Vacancies hinder downtown’s renewal

Buyers’ plans have stalled, leaving thousands of square feet empty.

The top 10 developments in Greater Downtown Dayton

Out-of-town buyers of the historic Arcade building have stalled in their efforts to rehab one of downtown’s architectural jewels because they aren’t able to raise the $35 million estimated to do the job.

Staff Photo by Ty Greenlees Out-of-town buyers of the historic Arcade building have stalled in their efforts to rehab one of downtown’s architectural jewels because they aren’t able to raise the $35 million estimated to do the job.

Local developer Bob Shiffler is in a three-month struggle to save his Kuhns building from foreclosure and rescue the $5 million of his own capital spent on renovations.

Teesha McClam/Dayton Daily News Local developer Bob Shiffler is in a three-month struggle to save his Kuhns building from foreclosure and rescue the $5 million of his own capital spent on renovations.

The old KeyBank building (center) in downtown Dayton was purchased by Annamalai Annamalai, aka Dr. Commander Selvam for $525,000.

Staff Photo by Jim Noelker The old KeyBank building (center) in downtown Dayton was purchased by Annamalai Annamalai, aka Dr. Commander Selvam for $525,000.

ENLARGE PHOTO

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By Lucas Sullivan, Staff Writer Updated 10:40 AM Thursday, August 19, 2010

DAYTON — Local developer Bob Shiffler is in a three-month struggle to save his Kuhns building from foreclosure and rescue the $5 million of his own capital spent on renovations.

Out-of-town buyers of the historic Arcade building have stalled in their efforts to rehab one of downtown’s architectural jewels because they aren’t able to raise the $35 million estimated to do the job.

And just last week a controversial leader of the recently defunct Hindu Temple of Georgia, Annamalai Annamalai, aka Dr. Commander Selvam, bought the former Key Bank Building at 32 North Main Street for $525,000 and announced he has no plans for it.

All three projects are examples why redeveloping some of the 850,000 square feet of vacant downtown office space — the space of nearly two Kettering Towers — has been paralyzed over the last decade. It’s a story of out-of-town buyers gobbling up buildings without funds or plans to redevelop them and banks unwilling to provide loans for large projects.

“No one could foresee this economic disaster,” said Shiffler, who began rehabbing the Kuhns building before the foreclosure crisis led to bank bailouts. “There was a time you could borrow money for real estate projects, but now is not that time.”

The $75 million CareSource building and accompanying parking garage has been one of a few economic development projects downtown in the last 10 years, as most of the development has gone on outside the city’s core.

Meanwhile, nearly $1.5 billion has been poured into projects on the edge of downtown — from The Kroc Center and Tech Town to the expansion of Miami Valley Hospital and the University of Dayton campus.

City staff and those who lead nonprofits dedicated to economic development say lack of developers savvy on the ins and outs of tax credits and a lack of momentum has stunted core downtown redevelopment projects. The city desires more mixed-use of the empty space downtown — flipping some of the hundreds of thousands of square feet of vacant office space into residential housing for college students and young professionals.

“Other reasons, too, are that the market downtown is so depressed and we are in constant competition with the suburbs,” said Steve Budd, president of CityWide, the city’s quasi-private economic development engine. “Parking is also a big issue. I don’t talk to any (potential developer) that doesn’t talk about parking. Parking is free in most suburban areas. Downtown is a different story.”

Monument has seen large investment

If you follow the money, East Monument Avenue between North Main Street and Patterson Boulevard has become one of the most expensive stretches of real estate in the city.

More than $140 million (and counting) has been spent along the stretch of Monument and the Great Miami River to develop Fifth Third Field, Tech Town, CareSource and RiverScape.

Those developments, city officials say, provide good anchors for recreation along the river that authors of the Greater Downtown Dayton Plan hope spark the city’s renaissance.

The University of Dayton has spent nearly $70 million, the city estimates, on its expansion in the last decade, including a recent purchase of 50 acres of NCR’s former world headquarters, and has stabilized the areas of Brown and Stewart streets.

That along with Miami Valley Hospital’s $135 million Heart Tower and surrounding neighborhood revitalization has city officials hoping it will attract people from the suburbs and spark small business.

The city has also put a lot of faith in Tech Town, a job incubator working jointly with Wright-Patterson Air Force Base with a focus on sensory technology and aerospace development.

Authors of the Greater Downtown Plan recently called for 8,000 new jobs by 2020 in the area in and around downtown, with many of them hitched to small business born out of Tech Town. The city is banking on Tech Town’s success to connect it to various other amenities: Fifth Third Field, RiverScape, the Oregon District, UD, Brown Street and the bordering suburbs of Oakwood and Kettering.

The plan is to bring more people downtown and, if more housing is built, keeping them there, said John Gower, the city’s planning and community development director.

“You can’t underestimate how important Tech Town is to the city,” Commissioner Matt Joseph said. “Wright-Patt is our biggest employer and this is a partnership that can strengthen the region.”

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