Even some large American cities aren’t known nationally for any particular thing. Midsize Lexington, Kentucky, is famous for three: bluegrass, bourbon, and basketball. Bluegrass is its glamorous horse industry, where the global elite come to buy or raise thoroughbreds. Basketball is the powerhouse University of Kentucky Wildcats, the most successful team in college basketball history. And bourbon is America’s super-trendy signature spirit, most of it distilled in Kentucky, near Lexington.

Less well known is that the city is also an innovator in urban planning. Lexington implemented a highly successful city-county merger in the 1970s. More notably, Lexington drew America’s first urban-growth boundary in 1958 to protect the horse farms that begin immediately outside the developed area. The planning decisions that Lexington makes in the coming years may profoundly shape the city’s future—in particular, what happens to its signature horse industry.

The site where Lexington would be established got its name in 1775, from the Battles of Lexington and Concord. A settlement quickly grew there; Lexington’s Transylvania University was founded in 1780 as the first college west of the Alleghenies, and the city was chartered by Virginia (of which Kentucky was then part) in 1782. By 1806, poet Josiah Epsy had dubbed the prosperous town the “Athens of the West.” Over time, Lexington developed into a higher-education center. The Bluegrass region—Lexington and its surrounding central Kentucky counties—is now home to 14 colleges and universities. Transylvania, then called Kentucky University, designated as the state’s land-grant university, eventually spun out its land-grant operations as an independent University of Kentucky, with Transylvania renaming itself to avoid confusion. Thus, Lexington became home to Kentucky’s flagship university, and the city’s educational heritage has continued. The Lexington metro area has a college-degree attainment rate of 38.2 percent; in the city itself, 44.8 percent of adults have college degrees. Contrary to popular stereotypes of Kentucky, then, Lexington is a highly educated city, and affluent, to boot—in no small part, today, due to “knowledge economy” industries such as higher education and health care. It’s also the headquarters of printer company Lexmark.

Earlier, of course, industrialization led the way, coming first and most intensely to cities built along navigable waterways. Louisville became Kentucky’s largest city. Lexington, an inland city, grew more slowly and never became a heavy industrial center. It attracted fewer immigrants, and rather than the influx of blacks experienced in northern cities during the Great Migration, the Lexington region actually lost part of its previously substantial black population and became heavily white in the decades after the Civil War.

Lexington’s three major claims to fame have long-standing histories in the region. Bourbon is a local industry. While there’s no law requiring whiskey labeled “bourbon” to be made in Kentucky, most of it is, with distilleries dotting the landscape between Lexington and Louisville. The region sits on a bed of Ordovician limestone, which produces a mineral-rich water supply low in iron, ideal for whiskey-making. Exclusive limited-edition bourbons now command high prices, and Kentucky’s Bourbon Trail is a major tourist draw. Some people claim that bourbon is named after Bourbon County, immediately adjacent to Lexington’s Fayette County in the Bluegrass region, but the actual etymology is obscure. What is certain is that whiskey has been distilled in Kentucky, particularly around Lexington, for a long time.

Bourbon, produced predominantly around Lexington, is considered a signature American drink. (LIU JIE/XINHUA/ALAMY STOCK PHOTO)
Bourbon, produced predominantly around Lexington, is considered a signature American drink. (LIU JIE/XINHUA/ALAMY STOCK PHOTO)

Basketball wasn’t invented until 1891, but by the standards of the sport, Lexington has a long and proud tradition of it. It’s hard to overestimate the passion that Kentuckians feel for University of Kentucky basketball. The insistence of Louisvillians on cheering for their hometown University of Louisville Cardinals is a material factor in the divide between that city and the rest of the state. While Louisville is itself a storied team with several national championships, the Wildcats are the most successful team in the history of college hoops. The list of Wildcat superlatives is lengthy: most all-time wins, highest all-time winning percentage, eight NCAA championships won under five coaches, and the most NBA draft picks. Kentucky’s early success came under legendary coach Adolph Rupp, who brought home four national titles. In the 1970s, the university built Rupp Arena in downtown Lexington, at the time the largest college basketball arena in the country.

