Nearly four years of work culminated last week in developers closing on about $90 million in financing to rehab the Dayton Arcade — a long-anticipated moment that was was greeted by cheers and praise from many in the community.
Developers, city leaders and other partners and contributors to the project on Monday gathered inside the arcade’s iconic rotunda to celebrate the closing and reflect on the work to get to this point on the journey to reopen the arcade for the first time since 1991.
There were many “near-death” moments, when the arcade project came dangerously close to falling apart, said Bill Struever, principal of Cross Street Partners, the lead developer.
But the project is funded, and construction gets underway almost immediately: On Monday, replacement glass for the rotunda’s dome arrived in three truckloads, and hundreds of glass panels will be switched out starting soon.
On Monday, more than 100 attended the celebration event.
Dayton City Manager Shelley Dickstein got choked up while making her remarks. Dickstein, who joined the city in 1996, has a background in economic development.
After closing 28 years ago, the historic arcade will see new life, which at one time seemed like an impossible dream, she said.
“Clearly, this redevelopment effort was no easy feat,” she said.
This sentiment was echoed throughout the comments made by the 19 speakers, who included local elected officials, school officials, economic development leaders and developers and financial supporters.
Multiple people said the arcade project is the most complicated project they have have ever worked on and the most complicated in the city’s history. Dickstein said the deal has the most complex financing structure of its kind.
Speakers said many people deserve credit for reaching the financial closing and putting the arcade on the path to rebirth.
The project would not be possible without the Arcade Innovation Hub, which is the complex’s anchor tenant and a joint venture between the University of Dayton and the Entrepreneurs Center, city officials and developers said.
The project is UD’s largest investment downtown in the school’s history.
“Nowhere have I seen a place knocked as hard as Dayton over a period of two decades, but still maintained a sense of optimism and, importantly, a willingness to collaborate, to work together to make things happen,” said UD President Eric Spina.
The project is relying on a large, diverse financing stack that includes New Market Tax Credits, state and federal historic tax credits, low-income housing credits, clean energy assessment financing, private equity and government loans and contributions.
The arcade project was nearly derailed multiple times largely because of financing and other challenges
The project originally failed to win tax credits. One of the original development partners withdrew from the project. One of the lenders backed out.
But the project ended up winning more state historic tax credits than any Dayton project before it. Two new development partners came aboard (McCormack Baron Salazar and Model Group). A different lender emerged.
Despite many setbacks, the development team kept the project on track.
“So I hope that you’ve gotten a little bit of the spirit of what it took from all kinds of folks from lots of different places to make the arcade come back to life,” said Struever, with Cross Street Partners. “Some say it takes a village — in this case it took a city, it took a state.