CINCINNATI — This marks the second holiday season in downtown Cincinnati without a Macy’s Department Store. Today, the three floors of the building show only glimpses of what used to fill the space: empty cosmetic counters, full-length mirrors and signage pointing to the nearest skywalk.
However, the prime location of the previous department store at Vine and West Fifth street across from Fountain Square is a major advantage, according to the Cincinnati Center City Development Corp., or 3CDC. They bought the building for $7.5 million earlier this year, and 3CDC expects to purchase the land from the city of Cincinnati for $1.
The bargain price allows the city to avoid paying property taxes on the land, as 3CDC moves forward with redevelopment of the 225,000-square-foot building. Those plans call for 200,000 square feet to be developed into Class A office space. The remaining 25,000 square feet will be street-level retail space.
3CDC plans to demolish much of the interior of the structure so potential tenants can configure the space as needed. The beginning demolition work began this week.
“I think we really view this city as one that’s on the rise, and we view this building as one that has potential to continue that momentum,” Joe Rudemiller, vice president of marketing and communications for 3CDC, said.
The Cincinnati Planning Commission is scheduled to consider the land sale during its Friday morning meeting. The city planning staff recommended approval of the plan.
Meanwhile, the land sale would also include the release of easements for the skywalk that crosses West Fifth Street and connects Fountain Place to the Carew Tower. Rudemiller said 3CDC has not determined whether to keep the skywalk or not.
Macy’s was the largest tenant of the complex known as Fountain Place, which also included the former Tiffany & Co., Palomino Restaurant and the current Booksellers on Fountain Square. The local book store is expected to close in January.
3CDC anticipates that the revitalized property, at an estimated investment of nearly $60 million, could have a major impact on downtown Cincinnati. Rudemiller said they are looking for a single tenant for the large office space with the potential to bring up to 1,500 workers into the central business district.
“If it’s 200,000 square feet, I mean that’s needed,” Peter Snow, executive director of Cushman & Wakefield, a global commercial real estate firm with an office in downtown Cincinnati, said.
Snow said there’s been a shift in the last few years in the availability of office space in downtown Cincinnati. The largest recent office development was Queen City Square, home to Great American Tower, which opened in 2011.
With many building owners converting older Class B office space into hotels and residential units, Snow said several displaced tenants moved into higher-quality and more expensive Class A office space downtown. That has left larger companies that want to move to downtown Cincinnati with fewer choices.
“There are some big names in the market right now looking for space and they’ve said, ‘Hey, we want to be in Cincinnati,’” Snow said. “And, right now, the only options are new construction.”
According to Snow, the office vacancy rate in the central business district is around 13 percent. But he said about 14 percent of the available space is considered Class A.
“There’s really not a lot of, I would call, top-tier space available," Snow said. "If you’re a 30- to 40-thousand-square-foot office user looking for a premier space in town, you really can’t find it right now."
He said he believes the planned office space within the Fountain Place redevelopment will help. Meanwhile, the retail portion of the development is expected to attract additional foot traffic.
“We want something that creates a lot of activity, a lot of vibrancy. And, that’s really the main goal,” Rudemiller said. “Whether that’s a restaurant operator, or some type of retail shop.” He said there could be as many as five or six retailers occupying the street-level retail space.
“In terms of looking for tenants, we want to make sure that we’re very careful and cautious about who we bring in because it is such a critical corner,” Rudemiller said.
He also believes 3CDC’s track record in Over-the-Rhine will help guide how they approach the Fountain Place project.
“I think we would do the same thing down here in terms of looking at a smaller retail space," Rudemiller said. "Something that we feel confident would drive traffic, would be a draw, would be a reason that folks would want to come down."
So far, the project doesn’t have a completion date.