Virginia already had a culture of horse-breeding and gambling on races before Kentucky was settled. That culture carried over into the western part of the state that eventually split off to become Kentucky. Horse racing goes back to nearly the very founding of Lexington, with racing meets beginning as early as 1791. The city’s first Jockey Club was founded not long after.

The Bluegrass region turned out to be a superb location for raising horses. Ideal soils, as well as limestone, which provides calcium, are perfect for supplying water and growing feed for horses, strengthening their bones. But other factors, including luck, probably played a more decisive role. In the mid-nineteenth century, a stallion named Lexington achieved fame as a winning racehorse and even more so as a sire of other winners. The Kentucky Derby in Louisville emerged as America’s premier horse race. East Coast states harmed their own local horse industries by limiting gambling in the late nineteenth and early twentieth centuries.

Whatever the reasons, Lexington and surrounds became the home of hundreds of horse farms. Not only are they extremely productive economically in producing champion Thoroughbreds (the name of an actual breed of horse, not just a term referring to excellence or purity of breeding); the farms are stunningly beautiful. The byways around Lexington, with their signature white or black wooden fencing, stone walls, and impeccably designed and maintained buildings, are not just locally but nationally significant as a great American landscape. Roads with stone fencing bring to mind Ireland, perhaps in part because Irish laborers built some of the first such roads.

Lexington’s horse industry today is a global powerhouse. Horse racing is known as the “sport of kings,” and it takes mega-wealth to compete in it. Unsurprisingly, people like Sheikh Mohammed bin Rashid al-Maktoum, ruler of Dubai, own farms there. Others come to Lexington for its Thoroughbred auctions, especially at Keeneland, the world’s largest auction house for Thoroughbreds and also home to an eponymous racetrack. Though Louisville’s Churchill Downs, with its twin spires, is more famous, Keeneland, in an immaculate pastoral setting, is more beautiful. Traditionally, the horse farms were skeptical of visitors; today, they’re increasingly opening themselves up, becoming a bona fide tourist attraction.

The city’s urban-planning innovations have been quieter. City-county mergers are almost always contentious. Lexington’s took place in 1972, and the chairman of the committee drafting a proposed charter for the combined city-county was University of Kentucky political scientist W. E. Lyons, who observed in a subsequent book that conditions were nearly ideal for a merger to succeed in Lexington. Lexington was the only incorporated community in Fayette County, and the merger thus involved only two units of government; there were no suburbs and no townships, as in the Midwest; and the local schools were already consolidated at the county level, following the common pattern of the South. These conditions avoided problems plaguing other communities, where independent suburbs could act as strong forces against mergers and necessitate exemptions to ensure passage.

Race was less of a factor in Lexington than elsewhere, too. In many cases, the merger was proposed as blacks became a sizable enough voting block to assume political control of the city. Merging with largely white suburbs would then dilute black voting share and assure white control. Unsurprisingly, black city voters did not typically favor this. In Lexington, however, the black population share was low. Under Lexington’s Progressive Era city charter, a city commission of five members was elected entirely at-large. Under the proposed merger charter, an expanded city council would be elected by district, enhancing the likelihood of black representation.

Of the postwar consolidation referendums voted on in America prior to Lexington’s, only 13 out of 56 passed, and only four of those in cities greater than 100,000 in population. Lexington, however, had a smooth path. In the end, the merger aroused little organized opposition and passed by a two-to-one margin.

The development of the urban-growth boundary, known locally as the urban-service area, was intertwined with the horse industry. Locals recognized the uniqueness of the horse farms and created America’s first urban-growth boundary in 1958 to protect them.

Such boundaries prohibit or severely restrict land from being developed in an urban or suburban way outside a certain boundary. This can be accomplished through various techniques such as restricting land uses, setting large minimum lot sizes, or prohibiting the provision of infrastructure or urban services to areas outside a defined boundary. In Lexington’s case, the minimum residential lot size outside the urban-service area is currently 40 acres—a value that has grown significantly over the years—and many commercial uses are prohibited.

