Cover Story: A Neighborhood or a Node

New Urbanism meets resistance in Oakley

Nov 27, 2002 at 2:06 pm
Doug Trapp

Development continues in the West End.

Forces of change are sweeping through Oakley, the East Side Cincinnati neighborhood of about 12,000 people. On one side, community leaders and advocates of smart growth want more of what Oakley already offers: a public square surrounded by a variety of businesses you can walk to, with apartments on top and traditional tree-lined streets farther out.

"That is the wave of the future," says Susan Doucleff, a member of the Oakley Community Council.

On the other side stands the developer Vandercar Holdings, some members of Cincinnati City Council and to some extent, large industrial businesses in Oakley such as Cincinnati Machine, which is consolidating its operation and selling its Oakley property, about 50 acres. They say the hard, cold reality of today's economy is that you can't always afford dream projects.

"We're filling a need that people want and that city people are clamoring for," says Rob Smyjunas, president of Vandercar Holdings. "People are not going to Hyde Park Square to go grocery shopping."

They're going to Hyde Park Plaza, Smyjunas says.

Vandercar converted the 37-acre former Milacron Property, adjacent to Interstate 71, into the Center of Cincinnati, a 440,000-square-foot retail project with a Target, Sam's Club and Meijer stores. Next comes a 90,000-square-foot Expo Design Center, a Home Depot subsidiary, just to the east.

The two interests — preserving neighborhoods and bringing retail to the masses — are competing for space with each other around America. It's one of the hottest topics going in urban design, according to Shelley Poticha, executive director of the Congress for the New Urbanism, a smart growth group founded in 1993.

So far there's been little success merging the big boxes into existing cities without making pedestrian-hostile places. Parking is the major stumbling block. Garages typically cost $10,000 a space, and big retailers demand a parking space for every 200 square feet of store. In Smyjunas' case, that means a parking garage for the Expo Center would have cost at least $4.5 million.

But there's better local news on the design front:

· City West — a complete reworking of the West End's Lincoln Court and Laurel Homes public housing projects — is transforming the east half of Linn Street into a mixed-income neighborhood and re-creating streets lost to the public-housing super blocks decades ago.

· The Banks riverfront project is creeping toward its goal of a 24-hour mixed-use neighborhood with a 52-acre park, although years likely remain before it will be finished.

·Over-the-Rhine is gaining momentum after the sale of nearly 500 units once used for low-income housing.

Getting ours
Doucleff understands Milacron, a global machine tool company, needed to downsize in a declining industry and the site was convenient for the stores.

"Actually, I like Target. And Meijer is great," she says.

What bothers Doucleff is the way the next Vandercar project, the Expo Design Center, was approved. As late as June, she says, Smyjunas backed a project that would be more pedestrian friendly, with a parking garage.

But two months later he applied to build "four large, freestanding retail buildings ... (with) surface parking with no landscaping or screen fencing," according to an Aug. 19 planning department review. So far Smyjunas has only asked to build the Expo Design Center, a Home Depot subsidiary, on the site.

These plans directly contradicted the 2001 Oakley North Urban Renewal Plan, which Smyjunas participated in. But in August the city's Department of Buildings and Inspections approved the 90,000-square-foot Expo Center anyway, citing a need to redevelop "blighted" property — a word with notoriously flexible legal guidelines. The store is scheduled to open in early 2004, Smyjunas says.

Smyjunas has some friendly ears on Cincinnati City Council, many of whom are tired of watching Norwood and Newport finish project after project, some with tenants originally looking to build in Cincinnati.

Councilman David Pepper says the city needs to strike a balance between neighborhood business districts and big retail stores, both of which are important to the city.

"I'd rather have it in Cincinnati than in the suburbs," he says.

Councilman John Cranley says he's tired of hearing people ask why Cincinnati isn't doing things like Newport on the Levee and the Rookwood shopping plazas in Norwood, next door to Oakley.

The 800 jobs coming to the Center of Cincinnati aren't the same jobs Milacron offered, but they are jobs and they're inside Cincinnati.

"The economy is soft and frankly we have a lot of people who need low-wage jobs," Cranley says.

The need is especially strong in neighboring Madisonville, he says.

