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Business Development News

Cincinnati Gentrified at One of Nation’s Fastest Rates Immediately Following Housing Boom

Vine Street [Travis Estell]

During the housing boom years between 2000 and 2007, many cities saw an influx of new housing and new wealth into their core neighborhoods. It was a trend that was consistent throughout America as wealthier individuals looked to move back into the cities that had been abandoned in prior decades.

This trend was more pronounced in some cities – Atlanta, Washington D.C., Denver, and Seattle – than others. But for the most part, the majority of the cities were gaining wealth relative to their regional average. Following the burst of the housing bubble, however, virtually every city saw this rate of improvement slow down.

According to research from the Federal Reserve Bank of Cleveland, the majority of 59 cities studied now fall between either a one percentile decline or one percentile increase between 2007 and 2010. This is in contrast to the housing boom period which saw cities like Atlanta and Washington D.C. move up 8.7 and 5 percentiles respectively.

“During the housing boom, a number of large cities in the United States experienced redevelopment in their lower-income neighborhoods as higher-income residents moved in, a process known as gentrification,” wrote researcher Daniel Hartley. “Since lending standards have tightened with the onset of the housing bust and the financial crisis, we wondered whether gentrification has continued after the recession in places where it was happening before.”

The results of their research found that only a select handful of regions reasonably continued to see relative wealth growth in their principal cities. The findings also detected one region that bucked the trend and actually increased its gains over the housing boom period.

“Another interesting case is Cincinnati, which barely changed in income ranking from 2000 to 2007 but has increased at a pace similar to Denver or Washington during the 2007 to 2010 period,” the research team noted.

Hints of such activity were realized in December 2013 when UrbanCincy uncovered that census tracts all over the city were experiencing wealth increases.

While the gains in wealth may seem like a positive thing for the city, not everyone is so thrilled about the changes taking place in Cincinnati.

“It seems to me what this information really indicates is how, when people experiencing poverty are systematically removed from a certain area, and housing stock is renovated with the goal of selling to wealthier people, property values increase,” says Jason Haap, an area teacher and prominent advocate for the city’s homeless population. “The fact that Cincinnati has seen gentrified growth during a time of slow economic growth in minority communities further exacerbates the situation.”

One of the tools in order to prevent the displacement Haap mentions from happening is including ‘set asides’ in new developments for affordable housing. The Cincinnati Center City Development Corporation (3CDC) has done this a bit in Over-the-Rhine at projects like Mercer Commons and Bremen Lofts, but there is no official city policy or requirement to do so.

What also factors into the relative changes studied by the Federal Reserve Bank is the widespread poverty and low income levels of those living within city limits. Thus, even nominal improvements would show up as a potentially significant increase.

We do know, however, that some housing prices, particularly in the city center where demand is highest, are starting to get out of hand. Most new apartment developments in the Central Business District now feature rents of $2,000 or more per month, and in one recent case, a three bedroom flat on Sixth Street rented for a whopping $4,600 per month.

In such cases it is leaving many now wondering if these prices are not only driving out existing residents but, paradoxically, also preventing many new potential residents from moving in.

“Demand in Cincinnati’s core is insatiable, and supply is only coming online at a trickle,” explained Derek Bauman, an urban development consultant and chairman of Cincinnatians for Progress. “Without urban housing supply, we may miss the coming wave of new residents. At nearly $2 per square-foot rents and $250-$300 a square-foot sales, we may not have Manhattan prices yet, but we’re damn near Brooklyn.”

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Business Development News

Second Phase of Newport on the Levee to Come More Than 15 Years After First

View of Lot B Development [Provided]

Newport on the Levee was the talk of the town in the late 1990s. It was to be one of the most prominent development projects in the urban core for some time, and transform Newport’s riverfront into a place that would attract tourists year-round.

There were also lofty visions that the development of Newport on the Levee would spark a wholesale redevelopment of the Northern Kentucky river city, including virtually every neighboring property and the development of the 1,000-foot-tall Millennium Tower.

These ambitions, however, were never fully realized. Newport on the Levee experienced a number a setbacks and never fully embraced the mixed-use nature that would ensure its success, Millennium Tower was cancelled almost as quickly as it was proposed, and while surrounding development has taken place, it has come at a much slower pace than envisioned.

Earlier this month developers took the next step forward with a plan to build on the long vacant Lot B next to the Purple People Bridge that would aim to address those issues.

According to Capital Investment Group (CIG), the investment would total $80 million and add 238 residential units, 8,000 square feet of street-level retail space, a 150-room hotel and an 800-space parking garage.

Newport city officials and CIG representatives say they intend to start construction in July 2015 and wrap-up a year later.

While this is good news for Newport on the Levee, it is certainly not when or how developers and city officials had originally envisioned the riverfront development taking shape.

In 2000, the plan was for Newport on the Levee to include a mall with a movie theater complex, an aquarium, a state-of-the-art 3-D IMAX theater, and a second phase of development that would begin just two years later and be anchored by a 200-room hotel.