A city program of purchasing development rights to farms, funded by a mix of federal, state, and local money, has further enhanced the urban-service boundary. Development has been permanently precluded on about 30,000 acres of land, to date, through this program. Thus, Lexington’s horse country remains intact and thriving, despite being directly adjacent to a prosperous, good-size city.

Those on the political left are typically promoters of urban-growth boundaries, with an environmental rationale to prevent sprawl. As Lexington grows, the city faces increasing pressure to expand the urban-service area. Both the city and metro area have gained 9 percent in population since 2010, significantly above the U.S. average growth rate. The area has been adjusted in the past, most recently in 1996. Were the urban-service area an urban-planning tool used simply for the purposes of curbing sprawl, as in other places, then one could make a case that it should be incrementally expanded, proportionally with growth.

Lexington’s urban-service area is fundamentally different in rationale and scope, however: its goal is protection of arguably the area’s most precious civic asset, its horse farms. And it applies only in the outer areas of Fayette County, not beyond its borders, making it more of a greenbelt than an urban-growth boundary. Lexington is unusual in having sharply abrupt transitions from developed to rural areas. High-quality horse farms begin almost immediately beyond the urban-service boundary. Exit the freeway at U.S. 68 and turn toward the city, and you are on Broadway, a major gateway to downtown. Turn in the opposite direction, and you’re on Paris Pike, one of America’s great scenic roads. Many of the other pikes and byways around the region are likewise aesthetically pleasing. The majestic horse farms, many of them de facto aristocratic compounds, are reminiscent of the Old World. They are also big business and the source of Lexington’s global reach. Indeed, the surrounding farms are the core of Lexington’s identity as “Horse Capital of the World.” Horse iconography is as prevalent in Lexington as guitars are in Nashville.

Allowing the city to sprawl into the horse farms poses a double threat to them because of the unique nature of the animals. Horses are easily spooked by noises, and injuries that could be readily treated in people, such as broken bones, are often fatal to equines. Someone shooting off fireworks in a subdivision next to a horse farm on the Fourth of July could threaten the safety of million-dollar animals. So for the horse farms, it’s not just about a farmer deciding to sell out to a developer, but development negatively affecting the operations of surrounding farms.

And the case for expansion is hardly clear-cut. The typical complaint about urban containment is that it raises housing prices by making land artificially scarce. But Lexington’s home prices are not especially high. According to the Demographia Housing Affordability Survey, the ratio of the median home price to the median income in Lexington is only 3.3, just slightly above the target affordability level of 3.0. This modest pressure has been beneficial in some ways. Lexington has not been plagued by the mass abandonment of inner-city housing that characterizes many other cities. Some areas have suffered disinvestment, poverty, and segregation, but boarded-up homes and post-demolition vacant lots are not a major presence.

Perhaps one reason prices have not soared in Lexington is the greenbelt nature of its urban-service boundary. Once you pass into the surrounding counties, that boundary does not apply. Lexington is not just an urban core surrounded by farms. Rather, beyond those farms lies the greater Bluegrass region, which contains numerous high-quality towns, around which development can occur. Those counties do have horse farms, but the prime horse-farming country is mostly in Fayette and Woodford Counties. Driving beyond Fayette County to access land not covered by the urban-service-area boundary adds only about ten minutes of travel time to downtown. In short, it’s easy for development to skip over the currently protected areas. Commuting into Fayette County has increased in recent years, suggesting that the development has migrated beyond the county’s horse farms.

The Kentucky Wildcats, the winningest program in college basketball history (SILAS WALKER/GETTY IMAGES)
The Kentucky Wildcats, the winningest program in college basketball history (SILAS WALKER/GETTY IMAGES)

Growth will challenge Lexington in ways that go beyond limits on building new contiguous sprawl. Lexington’s highway system is similar to others in the South in being a largely hub-and-spoke system, oriented around major arterial “pikes” that radiate from downtown. Some crosstown or circumferential routes exist, such as the New Circle Road beltway, but unlike in midwestern states surveyed on the township system, Lexington has no grid of major arterial streets. This has led to congestion issues in many of the region’s major cities like Atlanta and Nashville, and Lexington is no exception. Nicholasville Road, especially, passing by the University of Kentucky and two major medical centers, gets heavily congested at rush hour, even though it already uses reversible lanes for peak-period travel.

