The Dayton Arcade developers are on the verge of securing the financing they need to transform the southern portion of the complex into housing, offices and co-working, arts and event spaces and other uses, developers said Tuesday.
Developers Cross Street Partners and Miller-Valentine Group may be just weeks away from pulling together the last pieces of financing needed for a roughly $80 million rehab of a large section of the historic complex, said Bill Struever, principal of Maryland firm Cross Street Partners.
The redevelopment of the arcade will happen if the funding can be obtained, he said.
“We’re fast approaching that key point,” Struever said.
“We have a really meaningful economic development strategy for downtown,” said Dayton City Manager Shelley Dickstein.
Last week, the outlook for transforming the long vacant arcade brightened when the University of Dayton and The Entrepreneurs Center announced plans to jointly occupy more than 80,000 square feet of space in the massive, downtown complex.
UD and the Entrepreneurs Center plan to create an innovation hub where university students, faculty and staff interact and collaborate with entrepreneurs, start-ups, small businesses, researchers and other creative and talented professionals.
UD’s letter of intent to become a tenant in the arcade means developers have the leasing commitments needed to close on financing and move forward with renovating the southern parts of the interconnected buildings, Struever said.
That includes the rotunda and the Ludlow, Fourth Street, Kuhns, McCrory and commercial buildings, officials said.
“We are very close to having our funding pieces together,” Struever said.
The first phases of the rehab project are expected to cost about $80 million with all the various housing components, Struever said.
The arcade plans call for about 130 apartments for creative types and artists, most of which will be affordable housing but there also will be about 26 market-rate units.
The complex will have restaurants and retail, co-working office spaces, UD faculty and staff offices, event spaces, galleries, a kitchen incubator and a roughly 6,000-square-foot bistro, deli and grocer called Feelohs, developers said.
For initial phases of the rehab project, developers have already secured more than $21 million in low-income housing tax credits, $9.7 million in federal historic tax credits and $2.5 million in federal funds pledged by the city of Dayton, according to the developers’ application for state historic tax credits.
Developers also say they have more than $16.5 million committed in loans from PNC Bank. They are currently seeking $5 million in state historic tax credits, which they nearly won last year.
Developers have about three-quarters of the new market tax credits they need, Struever said.
Warped Wing Brew Co., Boston Stoker Coffee Co. and the Dayton Visual Arts Center have signed nonbinding letters of intent to occupy space in the complex.
Warped Wing is considering opening a second location where it would brew and serve beer. DVAC would make the arcade its headquarters, according to Struever.