Problems arose almost immediately when the 3-D IMAX shut down just two years after it opened in 2001. The retail portions of the mall also never seemed to live up to expectations, perhaps following in Tower Place Mall’s footsteps and illustrating that enclosed shopping malls tend to not work in urban settings.

As a result, the mall portion of the development has seen a constant cycle of tenants in and out, and more recently the replacement of most retail inside the mall structure by office tenants. Several restaurant operations have even relocated across the river to The Banks development. The former 456-seat IMAX theater has since been filled by the successful Newport Aquarium.

Shortly after the opening of the first phase of work at Newport on the Levee, city officials also pursued the USS Cincinnati submarine in an effort to dock it along the shore of the Ohio River next to Newport on the Levee. Those plans never materialized and now only a portion of the submarine vessel will be returning to the region – at a location in a future phase of Smale Riverfront Park along Cincinnati’s riverfront.

During all of this Newport Aquarium has been a particularly bright spot for the development. It is consistently named one of the nation’s best aquariums and is a constant draw for tourists and locals alike – attracting more than 11 million visitors since it opened 15 years ago.

With the Great Recession now in the past and new competition from The Banks, Newport officials and developers are looking to jump start things once more. The second phase of Newport on the Levee may be more than a decade behind schedule, but it will add a critical component that was sorely missing from the original development.

Full-time residents and a hotel at the site will help drive more business to shops and restaurants operating outside of the typical weekend hours popular for tourists. The revived talk of extending the streetcar system across the river also shows a new sense of collaboration and possibility that did not exist in the lead up to the new millennium.

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Business Development News

VIDEO: New Views of Ohio River Opened Up with Latest Excavation Work at Smale Riverfront Park

Lots of visual progress has been made on Cincinnati’s $120 million Smale Riverfront Park over the past few months.

Since the last construction update in June, project manager Dave Prather explains that the steel framing for Carol Ann’s Carousel is now taking shape, and that the Vine Street fountains and steps have now fully taken on their form. These steps and cascading fountains will be similar to the Walnut Street fountains and steps already completed to the east.

Prather also takes us inside the rentable event space beneath the carousel and fountain plaza.

While it is still quite messy with construction activity, Cincinnati Parks officials are actively promoting it and booking reservations now. Park officials tell UrbanCincy that the Anderson Pavilion will have two event spaces – Longworth Room and Mendenhall Room – that can accommodate up to 300 people. Special events can be booked through Premier Park Events at 513-221-2610.

During the nearly 12-minute video, you can also now see a new view of the Ohio River now that excavation has begun on the park’s great lawn. This area of the park will bring visitors as closer to the water than anywhere else.

Most all of the work profiled in this latest video update is anticipated to be complete in time for the 2015 MLB All-Star Game at Great American Ball Park. The week-long festivities leading up to the weekend of games is expected to being thousands of visitors and millions of eyeballs to the city’s central riverfront.

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Business Development News

Will Saks Fifth Avenue Remain in Downtown Cincinnati Following Collapse of its Kenwood Move?

Kenwood Collection [Provided]

News spread quickly yesterday that the deal for Saks Fifth Avenue to relocate from downtown Cincinnati to Sycamore Township at the new $200 million Kenwood Collection had fallen through.

The announcement drew immediate speculation about what happened and where the high-end department store might locate instead, if anywhere at all. Since representatives at Saks Fifth Avenue have been mum during the whole process, little information is known about what will happen in 2016 when they had been expected to relocate to Kenwood.

Here’s what we do know.

The current Saks Fifth Avenue store downtown opened in 1983 and was renovated in 1996 and again in 2003 thanks to $8.7 million in city funds. The 2003 renovation also included a stipulation that Saks extend the lease for their downtown Cincinnati store for 15 years (2018), and not open another store within 30 miles for at least seven years (2010). For what it’s worth, Kenwood Collection is located approximately 11 miles from Fountain Square.

The terms of that 2003 agreement, however, are a bit murky. According to the Business Courier,

Part of the agreement with the city says Saks can be released if “Saks sells the Saks store on the property to an entity which acquires the majority of the Saks stores then located in the states of Ohio, Michigan, Illinois, and Pennsylvania.” Toronto’s Hudson’s Bay Co. acquired Saks in a deal that closed at the beginning of November.

The clause basically appears to give Saks an out on their lease agreement that would otherwise keep them at 101 W. Fifth Street until 2018. While the existing store is 72,640 square feet, Saks had reportedly signed a letter of intent with Kenwood Collection for a slightly larger 80,000 square-foot space.

The rumors following yesterday’s announcement largely discussed one of three potential scenarios: 1) Saks closes its only store in the Cincinnati region as it has done in other mid-sized markets; 2) Saks relocates into the retail space at the $140 million dunnhumby Centre, which, interestingly enough, was to become the home of a Maison Blanche in 1998 and then eyed for a Nordstrom in 2000; or 3) Saks relocates into the retail space at a restructured unnamed development at Fourth/Race.

The first scenario is something that would be very difficult to predict, but the second and third scenarios present interesting opportunities and challenges.

