can’t believe the paperwork that comes past all
of us, and then we have regular meetings with all the family members.
Preston is responsible for running all the rest of the farm and taking
care of all the things he did when he was in the horse business. That’s
no small job.
In
addition to the Madden family’s efforts, Thomas Enterprises of
Atlanta and Towne Properties of Cincinnati have respectively worked
on the commercial and residential portions of Hamburg Place. How well
has the family’s relationship with these two developers fared?
Possibly because
Towne Properties is in Cincinnati and geographically closer, we see
and talk to them more often. And because of the scale and variety
of the homes being developed, we have more input into the residential
subdivisions.
Stan Thomas (of
Thomas Enterprises) is an interesting fellow. He is an ex-football
player. He’s very high energy and has developed numerous successful
retail projects around the country. One of the reasons we like Stan
so much is that he does a beautiful job with his landscaping and maintains
his centers really well. He’s been good to do business with,
and we’ve had a very pleasant relationship.
How
many square feet of commercial development at Hamburg Place are now
occupied and open for business?
On the western
side of the junction of Man O’ War Boulevard and I-75, approximately
one million square feet of commercial development at Hamburg Place
are occupied and open for business.
How
soon do you anticipate additional retail development will open?
To the north
of Meijer’s, Hamburg Place has another 300,000 s.f. zoned for
retail and graded with utilities available. To my knowledge this is
the only retail site in Fayette County of this size that is zoned
and immediately available for development. We are expecting something
unusual and special for this area. Also, negotiations are in progress
for upscale "village-type" stores, and it is our hope that
they will be open by next year.
Did
the family sell or lease the property? What was the business strategy
in this regard?
With the possible
exception of my clothes, our family is basically a very conservative
group. Our first deals were for cash so the family has incurred little
or no debt to develop the infrastructure and after that, we have entered
into long-term leases. Leases allow us to retain some of the property,
to be closely involved with Hamburg Place in the future and to earn
long-term income.
What
is the status of the single-family housing developments at Hamburg Place?
Our first
residential development is named "The Shetlands" because
that was the field where we ran our herd of Shetland ponies. Our last
stallion there was a beautiful white pony named Gunpowder and we are
using his likeness on information materials concerning The Shetlands.
Our next
phase is named West Wind. This area was named for Preston and Uncle
Pat’s grandmother’s residence in New York.
What
is the absorption rate of new single-family housing at Hamburg Place?
The Shetlands
has 107 lots with 39 houses built. The first phase of West Wind will
have 133 lots; approximately 90 lots will be available this fall and
the remainder available next spring.
What
are the price ranges for homes at the Shetlands and West Wind subdivisions?
The Shetlands
are priced from $200,000 to $250,000 and West Wind is priced from
$250,000.
I
understand that there are plans to develop a golf course and more exclusive
single-family housing. When do you anticipate that this more upscale
subdivision at Hamburg will be on the market?
The family
has been considering a golf course development for at least 15 years.
At this time we are still considering options. The family hasn’t
made a definite decision about this portion of the residential development
yet.
Of
the 2,000 acres of the Hamburg Farm, how many are under development,
and how many are yet to be developed?
About 400
acres are developed and 1,600 acres are still available.
How
many years do you think it will take to complete development of the
entire property?
Depending
upon the economy, I would guess our grandchildren would finish it.
For
nearly two decades, you served on the Planning and Zoning Commission
for Fayette County. Were you able to draw on this experience in planning
and designing Hamburg Place?
You may be
surprised at some of the things that I found informative during the
17 years I spent at Planning and Zoning. The most interesting was
getting a first-hand view of all the attorneys in town. Friends are
always calling me for a recommendation.
It was also painful
to realize that the majority of the public really does not understand
the planning and zoning process. When these occasions happened, it
was wonderful to have a commission member who was willing to stop
and explain things. Over the years, Hazel Bush, Rose Lucas and Walter
May did a good job connecting with the audience.
Also, during those
17 years I saw many successes and failures of projects that were presented
to us. Often the finished product did not resemble at all the conceptual
drawings that were presented to the Commission. But on the side of
the developer, engineers, architects, consultants and attorneys are
hugely expensive.
What
local firms assisted the family in the design and planning effort?
