In a 7-0 vote today, City Council’s Budget and Finance Committee approved development plans for Fourth and Race streets to build a downtown grocery store, 300 luxury apartments and a parking garage to replace Pogue’s Garage.
Following the city’s $8.5 million purchase of the property, the project will cost $80 million. The city will provide $12 million through a five-year forgivable loan, and the rest — $68 million — will come from private financing.
The committee hearing largely focused on the downtown grocery store, which Odis Jones, the city’s economic development director, called the “next step” of the city’s overall plans to invigorate residential space and drive down office vacancy downtown.
the city’s plans to semi-privatize its parking assets.
The grocery store will be 15,000 square feet — slightly smaller than the Kroger store on Vine Street, which is about 17,000 square feet — and open daily from 7 a.m. to 10 p.m. It will be run by an independent operator, which is so far unnamed.
Flaherty and Collins CEO David Flaherty acknowledged it’s “a compact space,” but he said it will be enough space for a “full-service grocery store” with all the essentials, including fresh produce.
The grocery store will be at the base of a new, 30-story residential tower, which will include 300 luxury apartments and a pool.
Across the street, the city will replace Pogue’s Garage, which city officials have long called an “eyesore,” with a new garage.
The seven Democrats on City Council voted in favor of the plan, with Independent Councilman Chris Smitherman and Republican Councilman Charlie Winburn abstaining.
Democratic Councilman P.G. Sittenfeld questioned the funding sources for the project. City officials explained the $12 million loan will come through urban renewal bonds, which were previously set aside in an urban revival plan that encompasses all of downtown.
Jones said the money was going to a hotel-convention center deal when the city originally pitched the parking plan, but that deal has since collapsed.
City officials also noted the urban renewal fund, which is generated through downtown taxes, can only be used on capital improvement projects that support development and redevelopment downtown. Although the fund could be modified by City Council, it could never go to operating budget expenses such as police and fire.
Public dollars will go to the public garage, while private funds will carry the rest of the project.
The city’s $12 million investment comes through a five-year forgivable loan, which means the city will get its money back if parts of the project, including the privately funded grocery store, fail to meet standards within five years. After the five years are over, the loan is forgiven and any failure would result in a total loss on the investment.
Smitherman, who opposed the city’s parking plan, criticized the city administration for not presenting the current funding plan as an alternative to the parking plan: “What I’d like as a public policymaker is to see all of the options in front of me so that I can choose not just one option but maybe three options.”
Sittenfeld also questioned Flaherty about two previous projects Flaherty and Collins undertook that went bankrupt. Flaherty said the bankruptcies were mostly related to the economic downturn of 2008, but admitted the bankruptcies forced the company to make changes.
The city estimates the project will produce 650 construction jobs and 35 permanent, full-time jobs.
For the city, the project is part of a much bigger plan that includes getting 3,000-5,000 new residential units built downtown in the next five years to meet rising demand.
“It’s hot to be downtown right now,” Jones said.
Jones explained the property would have cost Cincinnati millions of dollars regardless of the city’s buyout and development plans because of a liability agreement the city made in the 1980s.
“When you start from there and you gradually come up and look holistically at the project, taking action was not only necessary, it was prudent,” he said.