By Ken Alltucker
The Cincinnati Enquirer

With two condo projects near the Aronoff Center and a Fourth Street apartment complex under construction, Middle Earth Properties has emerged as one of downtown's most prolific housing developers.

The Camp Washington-based firm started nearly a decade ago fixing up rental properties in neighborhoods such as Camp Washington and Over-the-Rhine, but now the firm's attention is squarely fixed downtown.

"The market for downtown housing has grown exponentially over the last three years," said Middle Earth partner Glenn Kukla. "I think we're a bit ahead of the curve."

Middle Earth's first downtown project - a five-unit condo building on West Fifth Street - sold quickly, fetching prices ranging from $199,500 to more than $400,000. Now the firm is tackling two other condo projects near the Aronoff as well as the 25-unit Kinsey Flats apartment complex with commercial space on Fourth Street. The firm also owns a 25-unit apartment building at 335 W. Fifth St.

Competing developers applaud the upstart firm's risk-taking in an otherwise staid, conservative market.

"They are the type of young developers who will sometimes take risks that us older, stick-in-the-mud types are more reluctant to take," said Arn Bortz, partner of Towne Properties, a major downtown developer.

Middle Earth's recent success with condos is no surprise to Downtown Cincinnati Inc.'s Kathy Schwab, who recently completed a study showing more and more young professionals and empty nesters are choosing to buy homes downtown or in surrounding neighborhoods such as Over-the-Rhine, West End and Mount Auburn.

"There's pent-up demand and a lack of product," said Schwab. "The development community understands there's a need to provide this kind of housing."

From 2000 through September 2002, the DCI study shows, more than 270 condos and single-family homes sold downtown and in surrounding neighborhoods at an average price that far exceeded the city overall. For instance, condos and homes in downtown and near-downtown neighborhoods sold at an average price of $229,101 in 2002 compared to $136,295 for the city overall.

While the study doesn't predict how many condos or single-family homes will be built downtown over the next few years, Schwab noted even larger projects are planned.

Schwab counts four major downtown condo projects for downtown, including a high-rise proposed by Al Neyer Inc. and North American Properties atop a city-funded $9.1 million parking garage at the block bordered by Seventh, Broadway, North and New streets. Also, Towne Properties is finalizing plans for 26 attached town homes at the base of Mount Adams, the initial phase of a development that could eventually bring several hundred new owner-occupied homes to a city with just a 38 percent home ownership rate.

But so far, most downtown homes have been built by smaller firms such as Middle Earth and JFP Properties, which sparked interest in downtown home ownership two years ago with a four-unit 911 Race St. condo project.

Kukla and partners Tim Voss, Jay Voss and Dion Pangallo are finishing a second condo project, Gibson Lofts, across from the Aronoff Center. All units sold with prices ranging from $215,000 to more than $600,000 depending on unit size and special touches.

Now Middle Earth is looking to test the depth of home ownership demand downtown with the 29-unit Lofts at Graydon Place on Sixth Street next to the new Lois and Richard Rosenthal Center for Contemporary Art.

Middle Earth originally planned to convert the building into apartments, but low interest rates and quick sales of other condo projects prompted them to take a chance. So far, 10 potential buyers have signed contracts, Kukla said.

"We've spent that last few years building a knowledge base of downtown and the mindset of its customers," Kukla said. "It's an up-and-coming neighborhood."

E-mail kalltucker@enquirer.com