The Dayton Arcade developers are thinking “small” for the second phase of their massive rehab plans.
They propose creating tiny living spaces and “curated, small” dining options for a portion of the arcade complex closest to East Third Street, according to documents submitted to the state.
Local officials said they should know by the end of the year whether the arcade project will move forward. The community has waited for more than 25 years for something positive to happen to the arcade.
The group working to redevelop the Dayton Arcade has asked for $4 million more in state historic tax incentives to help finance a second phase of the project that expands its living and dining options.
The developers say the historic tax credits would help rehab two more of the complex’s buildings, creating 32 new apartments, most of which would be “micro units” that are intended to be affordable for students and young professionals, according to the group’s application for tax credits.
The arcade won $5 million in state historic tax credits over the summer, and the development group has amassed tens of millions of dollars of tax incentives.
But officials still say they have not secured all of the needed financing yet, and the project requires another $4 million in historic incentives. Overall, the second phase of the project is expected to cost about $40 million.
The new apartments and micro units would be located in the upper floors of the Third Street Arcade (floors 3 to 5) and Gibbons Annex buildings, both of which are five stories.
The Third Street Arcade building has a two-story, sky-lit retail arcade, and its facade is the striking entryway on the first block of East Third Street, located next to the Stop-N-Save Foods and across from Courthouse Square.
Developers also propose filling up the Third Street Arcade building’s ground-floor spaces with “Stir It Up,” a collection of pop-up restaurants, according to the tax credit application.
The second floor of the Third Street Arcade building and the Gibbons Annex will be occupied by a single, unidentified office tenant, the application states.
The first phase of the project seeks to create affordable housing for artists and creative types, as well as an “innovation hub” that houses The Entrepreneurs Center, the University of Dayton Center for Entrepreneurship and some faculty, staff and start-up companies, venture capital organizations and other business partners and groups.
The hub will occupy all three floors of the arcade complex’s McCrory Building, which has a three-story, white terra cotta facing east on South Main Street.
When finished, the arcade complex is expected to house 405 high-quality, permanent jobs, developers say.