By Gregory Korte
The Cincinnati Enquirer

Ending a squabble over city subsidies for condos planned next to the city-financed Kroger garage, City Council Wednesday voted 7-1 to invest $2.5 million in the project, handing proponents of redevelopment in Over-the-Rhine a major victory.

That vote could be a signal that the city's economic development apparatus is getting its act together, council members said.

Mayor Charlie Luken said it grew out of two reforms recommended by a blue-ribbon task force last year: creation of an economic development office answering directly to the city manager and establishment of a quasi-private development authority, the Cincinnati Center City Development Corp., known as 3CDC.

For 3CDC, Wednesday's vote cleared the way for its first brick-and-mortar victory. The group has targeted redevelopment of downtown Cincinnati, Over-the-Rhine and the Banks area along the Ohio River. The organization's next target is to revamp Fountain Square. Initial proposals are expected to be unveiled in the coming weeks.

City Manager Valerie Lemmie's administration first proposed including 25 units of housing next to the city-financed $12 million Kroger parking garage at Vine Street and Central Parkway. The garage is to be built as part of a deal to keep Kroger's headquarters in Cincinnati. City Development Director Chad Munitz spearheaded the condo project at City Hall.

The 25 condo units would be built by a private developer at a total cost of about $7.5 million. The city subsidy of $2.5 million breaks down to $100,000 per unit. The condos are expected to sell for about $170,000 each.

Some council members in recent weeks had said the subsidy was too high. However, economic development proponents argued the city's investment would reap dividends in the new residential and economic activity that would come to Over-the-Rhine because of the project.

"I think it was very important for 3CDC to get a win but just as important to show that we can work together," Luken said.

Lafley involved

Procter & Gamble CEO A.G. Lafley, chairman of 3CDC, became personally involved in the negotiations in recent days as council members debated a city subsidy for the condo development.

"I was more impressed by that than anything else - that someone of his stature would play so big of a role," said Councilman Jim Tarbell, who had been critical of the project's design and its lack of retail space.

"This is a huge project, and on any project of this magnitude, there's going to be an upside and a downside," Tarbell said. "It's absolutely important at this time - symbolically and strategically - to get this done."

Theater staying

The project will create a short-term parking crunch for the Ensemble Theater of Cincinnati, which uses the currently vacant lot for parking. The Ensemble is expected to announce today that it will stay in Cincinnati - abandoning its study of a move to Covington.

The theater will provide valet parking until the project is completed, Luken said.

E-mail gkorte@enquirer.com