Wednesday, July 28, 2004

Languishing on the riverfront


Plans change to lure wary developers

By Ken Alltucker
Enquirer staff writer

There's a hole in the middle of Cincinnati's riverfront.

On the 15-acre site known as the Banks, surrounded by two new stadiums and a new museum, planners foresee a vibrant community of condos, offices and shops.

Instead, there's a collection of asphalt parking lots, dirt ditches and unfulfilled potential.

YOUR VOICE

But now, talks among the regional port authority, a private development group known as 3CDC, the city of Cincinnati and Hamilton County aim to resurrect interest.

The port and 3CDC are discussing changes in the 1999 plan to make the project more appealing to private developers. They're also talking with city and county leaders to find the money needed to kick-start the Banks.

Even diehard supporters acknowledge the difficulties ahead, including:

• Finding $54 million to $56 million for parking garages that will serve as the foundation of the Banks. That's in addition to the hundreds of millions of dollars the Banks' residential and commercial segments are expected to cost.

• Convincing developers that the project's many challenges - including a lack of money for garages, streets and the riverfront park - will be resolved.

• Reworking the original proposal's mix of retailing, offices and housing to overcome fears that the Banks might become a competitor, rather than a complement, to downtown.

"To make an investment like this, it really takes guts," said Norm Miller, a former port authority board member and director of University of Cincinnati's real-estate program. "We just haven't seen anybody who will step up and champion this."

Locating the funding

The Banks' biggest financial hurdle to date has been how to come up with $54 million to $56 million to build garages. The garages, built beneath eight blocks, will do more than provide 4,400-plus parking spaces for condos, apartments, shops and offices. The structures also are needed to lift new buildings out of the Ohio River flood plain.

Hamilton County initially planned to fund the garages through the half-cent sales-tax increase used to build stadiums for the Reds and Bengals. But sales-tax collections have trickled in more slowly than projected, and some are worried the county won't have enough money to pay debt on the stadiums, let alone the garages.

Sales-tax collections totaled $60.4 million in 2003 - $2.7 million less than projected. It was the fourth consecutive year sales-tax collection fell short.

"Right now our stadium fund is in desperate condition," said Phil Heimlich, a Hamilton County commissioner. "We're looking at years and years of red ink."

The port authority, though, believes $25 million in federal and state transportation grants will be enough to build two parking garages of about 1,000 spaces. That's at least a start to the Banks project, which ultimately will span eight blocks built atop the garages.

"I think everybody is guardedly optimistic that before we get to the end of this year, there will be some announcement on which blocks will move forward and how we plan to get there," said Jack Rouse, chairman of the Port of Greater Cincinnati Development Authority and Cincinnati Center City Development Corp.'s riverfront working group.

Another challenge has been more conceptual.

As efforts to reinvigorate the adjacent downtown area take shape, worries surfaced that the office and retail space planned for the Banks might poach downtown's core. But a proposal to spruce up Fountain Square and surrounding blocks may allay some of those fears.

"My major concern was Fountain Square be reaffirmed as the major hub of downtown," said consultant John Alschuler, who advises 3CDC. "The big difference now is there is already a terrific plan for Fountain Square that is moving ahead."

That means the revised Banks plan will have significantly fewer shops and office space than the original proposal of a half-million square feet of retail and up to 200,000 square feet of office.

"The retail has been cut in half - pretty much just ground-level boutique," Rouse said. "We're ever mindful of the fact that whatever we do is complementary to the Fountain Square plan."

Where to put parks?

Also getting fresh looks are where to build the first garages and how to incorporate park space.

Hamilton County wants garages built first on two blocks between the Freedom Center and Great American Ball Park, toward the eastern end of the tract. That plan also is favored by 3CDC, which is serving as development manager for the Banks.

"The eastern side would be most likely to start," said Stephen Leeper, chief executive of 3CDC. "If parking goes there, it can serve the CBD (central business district). A lot of the office buildings along Third Street could benefit from that parking."

The Cincinnati Parks department has $1 million to design a 37- to 50-acre park along the riverfront. Parks director Willie Carden Jr. said he expects a final design will be submitted to the park board for approval this fall.

The riverfront park - as well as a park being built at the Freedom Center - could play key roles in triggering the remaining Banks development.

Rouse said ideas include building small commercial attractions in the riverfront park - such as Tavern on the Green in New York's Central Park. Another change could include including more green space within the Banks blocks, Rouse said.

The park space also will be an important amenity for people who are looking to buy a condo or apartment building on the riverfront, Leeper said. "Having residential development next to a public park tends to make a better neighborhood," Leeper said.

On the watch list

Yet there are other challenges to be met before the Banks can start. The uncertainties include a lawsuit filed by Hamilton County contending the Paul Brown Stadium lease agreement favors the Bengals at taxpayer expense. And years of inactivity on the Banks plan has spawned a wait-and-see attitude among developers.

None of the three development teams selected two years ago as finalists for the Banks by the port authority - Lincoln Property Group/Phoenix Property Group, Madison Marquette/JPI and Sabbath Co./Towne Properties - has submitted development plans.

"There were a lot of unknowns that I think in the end they have tried to resolve and then resume the process," said Rob Acker, development director for Madison Marquette.

Privately, some developers viewed the original Banks plan as too costly and unrealistic. Among the chief points of worry was a requirement that developers pay for the roofs of the parking garages.

And some wonder whether riverfront condos or apartments will sell or rent for a high enough price to pay for all development costs. Many new housing developments in the downtown area have been subsidized by the city or state, but there has been no mention of such funds for the Banks.

"The question is if there is a market that's financially viable," Alschuler said. "Can you build the residential units at a price that the market will absorb?"

The port authority sent a letter to the three development teams last April acknowledging the Banks' problems.

Rouse said the current review will include a detailed look at all financing. Also, the port authority plans to re-examine its developer-selection process.

"We need to identify a short list of developers, or decide whether that changes," Rouse said. "I think we may look for some augmentation in some ways."

As development manager, 3CDC is expected to influence the process. The group's exact role and responsibilities likely will be outlined in contracts as the Banks progresses block by block. Any changes to the plan must be approved by the port authority's board.

Leeper, who supervised a similar big-ticket riverfront project in Pittsburgh, believes the Banks will fit well with a revitalized Fountain Square.

About 3.5 million people come to the riverfront each year to attend Reds and Bengals games or concerts. These riverfront visitors would spend more time and money downtown before or after riverfront events if there were more restaurants or entertainment options at or near Fountain Square, Leeper said.

Heimlich said he likes the possibility of giving private development interests more authority on shaping the Banks plan.

"You have to trust their judgment," said Heimlich. "That doesn't mean we give them a blank check."

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E-mail kalltucker@enquirer.com

the banks




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