Dayton Arcade Partners LLC says this funding will help convert the long-vacant Centre City building at 40 S. Main St. into 200 apartments, and will help complete work on the Dayton Arcade.
The total project costs are expected to be nearly $140 million.
“This award is a unique funding opportunity that is geared towards large transformational projects in Ohio. Since its inception, it has only ever been awarded to projects in Columbus, Cincinnati, and Cleveland,” said Taylor Vogt, developer with Arcade District partner Model Group. This tax credit “was a critical component of the capital stack needed to push these next phases forward and to sustain the needed momentum to realize the broad vision of redevelopment in the Arcade District and continue to catalyze sustainable revitalization of downtown Dayton.”
The developers of the Water Street District in the northeast part of downtown have been awarded about $4.3 million in tax credits from the same state program.
This funding will help turn the massive former Mendelsons liquidation outlet building into 160 apartments, ground floor commercial space, office spaces and new parking.
The Ohio Tax Credit Authority on Monday approved $100 million in tax credit awards through the state’s Transformational Mixed-Use Development Program.
Eligible projects must have a “major economic impact on the site and surrounding area” and must include a combination of uses, such as retail, office, residential, recreational and structured parking, according to the Ohio Department of Development.
The Dayton Arcade Development District consists of multiple properties, spanning two blocks in downtown Dayton, says the Arcade Partners LLC’s application for tax credits.
The Dayton Arcade is a collection of nine buildings in the heart of downtown, between Third and Fourth streets, and between Main and Ludlow. The Centre City building is a vacant, 21-story office tower at the northeast corner of Fourth and Main, across the street from the Arcade complex.
The rehab of the Dayton Arcade began in April 2019, and the first phase of the project was completed in September 2021. That phase focused on the southern portion of the complex.
Work continues on the northern section of the Arcade property, which will be turned into a new hotel and a retail marketplace.
Tax credits will be used to help pay to finish the renovation of the southern and northern parts of the historic property, at a cost of more than $35 million, the application states.
The south Arcade development includes the expansion of the Hub, a new kitchen incubator and spaces for multiple restaurants and an artist collective, developers said.
The north Arcade will include a 94-bed Hilton Garden Inn, pop-up retail and the expansion of the Stop n’ Save grocery store.
However, the bulk of the incentives will be put toward a roughly $92 million overhaul of the Centre City building, which has proved to be a tough project over the years. Multiple developers have been awarded tax credits to reuse the building in the past 15 years, but none of them were successful.
Cross Street Partners and the Model Group are proposing to create 200 “mixed-income” apartments and 53,000 square feet of commercial retail and office space in the office tower, the application states.
The project also includes a $12.4 million renovation of the Air City parking garage, which is next door.
The Centre City could get a small business retail incubator on the first floor and more than 35,000 square feet of co-working space on the second and third floors, the application states.
More than half of the proposed apartments would be targeted toward community members whose income is below 80% of the area median income.
The Arcade district’s $200 million revitalization will help rebuild the Dayton economy while creating a lively streetscape with a dense mix of uses, the application says.
The Arcade district hopefully will see additional phases of redevelopment, over the next three to 10 years, the developers say. The vision for the district is more than 1,000 housing units, 500,000 square feet of renovated office space and 200,000 square feet of retail space.
The goal would be to create more than 1,500 new jobs and $800 million in combined investment.
The Water Street District, which is around Day Air Ballpark where the Dayton Dragons play, has seen a flurry of new investment from developers Crawford Hoying and Woodard Development.
This duo has built hundreds of new apartments and two hotels and rehabbed old commercial buildings into residential units, offices and retail and restaurant spaces.
This team is renovating the Mendelsons building at 340 E. First St. into a mix of uses and amenities. The building has been renamed the Delco.
Their application says the tax credits will be used for the Delco project and will help close a financing gap.
The 515,000-square-foot structure will be turned into 160 market-rate rental units, 20,000 square feet of commercial space, 77,000 square feet of office space and 482 parking spaces.
The total development investment is expected to exceed $214 million, but the remaining investment to be completed is around $40 million.
“The completion of a renovation and the addition of both residential and commercial users into the neighborhood would be the largest step yet in the rebirth of this area of downtown Dayton, and a culmination of a vision started more than a decade ago,” their application states.