Friday, August 16, 2002
Downtown retail projects slowed by drab economy
By Ken Alltucker, kalltucker@enquirer.com
The Cincinnati Enquirer
More than a year and a half after Nordstrom pulled out of a deal to build an upscale store downtown, all that remains on the site at Fifth and Race streets is an asphalt parking lot.
What's more, there seems to be little urgency by the private developer in charge of the project, Eagle Realty Group, or City Hall, to formulate a plan for the prime downtown lot anytime soon.
I would think we would all have liked to see something there by now, said Peg Moertl, director of community development for Cincinnati. It would have been great to have a plan when Nordstrom backed out, but that was not the case.
In November 2000, Nordstrom rejected a $48.7 million aid package offered by the city to build a store designed to anchor the downtown retail district that includes Lazarus and Saks Fifth Avenue. Neither the city nor Eagle Realty, a division of Western-Southern Life Insurance Co., has announced a replacement project.
Tom Stapleton, Eagle Realty's senior vice president, envisions some type of retail development or possibly a high-rise residential tower with a garage. But he acknowledged that no firm plans have been established and lease negotiations with potential retailers have been slow.
It is hard to make economics work in downtown Cincinnati for any project, Mr. Stapleton said Tuesday. We are talking to retailers directly.
Ms. Moertl said city staffers recently met with Eagle Realty officials, but no specific project was discussed.
The closest thing to any post-Nordstrom vision for what some describe as downtown's most developable piece of land came when an Urban Land Institute panel in March 2001 recommended a convention center expansion.
A task force appointed by Mayor Charlie Luken dismissed the eastward convention center expansion as too costly (because it would require the demolition of the renovated Millennium Hotel) and impractical (difficult access). Instead, the city was working on a scaled-down, $200 million expansion to the west toward Interstate 75.
Of course, the Nordstrom site isn't the only downtown development that has struggled to get its footing over the last 18 months because of the slowing economy, April 2001's riots and the Sept. 11 terrorist attacks.
Madison Marquette has had little luck finding tenants for a planned retail and office project at the former McAlpin's department store on Fourth Street.
It's just a tough environment, said Rob Acker, director of development for Madison Marquette.
Mr. Acker said the slow economy has made businesses reluctant to invest a lot in expensive downtown projects.
Not all parts of downtown development are struggling. Two large apartment complexes, the Power building and Sycamore Place at St. Xavier Park, added more than 220 apartment units to downtown this summer. So far, leasing has been strong.
Mr. Stapleton said Eagle has considered a high-rise residential tower for Fifth and Race, but no firm plans have been studied.
There was a proposal that called for a future residential tower on the site, Mr. Stapleton said. That is still an option.
Many cities across the U.S. are turning to residential development as the savior for downtown instead of courting large retailers to compete with suburban malls. Large retailers this year have abandoned downtown locations in Dayton and Cleveland, leaving both without department store anchors.
Cincinnati's downtown retailing has struggled, too. In addition to Nordstrom dropping plans for a downtown store, City Council approved a $6.6 million aid package to keep the Saks Fifth Avenue store in business.
With the slow economy, Mr. Acker said now is a good time for downtown interests to pause and reflect about the future of downtown development.
That's what Cincinnati and several civic organizations are planning to do.
The city and three other agencies Downtown Cincinnati Inc., the Greater Cincinnati Chamber of Commerce and Cincinnati Business Committee are crafting a strategic downtown plan that will measure the types of uses ideal for downtown.
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