By Ken Alltucker
The Cincinnati Enquirer

City Council's Finance Committee on Monday delayed a vote to spend $2.5 million to help build 25 condos next to Kroger's parking garage at Vine Street and Central Parkway in Over-the-Rhine.

Rendering of condo unit at the planned Kroger garage in OTR. (Provided)

Committee Chairman John Cranley told City Development Director Chad Munitz to figure out a plan that appeals to a majority of council members and the developer, Kimbler Interests/Al Neyer Inc. Cranley said he wants the new proposal ready for a possible vote next Monday.

"We've got nine council persons with 18 different opinions," Cranley said. And, "I want to avoid a surface parking lot at Vine and Central Parkway."

At issue is the cost and look of a proposed condo and retail project abutting the 950-space Kroger garage.

No council member is satisfied with the terms of a city-negotiated plan to subsidize the developer at $100,000 per condo unit with no profit return to the city. But none seems thrilled with the alternative - an asphalt parking lot at one of the city's busiest intersections.

Council approved a plan last year to spend up to $12 million to build a garage as part of a deal to keep Kroger downtown. Now, it's trying to hammer out a financing plan that would add a mix of shops and condos to dress up the garage and kick-start private development on Vine Street.

Over-the-Rhine business interests worry the garage's design clashes with the neighborhood's historic architecture. They also say it would drain $2 million from an Over-the-Rhine development fund, leaving just $750,000 for housing, retail and other projects. And most council members say the city is contributing too much money.

Councilman David Pepper's chief complaint is that the city is giving away money without the possibility of sharing in the profits if the condos sell for a higher price than expected.

As the deal is written, the city would donate $2.5 million with no expectation of getting any money back directly.

Private funds of about $5 million come through two loans and donated land. The Cincinnati Development Fund would offer a $1.9 million loan, and the Cincinnati Equity Fund, which is controlled by the private development group Cincinnati Center City Development Corp. (3CDC), would approve a $2 million loan. Also, Kroger is donating nearly 1 acre valued at $860,000.

City development officials and 3CDC have said the Vine Street condos would spur further development.

Developer Rick Kimbler said the financial terms were assembled on the assumption that the condos would sell for an average price of $170,000. Money from the condo sales would first repay the development fund, then 3CDC's equity fund.

Kimbler described the deal as an aggressive move because lenders typically require a developer to sell up to half of a condo project's units before approving a construction loan. That would be a daunting task on Vine Street because of the area's reputation for crime, drugs and poverty.

Under the proposed terms, Kimbler would be able to start construction immediately.

But Pepper said the deal should change so the city could at least share the profits if the condos sell for a higher average price.

"To just throw in that money, to give it away without the likelihood of getting it back just doesn't make sense," Pepper said.

Councilman Jim Tarbell, an advocate of housing for middle- and upper-income families in predominately lower-income Over-the-Rhine, said he wants more shops instead of street-level condos on Vine Street.

He said Monday that the city should approve a plan that calls for condos above street-level retail space.

If the Kimbler/Al Neyer venture is unwilling to take on such a project, then the city should consider owning and leasing the retail space, Tarbell said.

Tarbell also urged a more elegant garage facade.

Vice Mayor Alicia Reece said she opposes the agreement because of the cost to the city, and she called for a "true accounting" of the city's contribution.

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E-mail kalltucker@enquirer.com