By Cliff Peale and Ken Alltucker
The Cincinnati Enquirer

2003, a pivotal year for Cincinnati's downtown, started with a thud. One of its premier retailers, the 137-year-old Closson's, announced it will close its downtown store in March.

"Clearly, the economy has hit retailing very hard," said Cincinnati Mayor Charlie Luken. "This retailing problem, it's an epidemic."

Today, Fourth Street boasts Tower Place, but also has a large number of empty storefronts. (Jeff Swinger photo) | ZOOM |

Closson's closing comes as City Hall officials, downtown advocates and regional business leaders are vowing to inject more energy and attract more visitors to a downtown clearly in transition.

While more than $1 billion in tax money is being invested in sports stadiums, a museum and a residential/entertainment complex along the Ohio River, long-suffering businesses - including the five-star Maisonette restaurant - say they need more customers to remain open and compete against suburban entertainment and shopping centers.

At the same time, developers of two critical downtown sites - the old McAlpin's building on Fourth Street and the parking lot at Fifth and Race streets that just two years ago was to be a Nordstrom store - face an ultimatum from the city: Sign tenants and start construction or risk losing your contracts.

With few grand proposals and even fewer signed deals bubbling downtown, local business and civic leaders are pegging downtown's rebound to a comprehensive development plan being drafted by a New York consultant.

"It may be our last and best hope," said Arn Bortz, a former Cincinnati mayor, a Mount Adams-based developer and downtown advocate.

Picking a focus

Cities across the nation are fighting similar problems.

As two decades of pinning revival hopes on downtown malls and shopping centers proves to be ineffective, many cities are shifting the focus to sports, arts, entertainment or fine dining instead of retail. Cincinnati must do the same if downtown is to thrive once more, officials say.

The McAlpin's building has been vacant since 1996. (Glenn Hartong photo) | ZOOM |

"Downtowns have discovered that what they've got to sell is the experience," said Dave Feehan, president of the trade group the International Downtown Association. "The downtowns that succeed are the ones that have figured that out."

He pointed to cities, including Portland, Ore., that have had success attracting new businesses.

Mr. Luken said the most important thing City Hall can do to help retailers is to focus on residential and office development.

"I agree with those who say retail doesn't attract people," he said. "You have to have a people base, and then the retail will happen."

The economic importance of downtown to the eight-county Tristate is large. It provides more than one-third of the city's earnings tax receipts, mostly because it's the headquarters of such large companies as Fifth Third Bank and Procter & Gamble.

Even though a steady stream of downtown icons have disappeared from what once was the Tristate's most glamorous shopping destination, business owners are hopeful that a better economy, a strong mayor in City Hall and a strategic plan will make a difference this year.

"I believe in downtown, and I believe it will come back," said Jim Elkus of the Queen City Restaurant Group, who hopes to open a men's clothing store on Fourth Street this year.

INFOGRAPHIC

• The changed face of Fourth Street.

"It might take two or three years, but it'll come back."

Others are less optimistic. Closson's president Paul Darwish said the malaise is hitting even downtown's biggest retail anchors - including the Tower Place Mall, across Race Street from his store.

"I told the manager of Tower Place to spend more time in Cincinnati, because it won't be open in five years," he said.

The problems led business leaders last year to commission the strategic plan by New York consultant Hamilton, Rabinovitz & Alschuler. The consultant already has identified several priorities, including:

Emphasizing a nine-block core with Fountain Square at the center.

Pursuing mixed-used projects that combine apartments, offices, shops and restaurants.

Adopting a "zero tolerance" plan enforcing laws on crime, panhandling and other quality-of-life issues to make downtown less threatening for visitors.

"That will give us a strategy so we can move forward into actually doing more things," said David Ginsburg, president of Downtown Cincinnati Inc. (DCI), the marketing and services group funded by downtown property owners

Downtown's shopping woes are painful for longtime officials, such as Nell Surber, who spent nearly 30 years in the city's Economic Development Department.

"It really rocks me to see stores leaving downtown. Most of my life was centered in trying to do something downtown," she said. "As soon as part of it starts slipping away, you get to the point of no return."

Series of key events

Within the next few months, several signposts will show whether downtown's revival is taking hold:

Fifth and Race: By the end of January, the city has the option to warn Eagle Realty Group that it intends to terminate its development agreement by January 2004.

For nearly two years after Nordstrom ditched plans to build there, Eagle was mum on its strategy until November. That's when it unveiled plans to build smaller stores and about 840 parking spaces. No tenants have signed.

Tom Stapleton, senior vice president of Eagle Realty, said the company disputes the city's ability to terminate the deal. But he said Eagle, a unit of Western-Southern Life Insurance Co., wants to deliver a project in coming months to make the issue moot.

"Downtown needs to do some things different than the typical suburban mall," Mr. Stapleton said.

Saks Fifth Avenue: The store should start renovations early this year. The money will come from a $6.6 million city subsidy approved a year ago.

Saks is important to downtown officials not only as a high-end store with no suburban locations, but also as one of the anchors behind a Race Street retail corridor city officials have been promoting for years.

