By Ken Alltucker
The Cincinnati Enquirer

A week after the city of Cincinnati approved a deal to build 25 Vine Street condos next to the Kroger garage, two major companies unveiled a $25 million project Tuesday that could add another 100 condos and several shops to Over-the-Rhine.

Western & Southern Financial Group and PNC Bank say a combination of new and renovated housing and commercial space along Vine, Walnut and Mercer streets could spur even more development in the neighborhood north of downtown.

The new owner-occupied homes in Over-the-Rhine also could be an important step for a neighborhood saddled with decades of poverty and crime.

Although Western-Southern has spent more than $2 million to acquire 29 parcels spread over two blocks, both companies cautioned that tough economic and marketing details must be worked out before construction of Mercer Commons starts.

A more detailed financial picture will emerge this summer after PNC Bank and Western & Southern's development arm, Eagle Realty Group, complete a financing, budget and market study. Developers expect to request financial help from the city and private interests to complete what would be Over-the-Rhine's largest new housing project in decades, said Tom Stapleton, Eagle senior vice president.

In recent days, Western & Southern and PNC Bank officials have shared their Over-the-Rhine vision in private meetings with Mayor Charlie Luken and the private Cincinnati Center City Development Corp.

Luken said Mercer Commons is the type of major housing project that could ripple through the neighborhood and encourage others to invest millions in new housing, shops and office space. He also expects it would combine with nearby planned projects, such as the Kroger garage condos and the relocated Art Academy, to drive development north up Vine Street.

"I want to help if we can," Luken said. "It's exactly what Over-the-Rhine needs. Obviously, the key question is what do they need from the city."

So far, the only request is that Cincinnati donate a city-owned lot near the intersection of Walnut and Mercer streets. Western & Southern has acquired other needed land, including the former Washing Well and Venus Club on Vine Street, Stapleton said. The insurance company also bought several Walnut Street properties once owned by Over-the-Rhine's largest low-income housing owner, Tom Denhart.

Last week, City Council voted to pay $2.5 million of the $7.6 million price tag to build 25 condos next to the city-financed, 950-space parking garage at Vine and Central Parkway. The development corporation's equity fund and the Cincinnati Development Fund, a consortium of local banks, agreed to fund the remainder of the project.

The city's contribution to the Kroger garage condos, however, leaves just $750,000 in a city fund dedicated exclusively to future Over-the-Rhine projects.

Luken concedes it could be difficult to find city cash.

"The cash, if there is any, would be something for me and council to consider," Luken said.

Stapleton emphasized that the development team would look to tap a wide range of financing options. One potential funding source could be the federal government's New Markets Tax Credit initiative - a program that rewards developers with tax breaks for investing in distressed communities.

Western & Southern CEO John Barrett and John Taylor, PNC Bank's president of Ohio and Kentucky, also discussed the planned development in recent days with 3CDC representatives.

"They are expecting the economics to be challenging," said Tom Blinn, the development corporation's interim director.

The project would include a combination of new construction and renovation of existing buildings, Stapleton said. Several shops also would be built along Vine Street.

Stapleton said the project might include some rental housing along Vine Street if the market study showed it were needed.

The developer expects to carve out enough space for 140 to 200 parking spaces, most located below the new buildings.

Architect glaserworks has been hired to design buildings that blend well with the neighborhood's historic structures. Eagle is seeking a general contractor to manage the construction.

Stapleton expects to build the plan in collaboration with community interests and others.

"A lot of this will work its way out in the public," Stapleton said.

As the city's former community development director, Peg Moertl watched in frustration over the slow pace of development following the racial unrest in Over-the-Rhine in April 2001.

Now as PNC Bank's community development executive in Greater Cincinnati, Moertl is optimistic about the latest proposal.

"I think it's incredible what it can do for the neighborhood," she said.

E-mail kalltucker@enquirer.com