A vacant furniture store located in the heart of Covington’s downtown business district could see new life as an incubation hub, and at least two local startup backers, including one of the region’s fastest-growing venture capital firms, are among its prospective tenants, according to a newly released development plan.
The Sims Furniture building, which has sat empty since the retailer closed the location in April 2022, could be renovated to attract and scale tech companies in the region, said Chad Summe, managing partner of EGateway Capital, a local investment and advisory firm that specializes in digital commerce.
EGateway plans to relocate its operations – as well as some of its portfolio companies – to the building, located at 727 Madison Ave. Blue North, a Northern Kentucky-focused entrepreneurship support group, is also expected to occupy the space.
Both are already headquartered in Covington nearby.
The effort took its first step forward May 9 when the Kenton County Fiscal Court approved using a pool of its site development funds – an amount not to exceed $3 million – to purchase the property through the Northern Kentucky Port Authority.
The two-story building, considered historically and architecturally significant, will house rapid-growth companies with flexible lease terms. According to the development plan, there’s “no office space in downtown Covington” that offers such an amenity.
Of its roughly 47,000 square feet, 39,000 can be used to accommodate rent-paying office users.
Summe said the idea is for the space to serve as the first landing spot for small companies – between 10 to 20 employees. As they grow, they’d be pushed out to their own permanent spaces in the region.
The building itself could accommodate more than 100 jobs, but with Blue North’s services, that number could “catalyze” by multiples, the plan said.
Dave Knox, executive director for Blue North, declined to comment since the project is still in its earliest stages. Blue North, which offers services and programming for founders, recently established an entrepreneurship fund to award grants to Northern Kentucky-based companies.
For EGateway, the incubation hub is part of its larger vision, Summe said, which includes shining a brighter spotlight on the region’s massive opportunity as a transportation hub.
The firm invests in post-seed or early-stage companies solely in the e-commerce space and has backed the likes of Hamilton's 80 Acres Farms and Los Angeles-based Flowspace, which bills itself as the Uber of short-haul trucking.
Before its launch in early 2021, Summe served as chief strategy officer at Quotient Technologies, and he believes his previous employer’s growth in the region can be replicated.
Quotient, now based in Salt Lake City, ballooned its local headcount from 10 to 100 “very quickly,” he said, at one point, ranking as the company’s largest office globally.
EGateway will serve as a “catalyst tenant” for other companies looking to similarly scale.
“There’s not anything else like this in the region – or other regions, really – where there will be this concerted effort to bring different continuums of capital together,” Summe said. “It’s been a vision of ours, and our hope is that it moves forward with rigor.”
A timeline for redevelopment is unclear. The Kenton County Fiscal Court last week also approved an appraisal contract, which will used to determine the purchase price.
The property, owned by developer Tony Milburn of Milburn Group, is currently listed through Cushman & Wakefield for $2.75 million.
The rehab is expected to run $9 million to $10 million. The building requires extensive exterior repair, including new windows, the document said.
According to the development plan, primary financing could come from the Catalytic Fund, a group that deploys capital to support real estate development projects in Northern Kentucky.
The building also qualifies for up to $2.5 million in state and federal historic tax credits and other grants.
Ultimately, the renovation will “visually impact the Madison Avenue corridor,” while “removing blight and preserving a historic asset,” the document said.
Sims Furniture closed at the end of April 2022, with plans to relocate to Smith Road in Norwood. The furniture company had operated at the Covington location since the 1970s.
