But the chief executive and a fellow executive at Miller-Valentine each stressed their commitment to the project in an interview this week, both saying they support the arcade and will continue with the work of commercial leasing and raising capital there.
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Dave Dickerson, Dayton market president for Miller-Valentine, said the commercial tenants the company has brought to the project this far — Boston Stoker, Warped Wing and the University of Dayton — remain on board.
And they’re talking with further tenants as well, he said.
Though previous proposals to revitalize the arcade fizzled out, Cross Street Partners has never had a project progress to this point and not finish, said Bill Struever, principal of Cross Street Partners.
“We’re way too pregnant,” said Struever.
And two big players in urban redevelopment — Cincinnati-based Model Group and St. Louis-based McCormack Baron Salazar — have signed on as partners on the arcade in the wake of Miller-Valentine’s withdrawal, and Struever says they are better suited for the work.
Model Group and McCormack Baron Salazar are “powerhouses” in tax credit investments and new market or historic reuse projects and each have extensive experience completing large and complicated projects, he said.
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“Things changed with Miller-Valentine — that’s unfortunate — but we rolled with it and we have a terrific team,” Struever said.
Elizabeth Mangan — who became Miller-Valentine CEO Jan. 1 — also revealed that Miller-Valentine recently sold its affordable housing division to MVAH Partners, founded by former Miller-Valentine partners Brian McGeady and Michael Riechman, who had been running the affordable housing division.
She said the sale of the housing division was unrelated to the company’s withdrawal from arcade housing work.
“It was all about facilitating a deeper focus on our core business and about facilitating growth for Miller-Valentine,” Mangan said.
She added: “We’re as excited as anyone to see the arcade come to fruition.”
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Dickerson said the arcade is a complicated project, considering its funding sources. But, he said, “I think everybody is making a great effort, with the Cross Street team, to pull this off.”
“I think long-term there will be a greater demand (for space at the Arcade) than will be available,” he said.
That said, this project isn’t a simple one, he added.
Miller-Valentine’s decision to pull out of the housing component has not significantly impacted the project, except the new partners’ are talking about expanding the arts component of the arcade and modifying the mix of units on the residential side, Struever said.
Model Group and McCormack Baron Salazar recently signed a joint venture agreement for the arcade, he said.
Model Group had a lead role in transforming the Over-the-Rhine neighborhood in Cincinnati from a riot-damaged wasteland, featuring vacant and crumbling buildings, into one of the hottest destinations in the Queen City.
In the 2000s, the company helped clean-up the neighborhood, which struggled with blight and crime, by restoring 73 historic buildings and creating 383 units of affordable, “high-quality” housing.
Since 2006, more than 175 new businesses have opened in the neighborhood.
Model Group’s investment in Over-the-Rhine is north of $200 million. The firm has completed more than $500 million in development in Ohio, Kentucky and Indiana.
The Model Group has been one of the most active historic tax credit developers and general contractors in the state the last 15 years, said Bobby Maly, principal of the firm.
McCormack Baron Salazar is a big national player in housing.
The firm has developed 195 projects in 46 cities in 26 states and U.S. Territories, including 21,290 housing units and 1.2 million square feet of commercial space, with development costs of $3.9 billion.
The company has completed 9 projects in Ohio, resulting in 928 apartment homes, at an investment of $165 million.
The Landing Apartments, located at 115 W. Monument Ave. in Dayton, was one of the projects.
The Landing, which opened in the 1990s, turned the downtown YMCA tower into about 59 apartments and added new townhouse apartments between West Monument and the Great Miami River. There are 233 apartments in total.
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