Austin Landing draws first out-of-market office tenant

Austin Landing has hit a new milestone, attracting the first out-of-state business to the office park south of Dayton.

With more than 300,000 square feet of office space almost full and the shops and restaurants almost all built out for the first phase, there are now about 2,600 people employed at Austin Landing and more than $100 million in property value has been created.

But the success of the 142-acre development has not been without controversy. It’s accused of helping gut downtown Dayton and shifting businesses from around the region to its office center instead of attracting more businesses to the area.

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Officials with the township and Austin Landing said the development filled a demand for new office with modern layouts and helped retain jobs that might otherwise have left the area, drawn to similar centers in Greene or Butler counties.

“We understand the discussions and concerns,” Chris Snyder, Miami Twp. community development director, said. “We’re certainly not trying to pull people’s businesses away, but we’re certainly glad to have been able to keep them in Montgomery County in our community.”

Larry Dillin, president of VisCap Development, said Austin Landing has become “a regional connecting point” to population centers in the north and south and the surrounding area was underserved both from an office perspective and retail and restaurants.

“The goal is to make a difference growing the Greater Dayton region. Great cities are made up of a collection of great communities. We believe (Austin Landing) contributes to the rise of the region,” he said.

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When it comes to trying to attract an out-of-region tenant, Dillin said leasing office space is different than retail.

“Office use has different drawing drivers. Quality of life and convenience to amenities like restaurants and services-oriented retail are important characteristics for companies looking to recruit or relocate important staff positions,” he said.

SMITH, a Seattle-based digital commerce company, is aiming to open a 4,500-square-foot office in Progress Park Tower late December or early January, and will be the firm's first office in Ohio.

CEO Tony Steel said when the company was looking for the right space, the location was a good fit to recruit the kind of tech talent it wants.

“There were many different choices, but quite honestly Austin Landing was probably the most consistent with our brand,” Steel said. “We’re all about building for the future. We’re all about giving the greatest experience. We liked the environment at Austin Landing and the all inclusive-set of services that it provided.”

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It wasn’t a given that Austin Landing would have the success it has had attracting a steady line up of professional office tenants. Austin Landing’s original developer RG Properties took a gamble when it first pieced together while the region was still in a recession.

The development aided by limited other local newly built office competing, as well as the township investing $24 million into the project and then another $5.9 million.

The development also had the help of an attractive tax structure for office tenants where only first floor tenants, mostly retail, pay income taxes and upper floor tenants, mostly business offices, do not pay income taxes.

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Dayton has a 2.5 percent income tax, after raising the rate last year from 2.25 percent in what was the city’s first income tax hike in more than 30 years.

From its early days, Austin Landing has continued to bring in businesses that had been in Dayton, particularly from its downtown, taking with them the city income taxes that their employees had paid.

Midmark, a medical equipment company, just announced it is moving its headquarters from Dayton to Austin Landing.

Brady Ware, Clark Schaefer Hackett and Thomson Hine were also among companies who moved from Dayton to the new office center.

The Austin Landing offices let businesses be closer to the Cincinnati to help draw talent in from the south.

Dave Dickerson, Dayton market president at Miller-Valentine Group, which represented SMITH in its lease deal at Austin Landing, said companies that are planning to move are often looking for new office with modern layouts and enough space on each floor for companies to fit more staff on the same floor, which Austin Landing provided.

RELATED: Midmark Corp. moving headquarters from Dayton

“What you’re seeing from a lot of companies is that they like to be strategically between Dayton and Cincinnati and can tap into both labor markets, and in many cases don’t want to have multiple offices in both markets,” Dickerson said.

Dickerson noted that when Dayton got a new office option recently at the Water Street District, while it wasn’t wasn’t closer to Cincinnati, it had new layouts and quickly filled up.

“The office market over the last few years has been very competitive,” said Sandy Gudorf, president of the Downtown Dayton Partnership. “There has been a great deal of new office product on the market not only at Austin Landing but other places in our community.”

But, as Austin Landing has filled with tenants, downtown has also been coming into its own.

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The vacancy rate remains high — hovering between 27 percent and 31 percent depending on the report — but its added shops, restaurants and housing and has been carving out a niche with creative firms, startups, and companies looking for unique space that fits into their culture.

While both Austin Landing and downtown are billed as “live, work, play” environments, downtown advocates proposition the city’s center as the authentic option.

“We acknowledged certain years ago that we needed to take certain steps that we need to be competitive, whether with Austin Landing or something else. … I think as a downtown community, we have strengthened our value proposition,” Gudorf said.

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