Dayton Arcade now $5M closer to rebirth
Renovation aims to turn empty buildings into job generators.
Six months after being denied state historic tax credits, the devel
opers of the Dayton Arcade on Wednesday officially earned $5 million in incentives — the exact amount they originally pursued.
The incentives marked a big step for the Arcade, which Dayton Mayor Nan Whaley and others previously advocated for tear
ing down when she first ran for mayor.
But a task force Whaley convened recommended stabilizing and preserving the Arcade — instead of demolition.
Whaley said a redeveloped Arcade will be a community asset with the same type of impact as
the Schuster Center, Fifth Third Field and RiverScape.
“Capitalizing on downtown’s unique architecture, the (city’s) strategy seeks to remake downtown into a thriving, seven-day-a-week urban neighborhood featuring activated storefronts, new housing and work spaces for creative professionals and cutting-edge firms,” Whaley said.
The Arcade project is not a done deal, but many of the most important pieces of financing have been assembled, and officials say the current redevelopment plan is closer to becoming a reality than any that have preceded it, dating back a couple of decades.
The roughly $56 million proposal to rehab the majority of the vacant complex’s eight interconnected buildings into housing, an innovation hub and commercial space was at risk of unravel
ing if state historic preservation tax incentives could not be secured, developers said.
But the Ohio Development Services Agency on Wednesday announced awards of nearly $35 million in preser- vation tax credits to benefit 36 projects across the state,
including a $5 million allocation to the Dayton Arcade. The official announcement was held at the iconic rotunda inside the downtown com- plex, and the Arcade was one of only two projects state-
wide to receive $5 million in incentives.
“This (award) is really important because we’ve had it in our model — our capital stack — since the beginning, and without it, I’m not sure we would have made that up through other funding sources,” said David Williams, vice president of urban development with Miller-Valentine Group, one of the development partners.
More than 120 people crowded into the Arcade’s glass-domed rotunda for an announcement regarding the recipients of the Round 18 state historic preservation tax credits.
Credits were awarded to projects in 13 Ohio communities, including Troy and Urbana. But the Dayton Arcade was among the big- gest winners.
The development team that wants to rehab the Arcade complex narrowly missed a $5 million request for tax credits in December, surpris- ing some officials who feared
the delay could harm the project’s financing and time- line for property acquisition.
The first phase of the arcade project, estimated to cost more than $56 mil
lion, targets the Commer- cial, Fourth Street, Ludlow, rotunda and Lindsey buildings.
The plan for all the Arcade structures south of an alley that cuts through the middle of the block will cost about $80 million and will include
the Kuhns and McCrory build- ings, developers said.
The Arcade already has secured $20 million in low-in- come housing tax credits, $20 million in new market tax credits and should get nearly $10 million in federal historic tax credits. Develop- ers, however, continue to work on obtaining or finaliz- ing assistance from JobsOhio, the Dayton Business Commit- tee and other sources.
Bill Struever, principal of the other main development
partner, Cross Street Partners, said they are very close to securing all the needed financing for the first phase — so close they hoped to make an announcement about it at Wednesday’s press confer-
ence. “There’s a couple of things we’re trying to button down, but we’re very close,” Struever said.
Developers would like to start construction on the arcade by the end of the year, with the first spaces opening up likely by late 2018, early 2019.
The first phase would con- vert the Ludlow Street office building and the Fourth Street apartment building into 72
apartments, with commer- cial tenants in the street-level spaces.
Two high-rises, the Commercial and the Lindsey buildings, also will be turned into 54 apartments. The Commercial building is at the
corner of South Ludlow and Fourth Street, while the Lind- sey building sits along South Main Street.
Most of the apartments will be affordable housing, geared toward artists and creative types. But about two dozen units will be market-rate.
As well as housing, the Arcade possibly will be
home to 150 businesses — most very small — and hundreds of workers.
The main anchor tenants would be the University of Dayton and The Entrepreneurs Center, which have agreed to occupy about 80,000 square feet of space in the rotunda building if redevelopment plans move forward.
They want to create an “innovation hub” where students, faculty, start-ups, businesses and representatives from arts, research, academia and other groups interact and collaborate. Sinclair Community College also is interested in playing a role in the Arcade. Some potential tenants
include a second location for Warped Wing Brewery, a Boston Stoker Coffee Co. shop, the Dayton Visual Arts Center, a kitchen incubator, a collection of pop-up restaurants and a deli and grocer called Feelohs. Feelohs is the brainchild of Haitham Iman, the owner and chef at Carmen’s Deli and Bistro in the Kettering Tower.
Salon J Ladner & Spa in the ground floor of the St. Clair Lofts also has expressed interest in being a tenant.
The Arcade has about 420,000 square feet of space. The complex’s redevelop
ment would be catalytic and would spark new investment in the surrounding sections of downtown, realistically creating roughly 10,000 new jobs, possibly within five to 10 years, Struever said. “If you starting getting den
sity in these office buildings again, it’s a lot of new jobs,” he said.
Miller-Valentine and Cross Street Partners plan to seek additional state historic tax credits in the fall to help fund a second phase of the project, which will likely focus on the McCrory, Kuhns and Gibbons annex and Third Street arcade buildings.
Struever’s nephew is Joe Lanni, co-founder of the Thunderdome Restaurant Group, which owns trendy restaurants in Cincinnati and other Ohio cities, including Bakersfield, The Eagle, Kruegers, SoHi Grilled Sand
wiches, Currito and Maplewood Kitchen and Bar.
Lanni’s father’s business, the Great Steak and Potato Company, started in the Dayton Arcade in the early 1980s.
Struever said Lanni would consider bringing some restaurant ideas to the Arcade if other quality businesses and restaurants occupy nearby space. “He said ‘If you give me 12 good businesses, like in Over-the-Rhine, I’ll come, but I’m not coming by myself,’” Struever said.
Lanni told this newspaper that he has toured the Arcade. “It sounds like a really cool project, and if anyone can pull it off, it’s Bill Struever,” Lanni said.