Those behind redevelopment of the downtown Dayton Arcade are eyeing the next crucial piece of funding for the project: The awarding of Ohio historic tax credits.
Dave Williams, vice president for urban development at Miller Valentine, noted that the project did not win the credits in December. He expects an announcement from the Ohio Development Services Agency about the next set of awards in about three weeks.
“It’s a key ingredient for us,” Williams said after speaking Thursday at the I-70/75 Development Association’s annual summit at Sinclair Community College. “There’s no question in my mind.”
The project has won $22 million in affordable housing tax credits, and project principals feel good about prospects for federal historical tax credits. It also has $20 million in new market tax credits, while they’re pursuing still more, Williams said.
Developers are also looking at PACE (Property Assessed Clean Energy) financing and assistance from JobsOhio, the state’s private non-profit development arm.
But the state tax credits are key.
“If we don’t get the state historical tax credits, it will be a challenge,” Williams said. “We wish we had gotten them last time. What did that do? It pushed us back six months. Time kills deals.”
With the credits in hand, Miller Valentine and its Maryland partner in the project, Cross Street Partners, hope to start construction in the late fall.
Across the region, industrial properties are hot, while office and retail properties often struggle, Miller-Valentine executives said in another summit presentation.
“I’ve been doing this more 20 years, and I think these are the lowest industrial vacancies that I’ve seen,” said Gerry Smith, a senior vice president with Miller Valentine.
Leasing and sales prices are rising as industrial and distribution companies move in, absorbing existing properties and building new ones.
But Smith also cautioned that the sector may be leveling off, citing retail distribution hubs as Internet sales continue to pressure brick-and-mortar retail operations.
Changes in health care laws also call into question continued health care office development, said Steve Ireland, a Miller Valentine vice president. He said he was optimistic, but added: “I can’t predict in two years what it will look like.”
For all the talk about retail challenges, though, Miller Valentine’s Aaron Savino said today’s market is the most active he has seen in seven years, with particular strength seen in the South market, followed by East and downtown markets.
Like many others, he sees online sales “killing” retail. “It’s a complete paradigm shift,” Savino said.