By Ken Alltucker
Enquirer staff writer

Fourth Street in the heart of downtown has long been Cincinnati's hub of retail and commerce. But developers are betting that many will want to live along the bustling street, too.

Development firms are working to transform the long-vacant McAlpin's store and the nearby Fourth National Bank building into luxury condos.

Some real estate analysts see the street's collection of older office buildings as prime candidates for apartment or condominium conversion.

The exterior of 18 East Fourth St., downtown. (Meggan Booker photo)

"Just 10 years ago, nobody would have believed these conversions would take place on Fourth Street," said Bill Schneller, a CB Richard Ellis broker.

"People didn't live downtown, other than in a few apartment buildings. But the trend seems really strong," he said.

The rush to build condos on Fourth Street and along other pockets of downtown is driven in part by the economics of real estate.

Older office buildings rich with architectural touches such as the Fourth National Bank building can no longer fetch lucrative rental rates as businesses gravitate to more modern, amenity-rich office buildings. Developers and property owners see retooling old office buildings as apartments or condos as a way to make more money.

Within walking distance

But just as important is the lifestyle of city living embraced by young professionals, empty nesters and others. Residents are seeking a home within walking distance of restaurants, shops, museums and theaters.

A December 2003 survey commissioned by Downtown Cincinnati Inc. showed condo projects under construction or planned would add nearly 300 units to downtown and Over-the-Rhine's existing 108 for-purchase homes.

Conversion also is a hot trend for other types of downtown properties, such as factories and hotels.

Miller Valentine Group is building 110 condos at the Polk building on Pike Street between Fourth and Fifth streets. The five-story Fort Washington Hotel at 621 Main St. is being converted to 10 condos.

Faced with lukewarm demand for downtown hotel rooms, the owners of Sixth Street's Crowne Plaza Hotel last week unveiled a plan to transform the 321-room hotel to a sleeker boutique hotel with 76 loft-style condos, town houses and penthouses. The building will be renamed Next Hotel and Residences, and its facade will be rebuilt with a glass exterior.

"It is much more of a hip, cool, trendy type concept," said Greg Kaylor, the Crowne Plaza's general manager.

Owners of the former Fourth National Bank building at 18 E. Fourth St. closed the office building in September 2000. At the time, less than one-quarter of the 12-story office building was occupied by businesses. The few tenants were paying rents of less than $6 per square foot, compared with the typical downtown office rental rate of about $15 per square foot. Heating bills, maintenance and other operating costs exceeded the amount of rental money the building generated, the owners said.

But JFP Properties envisioned new life for the century-old building when it purchased the property in February 2003.

A nice blend

"Fourth Street is the most aesthetically appealing street in the city," said Joseph Straka, of JFP Properties. "The architecture is historic, and that is something that is very appealing to the consumer market. It is an extremely safe (area), much more so than Over-the-Rhine or other areas of downtown."

JFP worked to secure parking spots beneath the Westin Hotel south of Fountain Square, and it also spent months deciding on the right mix of condo size and price. JFP scrapped earlier plans to build just one unit per floor and charge prices up to $1.25 million. It also nixed a strategy to sell units on a rent-to-own basis.

Now, Straka said, buyers have signed contracts on more than 60 percent of the building's 22 units. Base prices range from $225,000 to $390,000.

Jeff Jacobs, chief executive officer of JFP Properties, said at first he was skeptical about the prospect of building condos on a street better known for shopping with landmark stores such as Closson's, Bromwell's and McAlpin's.

Two of those Fourth Street retail landmarks have closed over the past decade, and Bromwell's is seeking a buyer.

"We thought it might have been a little harder to get people interested in Fourth Street," said Jacobs. "But it really hasn't been."

'A lot of inquiries'

JFP Properties also will team with Madison Marquette to convert the vacant McAlpin's store into a 64-unit condo project with street-level retail space. Cincinnati City Council last month approved a plan to sell the McAlpin's building and the abutting Newstedt-Loring-Andrews building to developers for $4 million. Straka said construction will start soon, and units are scheduled to be built by December 2005.

Michael Sweeney, who owns and manages a Comey & Shepherd office in Over-the-Rhine, has been hired to sell McAlpin's condos.

"We have a lot of inquiries," Sweeney said. "There's a nice blend of business and home ownership on Fourth Street."

Schneller, the real estate broker, envisions even more residential development on Fourth Street and elsewhere downtown. He's attempting to sell the Ingalls office building at the northeast corner of Fourth and Vine streets above Brueggers Bagel Bakery. Though several residential developers have asked about the property, nobody has agreed to pay the $3.2 million asking price.

Downtown's largest condo development, the Polk Building, is scheduled to be completed in the fall of 2005. So far, 52 of 110 units have sold, and another 10 buyers are ready to sign contracts, according to Christine Schoonover of Huff Realty.

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E-mail kalltucker@enquirer.com