But that's a shortsighted view, especially with the valuable Oakley site, according to Doucleff.

"We shouldn't just do something for the sake of doing something," she says. "It's approaching our future in a piecemeal fashion."

The city, facing a $35 million budget deficit, is trying to change how it handles economic development. A task force created by council and appointed by Mayor Charlie Luken is in the middle of studying how to streamline the city's bureaucracy. One report found that the permitting process for a project in the city's enterprise zone took 437 steps.

"It's clear that what we're doing is not working," Pepper says. "It's painfully clear. I'm looking for some real, big picture change."

Other economic development organizations, including Downtown Cincinnati Inc. and the Port of Greater Cincinnati Development Authority — charged with carrying out The Banks — are re-examining themselves as well.

A public unveiling of the new, leaner city budget could come days from now. Some are speculating the Planning Department will be cut back and combined with the Community Development Department because of the deficit and the fact that Smyjunas is on the economic development task force.

"It's nice to draw pictures but planning should also take into account economics and demand," Smyjunas says. "And that's where the planning department falls short, big time."

When asked about cuts, the staffs of the city manager and mayor simply say the budget is being developed and will be released soon.

Planning Commission Chair Don Mooney was so concerned about the Planning Department he sent a Nov. 18 letter to all the city's community council members, urging them to tell city council how a professional planning staff helps guard the quality of neighborhoods.

So far Mooney has at least one supporter.

"The city's value is based on what we've done in planning," says Councilman Jim Tarbell, city council's representative on the planning commission.

Window dressing
In December 2000, as the Center of Cincinnati was going through the approval process, Oakley Community Council members raised questions about the future of the area, which has about 125 acres of industrial property left, Smyjunas says. The planning commission asked the city administration to begin a joint urban redevelopment plan.

The Oakley North Steering Committee, an 18-member task force, studied the industrial and residential areas between I-71, Madison Avenue and Ridge Road. The task force saw the potential for office, retail and residential development.

But they favored mixed-use projects with office, commercial and residential uses in the same buildings, combined with a parking garage to erase the typical sea of surface parking.

The plan took six months to write. City council approved it in June 2001.

Smyjunas worked with the city on the garage, but the plan didn't work because the city refused to use eminent domain to buy the necessary property, he told the Cincinnati Planning Commission Nov. 15.

"The comment was that we don't do that outside of downtown," Smyjunas said.

The director of the city's Community Development Department later said that's partly true.

"We don't do it in general, downtown or otherwise," says Peg Moertl.

Eminent domain would have tied up the project in court for months, she says.

More details come from a June 11 memo by former City Solicitor Fay Dupuis. Another part of the problem, she wrote, is that Vandercar already bought some of the homes. If the city bought the rest, the property owners would have been treated differently, Dupuis wrote.

Vandercar would also need to sign a development agreement with the city and follow the required public notification processes. This seems to contradict Smyjunas' lower-profile style of doing business.

Smyjunas told the planning commission he simply had to "fish or cut bait." Home Depot had an opening date it wanted to meet for the Expo, and it's not far-fetched to assume the company was ready to build it elsewhere.

There are 52 Expo Centers in the United States. Oakley's will be the second in Ohio, according to Karen Powers, public relations manager for the company.

"Which I think is a real coup for the city of Cincinnati," Smyjunas told the commission.

Powers says the Expo Design Centers don't look like regular Home Depot stores. They have a showroom feel, with 20 full-sized kitchens, for starters.

"You feel like you're in someone's home," she says.

Powers says the Pleasant Ridge Home Depot will also stay open.

Days after the planning commission meeting, Smyjunas spoke of the potential for the Center of Cincinnati to bring more growth and taxes to Oakley.

"I think the important story is about how retail creates so much more than just retail," he says. "It creates a node for other types of development."

This includes offices, residential and other uses.

But it's clear after talking to Smyjunas that pedestrian-oriented, mixed-use development is not a high priority for him. He understands its appeal but says that even Chicago has grocery stores with parking lots in front.

Planning Commissioner Caleb Faux gets the same feeling about Smyjunas. He says drawings of the mixed-use Expo Center project Smyjunas showed the Planning Commission were probably just "window dressing." Faux says he isn't calling Smyjunas dishonest, but he isn't sure Smyjunas had the expertise to pull off an admittedly difficult project.