The interior of the McAlpin's building is a gutted shell. (Glenn Hartong photo) | ZOOM |

Old McAlpin's store: Vacant since the department-store company pulled out in 1996, the Fourth Street building could see a new developer or different project this year.

Cincinnati-based Madison Marquette hasn't been able to deliver a signed tenant for the promised $27 million office and retail renovation of the darkened stretch of Fourth Street between Race and Vine.

A year ago, City Council amended its contract with Madison Marquette to give the developer more time for the project, which stretches from the former Frisch's Restaurant at the southeast corner of Race and Fourth streets through the Newstedt-Loring Andrews building and McAlpin's.

That extension expired Dec. 31, but Madison Marquette has exercised an option to extend the project one more year. There have been no talks between the city and developer, said Peg Moertl, the city's community development director.

Under the agreement, Madison Marquette is required to purchase the building for $4.5 million if it's unsuccessful in its redevelopment. The city would have to sell or develop the other two properties to recoup its remaining $4 million investment.

Rob Acker, who heads the project for Madison Marquette, is confident the project can be a success.

"We want to look at the components we know work downtown - food and beverage, entertainment, residential," he said. A revised plan may be unveiled in coming months.

Economic development task force: A group headed by Fifth Third Bank CEO George Schaefer and City Manager Valerie Lemmie is studying ways to cut red tape and enhance city incentives to attract businesses.

Residential development: Several large apartment projects opened on downtown's eastern side last year, including the 117-unit Power Building on Eighth Street and the 105-unit renovation of the former Krippendorf building.

In 2003, more than 300 apartments and condominium units are to be built or renovated downtown and in the adjoining neighborhoods of Over-the-Rhine, West End and East End.

Albert B. Sabin Cincinnati Convention Center: Design and engineering work has already started on a $145 million expansion of the Fifth Street venue, to be renamed Cinergy Convention Center when completed in 2006.

It will add about 60 percent more meeting and exhibit space, yet the overall center will be much smaller than a $325 million plan originally floated.

Tourism officials and hotel operators say the expansion is crucial to bolstering the area's convention business, which generated $188 million in 2002.

Focus of hopes

But it's the development plan that has political and civic leaders hopeful that downtown can pull out of its funk in 2003. It includes both a market analysis and a land-use plan.

The Greater Cincinnati Chamber of Commerce, the Greater Cincinnati Foundation, DCI and the elite CEO group Cincinnati Business Committee have helped to fund the plan with the city. They hope to agree on one clear vision for downtown.

Downtown's "2000 Plan" was adopted in 1982 and has been updated several times, and civic leaders sponsored a sprawling communitywide "vision" process in 1993 and 1994.And although DCI has written strategies for different parts of downtown, there has been no comprehensive strategy for more than a decade.

"To my knowledge, that's the first time those four organizations have recognized a sense of urgency about the future of downtown," Mr. Bortz said.

Some early observations from the downtown consultant:

There's little need or demand to build more office space

Shops that are unique to the region can be successful. However, enclosed malls, such as Tower Place, are generally a poor fit for downtown shopping.

National experts said Cincinnati, with the downtown Lazarus and Tower Place, actually is in better shape than many of its peers.

"There are a lot of cities that size that don't even have a department store anymore," Mr. Feehan said. Examples include Dayton, Louisville and Cleveland.

Still, there have been struggles here. Tower Place, which opened in 1991, has kept tenants with difficulty.

"Our downtown has suffered from the overall economic decline," said Ms. Moertl, the city's community development director.

Unique to Cincinnati?

But Closson's president Mr. Darwish said it was more than that. He echoed the concerns of many business owners that there is no single point of contact, either inside or outside of City Hall, that has proven effective.

"Part of our frustration was not knowing who to talk to for a response," Mr. Darwish said of the store's requests for help, which started 16 months ago.

The city studied a $24 million plan to relocate a Tower Place garage parking ramp, which now wraps around the store's Fourth Street facade, shielding it from view. But it was too costly.

DCI completed an unflinching self-review last year and has reorganized with an emphasis on providing basic services, such as promoting a clean and safe downtown.

Past development efforts may have concentrated too much on blockbuster projects, such as the $48.7 million incentive package for Nordstrom's. But "there are no silver bullets," Mr. Ginsburg said.

A better approach might be letting the market determine what works downtown. "Not every business is going to be economically viable forever," he said.

Downtown does have some advantages. Mr. Elkus said the rent is less than what he would have to pay in Hyde Park or at the Rookwood development in Norwood.

And downtown provides an urban environment that better fits his target customer, said Mr. Elkus, whose father and uncle ran men's clothing stores here.

"If I had to rely solely on foot traffic, I wouldn't locate downtown," he said. "But I think downtown still has that urban feel. ... I looked at sites in Hyde Park, but I just felt it was a little bit too traditional."

Mr. Ginsburg said downtowns, with their older buildings, shops, apartments and entertainment options, have something not found in the suburbs. Taking advantage of those assets must be a priority.

"Districts change over time as markets change," he said. "Downtowns do have that unique ability to reinvent themselves."

E-mail cpeale@enquirer.com or kalltucker@enquirer.com