The biggest challenge with Saks moving across the street into the dunnhumby Centre is that it only has 30,000 square feet of retail space. Since the building is already far along in construction, it seems unlikely that the development team would be able to modify it in a manner to provide an additional 50,000 square feet of space for Saks.

The unnamed development at Fourth/Race had a grocery store lined up to occupy its even smaller 20,000 square feet of retail space, but that development agreement has since been substantially restructured and is currently being reworked. This leaves open the possibility that Flaherty & Collins and the Cincinnati Center City Development Corporation (3CDC) could adjust the design as to accommodate Saks.

In both of these cases it would allow for the redevelopment of Saks’ existing structure at the southwest corner of Fifth and Race Streets. This would prove to be important in order to clear the way for developers to build a new residential high-rise in its place. Both of these options would also keep Saks within a block of Macy’s 180,000 square-foot downtown store, and along the stretch of Race Street that city officials hope to turn into a shopping corridor.

The combined demolitions of the aging Pogue’s Garage and existing Saks Fifth Avenue store would also allow for the removal of two to three skywalks/bridges over Race Street.

Of course, there is one more option. Saks could simply stay where they are and live out their lease through 2018, or even renew it beyond that.

CORRECTION: In the original story it was incorrectly stated that the existing Saks Fifth Avenue store in downtown Cincinnati is 185,000 square feet. The store is actually 72,640 square feet.

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Business News

Apple Street Market Cooperative Hoping to Fill One of Cincinnati’s Food Deserts

For the first time there are no grocery stores in College Hill, Northside or Clifton. At one time each neighborhood had their own store including a Kroger in College Hill, IGA in Clifton and Save-A-Lot in Northside.

When Save-A-Lot closed its Northside store in November 2013, however, it got the attention of the Cincinnati Union Coop Initiative (CUCI) and sparked an effort to open a community-owned grocery store in its place called Apple Street Market.

There is only one full-service grocery store within a three-mile driving distance from Northside – a Kroger on Mitchel Avenue. That Kroger, however, is not served by Metro’s #17 bus route, thus leaving carless households with only Metro’s #16 route as their option. The problem is that the #16 bus route does not run on Sundays and only runs every half-hour after 4pm.

“This makes a grocery trip an arduous and time consuming journey if you do not have a car,” said Casey Whitten-Amadon, legal counsel for Apple Street Market. “The trip can take more than three hours, in all types of inclement weather.”

It was the closing of the Save-A-Lot, however, that really sparked the effort to open a new community-owned grocery store in Northside.

“I knew that CUCI had been starting worker owned ventures. So, I approached them about a grocery store within the first week of Save-A-Lot closing,” said Heather Sturgill, a Northside resident and community advocate.

CUCI did a lot of searching to find the best fit for the new store. They were not specifically tied to Northside, but after surveying about four different neighborhoods, along with conducting market studies and market analysis for grocery stores, they found Northside to be the perfect fit. One of the key reasons for this, they say, is that Northside had an existing space that was in great shape and needed little to no demolition or remodeling.

This was important, and stands in contrast to the ongoing difficulties Clifton is having in trying to open their own cooperative grocery store on Ludlow Avenue, because they did not have the capital nor did they have a large investor that would finance the project.

This is particularly complicated by the financial model of union co-op businesses, where a large investor cannot have a larger share of the profit or a larger share of the governance rights. Rather, each person or entity that invests in the store gets an equal share and one vote regardless of the investment.

In the case of Apple Street Market, CUCI is accepting $100 or $10 from lower-income investors.

While raising the capital for a union coop startup can prove to be extremely difficult, Northside’s effort has been aided by a large number of enthusiastic volunteers that also set the community apart from others in the city.

While this collection of neighborhoods represents a relatively new and small food desert in Cincinnati, it comes at a time when many policy makers are looking to fix such problems.

“This is another reason that we decided to go ahead with the project in Northside,” said Whitten-Amadon. “The main benefit to community ownership is the opening of a unique store that is owned by the workers and the community.”

He also says that success and profitability will be shared by the community, and that being able to make decisions collectively will help create a sense of pride in the neighborhood store.

While community leaders are excited about the potential benefits for the community investors and workers, they are also looking forward to the local specialty items that will be stocked at Apple Street Market. Organizers say that the plan is to provide a larger than average organic and produce section, and sourcing much of it from Our Harvest – another area worker-owned business started by CUCI.

But Sturgill says that they will also be including up-and-coming brands to give the store an affordability that most health food cooperatives do not have.

“We tried to get fresh foods in some of the other corner type shops but the owners didn’t seem interested enough to follow through,” Sturgill told UrbanCincy. “This is intended to be the first in a chain of worker/community owned groceries.

A future additional location for this type of store, she says, could be in College Hill at the new development planned for North Bend Road and Hamilton Avenue.

An official opening date has not yet been set for Apple Street Market, but Sturgill says the goal is to have it completed by spring 2015. Those who are interested in providing funding and making an investment in the store can do so by buying a share online.