"I don't know whether or not he knew how to do it," Faux says.

The new West End
Not every corner of Cincinnati is being big-boxed in.

The fruits of plans approved in the late 1990s for City West, a federal Hope VI project, are coming to bear today in the West End. More than nine blocks of mostly residential, mixed-income redevelopment — the largest such project in the city — is in progress near the intersection of Ezzard Charles Drive and Linn Street.

This is where the public housing projects Laurel Homes and Lincoln Court stood for more than 60 years, offering more than 2,200 housing units to low-income residents.

Almost all of that has been leveled. The housing projects are being replaced by 835 apartments and 250 townhouses carefully situated along a network of streets and a circular central park.

So far 226 of the apartments, evenly divided between former public housing residents and the general public, have been finished. At least 17 of the townhouses have been sold, with 18 more on the way soon.

The three-bedroom, 1,700-square-foot apartments rent for $975, according to Jim Fogler, portfolio manager for Community Builders, a non-profit company developing and managing a dozen Hope VI projects around the country. The three-bedroom houses have sold for an average of $180,000.

Inside and out, the two- and three-bedroom apartments are indistinguishable from many others in the Tristate. The kitchens are fully equipped, the closets are large and there's free parking in back. The same goes for the two- and three-bedroom homes, some of which are being reserved for moderate-income buyers.

Advocates of affordable housing worry about the loss of so many low-income apartments. It's an open question whether demolishing so many of them was in the long-term interests of poorer Cincinnatians.

Fogler says every qualifying Laurel and Lincoln resident was offered a Section 8 voucher. For many, this was their first chance to move where they wanted — as long as there's voucher-friendly housing. Community Builders also offered every resident training on how to look for housing.

The housing advocates would have a lot less to worry about if the Tri-state had a regional affordable housing strategy, instead of a default pattern of keeping affordable housing out of wealthier neighborhoods.

About 25 percent of the city's population live in neighborhoods that have almost no publically-assisted housing of any kind, according to Don Troendle, executive director of the Cincinnati Metropolitan Housing Authority.

"Until there's city policy that provides housing choice in a majority of the city, our household choice is limited," Troendle says. "I think that now becomes a huge public policy issue."

In any case, City West was carefully designed. It's one of the most urban-friendly developments the city has seen in recent years.

"That was our single most primary goal in the design of the subdivisions, to create traditional, walkable neighborhoods," says Jeff Raser, the principal architect for City West.

Fogler says people need to watch City West develop.

"Linn Street is going to change completely," he says.

Cars will park diagonally along the side and City West will have about 18,000 square feet of retail on ground floors. Community Builders will manage City West for 15 years. Part of the rents is set aside for maintenance.

"The idea of mixed-income is to not be able to identify what's what," Fogler says.

Remaking Over-the-Rhine
In August 2001 Hart Realty, the largest manager of low-income housing in Over-the-Rhine, filed for bankruptcy for 1,089 of its units in 201 buildings. Another 400 or so more profitable units stayed out of bankruptcy (see "The Fight For Over-the-Rhine", issue of Dec. 13-19, 2001).

A little more than a year later, Hart has reduced its mortgage debt from $8 million to $3.5 million by selling 489 of the units, more than half in an October auction, according to one of the debtor' attorneys, Dan Warncke of Taft, Stettinius and Hollister. The rest will be folded back into Hart Realty's operations.

The Hart Realty sale is one of the key reasons there's at least one new believer in Over-the-Rhine.

Peter Chabris, 29, lived in Cincinnati with his mother during summer 1994. Then he went to college and swore he wouldn't come back. He spent the past four or five years in Washington, D.C. commuting in a sport utility vehicle.

"It's just a terrible way to live," he says.

Chabris met a woman in D.C. who also happened to have Cincinnati roots. She bought a home in D.C. less than a year ago, but her grandfather became ill, so the two came to Cincinnati to care for him.

"We came out here and realized how much better the quality of life was here," Chabris says.

Chabris believes the people buying Hart Realty's buildings intend to improve them. He is also impressed by the city's Over-the-Rhine Master Plan because it seems to include everyone in the neighborhood.

