The funding will assist a development group with converting the arcade into a 400,000 square feet mixed-use development, offering housing, offices and commercial space.
The arcade's planned innovation hub is expected to cost about $58 million. The arcade's overhaul could exceed $90 million.
"We are getting closer and closer," Dayton Mayor Nan Whaley said.
The project isn't successful until it reaches a closing, but that day is drawing nearer, she said.
"Again, this is the closest we've ever been on this project, and we feel really optimistic," she said.
INITIAL REPORT (May 11)
A committee responsible for recommending key Montgomery County development spending agreed that the city of Dayton’s push to make the Arcade a viable commercial center should get the full $500,000 that city government requested.
Twice a year, Montgomery County makes available Economic Development/Government Equity (ED/GE) funds to support businesses moving to or within the county. Municipalities apply for the funds, an advisory committee considers the applications and makes recommendations, and county commissioners get the final say.
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For the spring 2018 funding round, seven projects sought a total of $1.14 million, projects that applicants said would create a total of 538 new jobs while protecting 221 current jobs. Just over $2 million was available — but that amount also has to cover the fall 2018 funding round, too.
The biggest project in the spring round was the city’s Arcade effort. City planners believe Arcade development could lead to an estimated 426 new jobs in downtown Dayton.
The city had previously sought funding in the fall 2017 funding round before withdrawing its application, hoping to refine it further.
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Last year, the city had sought $1 million.
“We already gave ourselves a haircut on the last (funding) round,” Ford Weber, the city of Dayton’s development director, told fellow ED/GE Advisory Committee members in a meeting Friday morning.
Chris Kershner, executive vice president for the Dayton Area Chamber of Commerce, called the Arcade effort “a catalytic project that will transform downtown Dayton.”
Since early 2016, the city has worked with Baltimore-based Cross Street Partners in an effort to make the historic Arcade a core location for living, work and entertainment.
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Key tenants such as Boston Stoker, Warped Wing and the University of Dayton have committed to the site and Bill Struever, principal of Cross Street Partners, has expressed confidence that the project will reach completion. (A message seeking comment was left for Struever.)
Two big players in urban redevelopment — Cincinnati-based Model Group and St. Louis-based McCormack Baron Salazar — signed on earlier this year as partners in the Arcade work after Dayton developer Miller-Valentine withdrew.
“It seems like a natural fit” for ED/GE approval, Kershner said Friday.
County commissioners will vote on the recommendations Tuesday.
Also recommended for commission approval:
A distribution project in Trotwood with an as-yet unnamed company behind it was voted to be fully funded at $250,000. “Project Timber” will create 35 new distribution jobs, Trotwood’s application says.
Kershner spoke on that project’s behalf, saying: “This is an area of town that has felt some pain.”
Toolmaker Dynamic Machine Works is willing to move from Eaton to Englewood, moving two jobs and hiring six to ten new employees in the next three years, according to Englewood’s ED/GE application. The committee recommended fully funding that move at $50,000.
The city of Union was recommended for $132,000 of a requested $154,000 to to assist Belevin Corp. moving from Darke County to Union. In its application, Union said the move will create 20 new jobs within three years.
A project in Vandalia — Sand Lake Property LLC, an affiliate of Dayton Freight Lines — was recommended to get $58,000 of a requested $75,000.
And projects in Harrison Twp. and New Lebanon were each recommended for $40,000.
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