News: Development on Hold

A year of second-guessing big projects

 


The year 2001 began with fiscal doubt and ended with a full-scale recession, hampering some of the major development projects in Cincinnati.

Only Newport's redevelopment seems unfazed by the economic downturn. Developer Nick Ellison said Dec. 19 a deal for the first Hofbrauhaus location in the United States could be signed in seven to 10 days.

Advocates of light rail and MetroMoves, the proposed overall of the Queen City Metro bus system, took a step back from their work this year, realizing they have more thinking to do.

Backers of The Banks, the neighborhood planned between the stadiums, pushed toward a funding solution, but Hamilton County leaders are still skeptical.

A task force on expansion of the convention center gave up on its original 350,000-square-foot plan; now it's focusing on a 200,000-square-foot expansion.

Banks helping The Banks

The debate on financing Cincinnati's remaining riverfront development is becoming a discussion of how long people believe the recession will last.

The bullish Port of Greater Cincinnati Development Authority is certain the county's sales taxes — down by about 2.6 percent this year — will rebound soon, enabling the county to cautiously borrow $68 million for underground riverfront parking garages, which are the foundation for The Banks development.

County sales tax revenues have increased an average 6.9 percent annually since 1971.

The port authority — which is responsible for developing The Banks — wants the county to borrow the money as soon as possible. But earlier in 2001, the bearish county commission rejected the idea, believing it would overburden the county with debt, straining an already tight riverfront budget. Commissioners wanted some sort of private support to go along with the county's dollars (see Busting the Banks issue of Oct. 4-10).

In response, the port authority negotiated a commitment by Firstar and PNC banks and the Ohio Department of Transportation to back $68 million in county bonds. If sales taxes don't increase, the banks and the state would loan the money at interest rates between 4 and 5.5 percent to cover the gap, according to Tom Humes, a port authority board member. The loans would be repaid only after the county's annual stadium debt, property tax rollback and payments to Cincinnati Public Schools are satisfied.

County commissioners John Dowlin and Todd Portune are skeptical.

The proposal would increase public debt and add years to the stadium debt repayment, according to Portune.

"That's not a solution, in my mind," he says.

Portune also says The Banks may need to be reworked in light of a November study by Property Advisors, a local real estate consultant. It concluded there is little demand for new office space and hotel rooms downtown. The study also found demand for only about 60 percent as much retail as planned, but very strong demand for apartments and condominiums.

That isn't a surprise, says Humes, who believes the study proves the original plan for The Banks is on target. Unveiled in Sept. 1999, it called for 600 to 800 residential units, up to 300,000 square feet of retail/entertainment, up to 200,000-square feet of boutique office space and up to 400 hotel rooms on the riverfront.

The Banks will probably include a little less retail and a little more residential, but the hotel isn't supposed to be built until the project's second phase, years from now, Humes says.

"You can't just go with what's hot today," he says.

The port authority has gotten steady calls about boutique office space, according to Humes.

The port authority is also heeding Portune's push to make the proposed 52-acre riverfront park a higher priority. The garages have to come first because there can't be a park if the project reverts into a sea of surface parking, Humes says.

The port authority has identified three potential development teams for the riverfront portion of The Banks, and nine others are in the running for projects north of Third Street. Humes expects to see proposals from the riverfront developers by the spring — about the time he hopes the financing will be worked out.

Al Neyer Inc., in which County Commissioner Tom Neyer Jr. is involved, isn't one of the developers. Neyer withdrew his company's bid in October in light of an apparent conflict of interest.

Meanwhile, the port authority is moving ahead on its other main responsibility — brownfield redevelopment — on a nine-acre project in Sharonville. The old Green Industries site has been a U.S. Environmental Protection Agency superfund site, but Neyer Properties (no relation to Al Neyer, Inc.) is interested in turning it into an office park.

Next year the state's $200 million brownfield fund will provide $40 million toward similar projects statewide. Tim Sharp, president of the permanent port authority, believes some of the money will reach the Tristate.

On second thought
Downtown business leaders have been talking about the need to expand the Albert B. Sabin Convention Center for years; the last major renovation was in 1987. Conventions showcase the city to visiting businesses, perhaps convincing a few of them to relocate or expand here, advocates say.

"We have to sell the city," says Dan Meyer, chair of the task force on the project and former chair of Milacron, Inc. "And we're not doing a very good job of it."

The task force, created in May 2000, had endorsed a $350 million expansion over Interstate 75. But the county commissioners declined to grant a $50 million request.

"I have been suspicious of this project for a long time," Dowlin says.

Then came a study by the Urban Land Institute that said the city would get more for its money with a smaller expansion, in part because so many other Midwest cities already have large convention centers.

By November, the task force members shifted their focus to a $171 million expansion that would make the center competitive for 75 percent of all conventions — only 10 percent less than the old plan — for about half the cost, Meyer says.

The task force expects an increased county hotel tax and new countywide restaurant tax to raise millions. State legislators first have to pass a law that enables counties to pass a restaurant tax.

Hold that bus
The two major transportation projects in Hamilton County might be quiet now, but taxpayers should expect to hear more about them in 2002.

MetroMoves, the makeover of Queen City Metro, is on hold while planners work on details, including more specific cost estimates. When Metro unveiled the plan in the spring, it estimated the cost between $108 million and $192 million.

"That's a pretty big spread," says Metro spokeswoman Sallie Hilvers.

The plan calls for 26 transit hubs, which would include bus stops, stores and other services. MetroMoves also calls for a new network of east-west routes, community routes and smaller buses on some routes. The plan will require a decade to complete (see MetroMoves to You issue of March 29-April 4).

Two transit hubs are already in the works at Knowlton's Corner in Northside and on the riverfront, under the new Second Street. The latter should open by spring.

Once more details are available, possibly in the spring, the Southwest Ohio Regional Transit Authority (SORTA) expects to ask voters to approve a sales tax increase of at least 0.25 percent.

The light rail line along the Interstate 71 corridor is out of the spotlight. A public outreach in early 2001 led project managers at the Ohio-Kentucky-Indiana Regional Council of Governments (OKI) to begin work on other potential lines to connect to an I-71 line and to find ways to cut the project's cost, which seemed destined to reach $1 billion.

The public wants a bigger system at a lower price, according to Judi Craig, OKI's division manager for the corridor studies.

Over the summer the Federal Transit Administration (FTA) did not recommend matching funding for OKI's 19-mile I-71 corridor light rail proposal, rating it 38th of 42 applications. OKI is counting on a 50 percent federal match on the project.

Craig says the low rating was mostly the result of not having local matching funds. But the FTA also gave low ratings to the project's estimated ridership numbers, which were about half of what FTA-funded projects have had. ©

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