"What I perceived as an outsider coming into this is critical mass, and there's a momentum and it's a diversified momentum," he says.

Two months ago Chabris came back for good, got a job with Coldwell Banker and bought 1405 Main St., a five-story building with a shop on the ground floor. He's living with his mother to save money, but is looking to eventually buy a house.

His friends in other cities didn't understand why he returned to Cincinnati. But they're people who've never visited.

"When they come out here, they say 'Oh, wow! Those buildings are beautiful,' " he says. "There's nothing like it anywhere else."

Urban Sites, Over-the-Rhine's largest private developer and building preserver, is riding out the poor economy well, according to partner Jim Moll. Its 121 apartments in Over-the-Rhine are almost all rented. The same goes for the 59 apartments at the Emery Center.

Last year was a tough one for the company, Moll says.

"We were re-educating people again," he says. "We went backwards five years in 2001, and it stayed that way until about July of this year. And then the flood gates opened."

Now the company is working on developing condos in the $110,000 to $250,000 range, something Moll says are in short supply in the city's center. At this point developers of condos under $300,000 still need subsidies to cover the tremendous rehab costs.

There is money available to help. The Cincinnati Development Fund (CDF) has loaned all of the $18 million it had for its Urban Living Fund, but the organization has already accepted another $3 million in applications for the next round of loans, according to CDF Director Jeanne Golliher. The money, which came from six banks, is helping to develop 175 market-rate units.

Golliher says she's seeing the most activity around Findlay Market, although the applications are all over the neighborhood. She's hoping to raise another $25 million from the same banks, plus foundations.

"We can't let this enthusiasm wither on the vine," Golliher says.

The 2001 uprising in Over-the-Rhine might have been the wake-up call leaders needed to work on the neighborhood — a local version of Cleveland's burning river.

Speaking of rivers, The Banks riverfront plan is slowly becoming reality. Last March the project netted a $21 million investment from the Hamilton County Treasurer. Port Authority leaders are crossing their fingers for grants of $11.5 million from the U.S. Department of Transportation and $2 million from the U.S. Economic Development Administration, according to Executive Director Tim Sharp.

As construction begins, the stores, apartments and offices in The Banks will gradually generate taxes that can be borrowed against to help finish the rest of the project. Sharp expects the Port Authority will eventually have $40 million of that money to help build the remaining parking garages needed for The Banks.

Otherwise, the Development Authority is working on eight brownfield projects, with more under exploration, Sharp says.

Sharp and the Port Authority's board understand it can't force businesses and people to move to The Banks. A 2001 market survey told the Port Authority it shouldn't try to build as much retail, office and hotel space as initially planned, but found the condo and apartment market strong.

For the moment The Banks is still in contention for the much-discussed headquarters for Convergys, the local customer service company looking to consolidate its various buildings.

"We'll build what the market will bear," Sharp says.

Not a market to watch
Fitting small businesses, homes and apartments in traditional neighborhoods is almost a no-brainer. But big box retail and neighborhood squares have yet to find a peaceful way to coexist, although some creative developers are trying to merge them.

Target, Meijer, Wal-Mart and other major retailers know how to make money in a highly competitive retail industry. They know what products to put where, how many parking spaces they need and where the best locations are.

At least that's the uncompromising stance they take when they shop for new locations. If a developer can't fit the formula, too bad. There's always another place to go. Arn Bortz, a partner in Towne Properties, says that's just about the situation developers face when dealing with big box retailers. Bortz, a former Cincinnati mayor, has been in the development business since 1976, mostly concentrating on projects in or close to downtown.

"They're not sentimental about old neighborhoods," he says. "They could give a damn."

The ease of building malls and strip centers in America is part of the reason our nation of 300 million people has enough retail space to serve 700 million people, according to Stan Eichelbaum, president of Marking Developments Inc., a local retail consulting firm with clients in 38 countries. There's no doubt the country is overbuilt with retail, he says.

"Cincinnati is probably on the leaner side of that," Eichelbaum says.

The quality of Portland's urban design generates more talk every year. But Eichelbaum, whose company consults for that city, says Home Depot is the number one retailer Portland wants but doesn't have.