Lyle Aten
was our land planner from the very beginning of the project. He continued
for many years until the demands were too much for his time. If we
needed advice, Lyle would certainly be the person I’d call. Foster
Ockerman, Sr., has been our attorney and advisor from the beginning.
As
a property owner now on the "other side of the desk" and seeking
zoning approvals and building permits, what recommendations could you
give the Urban County Government about making development more "user
friendly" in Fayette County?
The answer
is easy – one stop zoning. One person should be assigned to a
project. It would be their job to ensure that the process is timely
and accurate. The paperwork passes through too many hands for a speedy
resolution.
I know this would
be a complex change, but other cities have done it.
I would also add
that Lexington’s planning staff works long, hard hours and is
under-appreciated. No matter how late they are up for an evening hearing,
they are back in the office first thing the next morning. The paperwork
is almost overwhelming. The planners deserve to be well-compensated
and the people who are investing large amounts of money in Lexington
deserve swift responses in order to best manage the huge risks involved
in building.
How
has the local economy in Lexington changed over the past 15 years and
have the changes been positive or negative?
Obviously,
the Lexington economy has been booming for the past several years,
but with interest rates rising, the building community must be vigilant
about the next downturn. That is another reason that the Planning
Commission should be speedy and flexible so that builders can react
to changes in the economic climate.
How
would you rate Pam Miller’s performance as mayor and what suggestions
would you give her?
Mayor Miller
has been a longtime friend and I think she is brilliant. No one does
everything to suit you, but her love of Lexington is obvious and I
think that she has tried to resolve a lot of difficult issues. I wouldn’t
have handled the last Comprehensive Plan update in the same manner.
Hiring Mr. Sieman, who was out to get a "consensus" really
didn’t work. I disagreed with him all along about "consensus"
because it was always the same opinionated small group of people who
kept speaking on all the issues. As for Update Plans, the county should
be divided into quarters and in order to speak at a hearing, you must
own property or live in the area being discussed.
What
do you think about the Urban County Council’s plan to spend up
to $100 million over several decades to purchase property development
rights (PDRs) from farmers in Fayette County?
I’ve
always felt that PDRs may work if you are raising soybeans, but with
the Bluegrass, it is too unknown and too risky. If the Urban County
Government and all the people enjoy the free greenspace that farms
provide, it would be best to help the farmers. Farming (as we all
know) is difficult and expensive. I would recommend that the Urban
County Government implement an Agricultural Health Benefit Program.
Most farm workers and their families do not have good health insurance.
If the taxpayers could participate in some way to help farmers provide
health coverage to farm workers, it could make a big difference in
keeping farming viable in Fayette County.
Should
there be a referendum to allow Fayette County taxpayers to vote whether
or not to spend tax dollars on PDRs?
Yes, definitely.
How
would you rate the long-term potential for the equine business in Kentucky?
The equine
business in Kentucky is forever. It will never go away. The crowds
(daily attendance) at the racetracks may drop, but the people who
truly love and appreciate horses will never forsake the business.
Add to them the gambler-handicappers (many say these are two different
types) and there is a large audience out there. Even though the competition
for entertainment dollars is rough now, it is becoming easier to get
your bet down – either at a simulcasting facility or by telephone
in your home.
Since it is so expensive to raise a horse nowadays, it is most likely
that only the highest quality horses will be bred.
What
are your thoughts for the future?
Throughout
the last century, the Madden family has been willing to share the
beauty of Hamburg Place. Ed and Winifred Madden (Preston and Pat E.’s
mother and dad) built the Polo Club for their friends, and the Sunday
polo matches were open to the public. The Iroquois Hunt Club fox-hunted
at Hamburg Place during the gas rationing years. The Girl Scouts camped
on the grounds for years. The farm has been open to tours, the Derby
parties, and thousands of guests from all over the world.
Perhaps that is why it is such a pleasure when so many people tell
(or write) us about how pleased they are with Hamburg Pavilion.
The family is
tremendously pleased with the initial reception to the development
and we are investing a lot of effort into Hamburg Place’s future
successes.
Ed
G. Lane (edlane@lanereport.com)
is chief executive of Lane Consultants Inc. and publisher of The
Lane Report.
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