The renewal of the Dayton Arcade is hitting its stride, with developer Cross Street Partners a month away from closing on $96 million in public tax credits — and a projected opening of the project’s first phase in the early spring of 2020.
“We’re very close,” said David Williams, Arcade project manager for Cross Street and a veteran of Miller-Valentine Group and CityWide Development in Dayton.
Williams spoke Friday to a sold-out Dayton Area Chamber of Commerce breakfast audience at the Dayton Club, painting a picture of a development effort getting closer to the finish line with each passing day.
This week, Baltimore-based Cross Street announced the $1.3 million purchase of the historic Benjamin F. Kuhns building, marking the company’s control of what are considered all nine of the Arcade buildings.
Dayton government participated in the title transfer of the Kuhns building in order for the development to qualify for tax increment financing.
“We’re knee-deep in it,” Williams told his standing-room-only audience. “We own all nine buildings now.”
Tax credits and assistance are crucial to the project. In all, the project is eyeing a capital stack of $96 million, which includes $36.5 million in New Market tax credits, $25 million in state and federal tax credits, $22 million in housing tax credits and more.
PACE (property assessed clean energy) financing is also in play, as are a $10 million loan from the city of Dayton, $1.2 million in Montgomery County ED/GE development help, a $900,000 JobsOhio grant and more.
Much of the credits and assistance are in place, although some elements not completely finalized, Williams cautioned. For example, with JobsOhio, a term sheet is still in process.
“It’s not over until it’s over,” Williams said.
The Arcade consists of nine buildings, totaling more than 300,000 square feet, with much of that space under a roof and classic rotunda, which is now being prepped for new paint and glass.
The 115-year-old site was shut down completely in 1993, although occupant Arcade Seafood continued for a time.
The goal today is to prepare 100,000 square feet of South Arcade space, welcoming 110 affordable-housing units, retail and restaurants, business incubators, a University of Dayton innovation center, fine arts space and much more.
“What we’re really trying to do is write the next chapter” of the Arcade, Williams said.
Conventional private financing is not necessary to the project, although the five companies involved in the redevelopment are bringing crucial equity to the effort, he said.
The project is expected to unfold in phases, with the second phase, the Third Street Arcade, featuring a culinary and kitchen incubator program, complimentary retail and restaurant space for incubator participants, creative space and affordable “micro-loft” apartments.