NewsLocal NewsHamilton CountyCincinnatiDowntown

Actions

Despite streetcar squabble, Fourth and Race redevelopment is a go

Posted: 4:20 PM, Sep 12, 2018
Updated: 2018-09-13 11:28:55Z

CINCINNATI -- A gaping hole in the Downtown landscape is set to be filled after City Council approved roughly $9.5 million in subsidies toward a long-awaited mixed-use development at the corner of Fourth and Race streets.

But the council's approval did not come without some back and forth, and -- as is becoming more and more common -- the debate circulated around the streetcar.

In addition to the city subsidy, the developer -- Indianapolis-based Flaherty & Collins -- will enter into a financing agreement with the Port Authority, which will own the 14-story mixed-use tower. The tower will include 22,000 square feet of retail space, 264 residential units and a 574-space parking garage. The Port will then lease the property to the developer.

This will allow the developer to avoid paying sales taxes on more than $5 million in construction materials.

Some dissent toward the project surfaced during Monday's Budget and Finance Committee meeting, when Council members Chris Seelbach, P.G. Sittenfeld and Wendell Young voted down the proposed development project.

The three voices of opposition initially rejected the proposal because the developer chose not to opt into the voluntary tax incentive contribution agreement -- often referred to by its acronym, "VTICA" -- that helps fund streetcar operations.

Since construction began on the streetcar, dozens of Downtown developers have agreed to contribute to the VTICA fund.

Flaherty & Collins' choice to opt out did not sit well with Seelbach.

"For a company that's asking for $9 million, building a garage owned by the Port (Authority) so they don't have to pay taxes, and then to say, 'We're not going to pay the VTICA, and we won't find a way to make it work,' is just unacceptable for me," Seelbach said Monday.

"There's a way to make it work."

Nevertheless, the project will move forward after Wednesday's full council meeting, when Mayor John Cranley expressed surprise over the comments made two days earlier.

"I was very confused by the discussion I heard in committee with the idea that this deal is only going to get a 5-4 vote in order to extract money for the streetcar," he told the council. "My memory was that the streetcar was meant to spur development."

As the votes were cast Wednesday, the council unanimously passed the $9.5 million in subsidies and passed the 15-year tax exemption 7-2, with Seelbach and Sittenfeld casting the two "no" votes.

Sittenfeld explained his final decision to support the project overall: "Today this is an imperative, but there are extenuating circumstances," he said, referring to the council's and Downtown residents' urgency in redeveloping the vacant lot.

WCPO previously spoke with Fourth Street resident Dennis Chastang , who said the area doesn't feel whole since the city-owned Pogue's Garage -- which previously occupied the lot -- was demolished in 2016 .

"It's really cut down on the foot traffic," he said. "I feel like I live outside of the main city, and I'm a block from the city center."

Jeff McClorey -- owner of Fourth Street home goods retailer Bromwell's -- threatened a lawsuit if the city delayed the Fourth and Race project any further, saying any progress on the project is better than none at all.

"We were 'pregnant,' as they say," he told WCPO in June. "And we said, 'Fine, we'll take that.'" 

The city first signed a deal with Flaherty & Collins in July 2016, but that deal was killed in June of this year, due to the developer's inability to finance the project alone.

The city estimates the development will create 91 permanent jobs and 36 temporary construction jobs as well as provide $90,500 in annual tax revenue over the course of construction.

Pat LaFleur reports on transportation and mobility for WCPO. Connect with him on Twitter ( @pat_laFleur ) and on Facebook.