The city is stuck with this vacant lot at Fifth and Race across from the Lazarus store. (Enquirer file photo) | ZOOM |

        The downtown Cincinnati site reserved for a swanky Nordstrom department store likely will be a surface parking lot by Christmas. And it probably will stay that way for at least a year.

        Even as city officials reeled Wednesday from the news that the coveted retailer had backed out of a $48.7 million deal, they were making plans to fill and pave the vacant lot across from Lazarus department store.

        “If there's not a truck at Fifth and Race streets tomorrow morning that speaks to filling that hole in ... there's going to be cause for pause,” Councilman James Tarbell said. “We have to do something quick.”

        A parking lot is not a long-term solution, but he said it is more than just cosmetic surgery on a lot now marked by a hole and a chain-link fence.

        Other council members agreed, saying downtown merchants have been begging for more parking spaces — and this is a chance to deliver them.

        “It's not just a service to downtown retailers,” Mr. Tarbell told the Enquirer Thursday. “It gets people interested in a prime location downtown while we wait for the miracle to fall out of the sky.”

        What counts as a miracle? For city officials, another department store or tower featuring a hotel, office space or apartments. But serious development will be at least a year away, City Manager John Shirey said.

        “It's a setback and it is causing us to lose time,” he said. “There are things that are going to have to be addressed before another deal is put on the table."

        Part of the problem is a tangle of ownership rights at — and above — the site. A proposal that would have resolved those rights was scuttled Wednesday when Nordstrom pulled out.

        It involved transfering air rights — or the rights to develop above anything built at Fifth and Race streets — to a proposed parking garage at Seventh and Elm Street that the city promised in addition to the $48.7 million financial package.

        Now the rights — owned by Fifth Third Bank and a group of local developers called the Cincinnati Development Group — will remain at Fifth and Race.

        Another problem is the city's preferred developer, Eagle Realty, which owns one of the two parcels of land where Nordstrom would have been built.

        Council said Wednesday it was not happy with Eagle's pace in dealing with Nordstrom and now wants other developers to have a shot at it.

        “I have been frustrated,” Mayor Charlie Luken said of Eagle, adding that he plans on using Nordstrom's pullout to “default” the city's contract with Eagle.

        “I don't mind them participating in a request for proposals,” he said. “I do mind them being the only developer on that site.”

        He said this is a chance to “open our minds a little bit and let the sunshine come in.”

        Eagle had other plans Wednesday. Tom Stapleton, senior vice president of investment management, said the company will begin negotiations with other department stores.

        As a property owner, Eagle has more rights than those normally associated with a preferred developer, Mr. Shirey said. And if council wants to replace the developer, it could mean acquiring the property from Eagle.

        Councilwoman Alicia Reece called it a prime piece of property.

        “This is an opportunity to look at a new vision,” she said. “We have a great opportunity.”
       

Back to ground zero

               Nordstrom Inc. told the city Wednesday it was pulling out of plans to build in downtown Cincinnati and downtown Pittsburgh. In the wake of declining profits and soft sales, store officials said, they need to focus on existing stores, adding that two proposed downtown stores “didn't make sense.”

        A proposed Nordstrom in Deerfield Township was not affected by this decision.

        While store officials did not close the door entirely on a downtown store — indicating discussions might resume in a year — Mr. Shirey said that was nothing he could count on.

        Attempting to put a positive spin on the situation, Mr. Shirey said the city would save about $48 million by not doing the deal. But much of the Nordstrom financing came from sources other than the city - including a state loan and a private equity fund.

        Even the city's portion of the money was being generated through bonds and tax-increment financing — funds that Nordstrom would have paid into the project instead of property taxes.

        Not doing the project leaves the city only a “couple of million” dollars in actual savings, city officials confirmed.

        Councilman Todd Portune said he doesn't want to lose the momentum that enabled the city and its partners to come up with the financing that might have made Nordstrom possible. He said the city needs to focus on its longtime goals of downtown housing and parking — and use whatever savings it can to leverage projects without Nordstrom.

        Other council members agreed, saying the effort can start with a surface lot at Fifth and Race.

        Despite the ownership concerns and property rights, Mr. Shirey said he doesn't see a problem.

        “Anybody who stands in the way of a parking lot is not looking out for the best interests of the city,” he said.

        Ken Alltucker contributed to this report.
       

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