While expansion of many of the pikes within the developed area is physically possible, it doesn’t seem likely. Building new freeways or arterials seems even less so. Should Lexington experience a major growth boom, Nashville-like congestion that’s nearly impossible to fix seems the likely result. Lexington’s leaders may not want the community’s growth rate to accelerate—though it might happen anyway.

While the urban-service area will have to expand at some point, the city should be judicious about when to pull that lever. Instead of simply expanding the boundary, greater Lexington should seek to grow as an overall region. The surrounding counties and their towns should permit additional growth to absorb development, bypassing the protected areas of Fayette County. The city of Lexington should enable more development and redevelopment within the existing urbanized area. Lexington has not seen the kind of urban apartment boom that many other cities have. The urban-service area has significant scope for redevelopment as well as development, which should be supported with an appropriate zoning regimen that allows denser, mixed-use urban construction. This would require a change from the current approach, which has been hostile to apartments and higher-density construction, even near high-demand zones like the university. If political opposition to further urban redevelopment can’t be overcome, the region may be forced to expand the urban-service area or suffer the consequences of rising home prices, which will put Lexington’s opportunity economy out of reach to rural Kentuckians, who might want to move there in search of upward mobility.

More redevelopment raises concerns over the potential effect on low-income populations. However, the dirt-cheap housing that is characteristic of much of the Rust Belt has not provided inclusive prosperity in places like Detroit or Cleveland. The best means of increasing inclusiveness is the upward mobility that comes from expanded job skills and better access to employment. This means a focus on education and, especially, public transit, which can stand improving. Many cities have looked to invest in bus upgrades through network redesigns, rapid-transit routes, and even making transit fare free, since farebox recovery is so low in these cities. The Lextran bus system made some route changes in 2016 but still runs infrequently. Its downtown transit center is dated.

In addition to beefing up transit, the city should also improve the quality of its public realm, particularly its streets. Lexington has many attractive buildings in its urban core, but the gateway streets from the freeway and the airport pass through less attractive older suburbia. The city should improve these gateway streets. Downtown’s key corridors are also one-way, often confusing to navigate because of restrictions on turns. Unfortunately, the state of Kentucky controls most of these streets, which complicates locally initiated changes. The city is making solid improvements, though, such as the Town Branch Trail, which will feature high-quality bike and pedestrian paths through downtown. The project will also include a major new downtown park.

Lexington faces other hurdles besides managing growth. Kentucky has one of America’s biggest pension underfunding problems. The main pension system for state government employees is only 12.9 percent funded. Overall, the state’s Kentucky Retirement System is only 33 percent funded. These anemic figures suggest a fiscal crisis and/or major tax increases in the future—and Kentucky, unlike many other states in the South, is not a low-tax state.

The region’s higher-education sector could face a bumpy road, as well. College enrollment was already projected to decline nationally. The Covid-19 pandemic has hit college finances hard. And like many other markets, higher education has been bifurcating, with an elite set of winners on one side and a much larger group of struggling institutions on the other. While the Bluegrass region boasts well-regarded liberal arts schools like Berea College (ranked 46th nationally by U.S. News) and Centre College (53rd), most of its schools are in the vulnerable middle ranks.

Challenges and all, Lexington’s future looks bright. In a world where “superstar” cities on the coasts get much of the attention, Lexington is a genuine midsize success story. The most important thing it must do to stay on a trajectory of success is to follow the ancient maxim “first, do no harm”—especially to its traditional industries, which still supply much of the city’s luster.

This article is supported by the John S. and James L. Knight Foundation.

Top Photo: In 1958, Lexington drew America’s first urban-growth boundary to protect its iconic horse farms. (BARRY FOWLER/ALAMY STOCK PHOTO)


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