CINCINNATI — The city of Cincinnati has entered a tax abatement agreement with an out-of-state developer to build housing in the old Macy’s office building downtown. Officials said the project will help transform the Central Business District by attracting investments that will spur even more growth in the city.
The project is led by New York-based Victrix Investments. It will bring more than 300 market-rate rental units to the 8th through the 21st floors with space for nearly 600 residents. The development will also bring almost 20,000 square feet of outdoor terrace space on the 8th floor.
"This is one of the most promising developments I've had an opportunity to vote on," City Council Member Greg Landsman said. This project is the first housing development the city deemed as having met the priorities outlined in the equitable development rubric Landsman put forward last year.
Monthly rent rates will range from $1,350 to $2,150 for studios, one-bedroom and 2-bedroom apartments. The total cost of the project is more than $70 million. Through attracting hundreds of residents and making new homes for those already in the Cincinnati area, city officials expect the development to significantly help boost population density. As a result, officials project the tax and consumer base will expand downtown.
"Census data shows us that in the last 10 years the city of Cincinnati has grown by a little over 12,000 residents. But we've actually decreased the number of housing units by 2,000,” City Council Member Liz Keating said. “So we, as our demand grows for housing units and our supplies lower, we need to continue to get more housing units online to make living here in Cincinnati more affordable for everyone."
In exchange for a 30-year tax abatement, Victrix will contribute funds to the operation and maintenance costs for the streetcar. The developer will also be paying almost $300,000 a year to Cincinnati Public Schools. That equates to more than $8 million over the course of the agreement.
"By granting abatements, it allows us to use the capital dollars that we have to invest in affordable housing projects," said City Council Member Reggie Harris. “When we think about ideal developments to go into our downtown, this deal checks all of the boxes.”
The project has been popular at city hall, getting unanimous votes of support Wednesday in city council and in the budget and finance committee on Monday.
"We want to attract investment to the city of Cincinnati. We have to for jobs, for housing, all of those things. But we want to do it in a balanced way where we're lifting up our local workers and our local businesses," Landsman said.
Supporters see the effort as a reversal of the urban renewal that wiped out thousands of people from the Central Business District in the mid-20th century. They also point out the project is well-suited for providing options for current, longtime residents and newcomers alike more space to work from home—options that make Cincinnati an even more competitive housing market against other cities.
"Those old class B and class C spaces that are not really productive for office work now can be converted to residential,” senior project executive of Urban Fast ForwardJohn Yung said. “What better way to help downtown revitalize than have more residents who may be working from home, may be working from co-working spaces in the future and de-emphasizing the traditional office."
Paul Sian, a real estate agent with United Real Estate Home Connections, echoed the benefits of the project expressed by Yung and officials. He also pointed out one consequence that residents and the administration likely will have to brace themselves for once tenants move into the building.
“The biggest issue that you'll see anywhere there's new development is the traffic. If you add more people down there some people are going to bring their cars there. That adds to higher parking demand,” Sian said. “Traffic is always an issue that kind of plays hand in hand when anytime you're looking at a population growth.”
Harris acknowledges that rising traffic is something the city will have to deal with. Still, he says the influx of residents coming to Seventh Street should be manageable, and that the city’s bus system is well-positioned to accommodate having more prospective riders in the area.
“This is right in line with SORTA rolling out their “Reinventing Metro” plan and increased, sort of reimagined bus lines for efficiency. So this is actually a really great project because it will overlap and coincide with more frequent bus routes and newer bus routes,” Harris said. He went on to say this development deal will make it possible for residents to forgo owning cars if they also work downtown, noting the proximity to their prime, everyday destinations.
With the agreement now in effect, contracts will be signed next to move the project forward.
Victrix declined WCPO’s request for comment on the project at this time, citing confidentiality concerns.
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Monique John covers gentrification for WCPO 9. She is part of our Report For America donor-supported journalism program. Read more about RFA here.
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