Retailers, who operate on very thin profit margins, haven't been eager to stray from their formulas, Eichelbaum says. But that fear is slowly giving way, he says.

"They're becoming more and more comfortable (with mixed-use designs)," he says.

One case in point is Stapleton, a huge New Urbanist community being developed from Denver's old airport by Forest City Development of Cleveland. The 75-acre project is one of the more creative attempts to merge big retail with walkable neighborhoods.

There is still lots of surface parking, but the super Wal-Mart, Office Depot, Home Depot and other big box stores are surrounded by smaller stores to give people a reason to walk around the buildings. The development also includes 12,000 homes and apartments, plus a proportional amount of office and retail space, all situated on a grid with predictable streets.

"We struggled with it," says Jim Chrisman, Forest City's senior vice president of development. "And it's far from being the answer."

Chrisman looked into parking garages, but came up short. The only way to build them is by borrowing against the project's future taxes.

"Retail by itself just can't economically support parking structures," he says.

One way to get around that is through good mass transit, which Hamilton County voters slam-dunked a few weeks ago, rejecting a sales tax for public transportation.

Developers such as Smyjunas endlessly talk about meeting the market's demands. But "Emerging Trends 2002" — a widely-read real estate industry report by PricewaterhouseCoopers — discourages investors from buying into big box retail in sprawling regions.

"Interviewees have come to realize that properties in better-planned, growth-constrained markets hold value better in down markets and appreciate more in up-cycles," the report says. "Areas with sensible zoning (integrating commercial, retail and residential), parks, street grids with sidewalks will age better than places orientated to disconnected cul-de-sac subdivisions and shopping strips, navigable only by car."

This is most true in the country's "big five" 24-hour cities: New York, San Francisco, Chicago, Boston and Washington. (Note to Cincinnati politicians: These are not the cities with the lowest tax rates, nor are they the easiest places to build a strip center.)

"Markets where you can build too easily tend to produce lower returns," the report says, adding that the development constraints are sometimes geographic.

Cincinnati is not one of the 31 cities listed as a "market to watch." But Minneapolis, Nashville, Indianapolis and even Detroit are.

The apparent marketability of well-placed mixed-use real estate is no surprise to Chris Leinberger, one of three partners in the Arcadia Land Company, a New Urbanist developer.

In a May 2001 paper, "Financing Progressive Development," Leinberger blames conservative investment formulas for building sprawl. Decades of suburban standardization have led investors to only deal with 19 basic but proven types of buildings, ranging from malls to low density suburban apartments to single-income subdivisions, according to Leinberger.

All of these are designed to be short-term investments, generally for seven to 10 years. Investors need a formula for better built, mixed-use projects, which Leinberger believes will return much more money on the average than sprawl. A century ago developers spent heavily on quality construction because they expected to get a return over 40 years and not just seven to 10.

But so far progressive developers haven't established a consistent track record. This will take years and trial and error. Good urban design is like good painting: You can't do it by numbers.

So far most of the 400 progressive development projects being built are along the coasts and in the southeast, according to Shelley Poticha of the Congress for the New Urbanism.

Backing down
The Oakley Community Council filed an appeal of the Buildings and Inspections' approval of the Expo Design Center in August.

Soon Doucleff received phone calls from several residents who had contracts to sell their homes to Vandercar. A few said Smyjunas told them Doucleff "was trying to keep them from moving forward with their lives."

"I don't care how she wants to spin it," Smyjunas says.

He denies making the statements cited by Doucleff.

The callers were angry, but they didn't know about the city's decision and why Doucleff had filed an appeal, she says. At least one caller threatened to do anything she could to stop Doucleff and the community council.

The community council's attorney said there was no legitimate legal liability, but added that defending a lawsuit could deplete the few thousand dollars the council had saved. It might even cost some of the council members.

The eight members at the meeting were evenly split on whether to risk the lawsuits and pursue the appeal, according to Doucleff.

"When push came to shove, we couldn't do that to one another," she says.

They pulled the appeal, and the project rolled on.

"It was a gut-wrenching decision," she says.

Smyjunas, meanwhile, is scouting Vandercar's next projects.

"We're in the process of looking at a bunch of different things," he says. ©