A development partnership that has purchased commercial buildings on East Third Street downtown for a planned entertainment district is under contract to buy the former site of the Dayton Daily News building at Fourth and Ludlow streets.
Developers Scott Gibson and Elliot Katz said Wednesday they are in the middle of a 90-day agreement with Student Suites LLC that could result in purchase of that property. They offered few details about what they intend to build as part of a redevelopment.
“At this point in time, everything looks positive,” Katz said. “But we are checking everything about it and determining its feasibility. It looks positive.”
The two are midway through a review that Gibson said also includes assuring financing for the project.
“We are looking at the capital aspects of the project and some legal aspects and that is getting underway here too,” he said.
The entire development site at Fourth and Ludlow streets is two acres. Most of the site, including the former Dayton Daily News building, is owned by Student Suites LLC.
A redevelopment project there for an $18 million student housing complex has been mired in financing and other problems for two years, including a hangup with the U.S. Department of Housing and Urban Development over a longstanding lien. The lien applies to the part of the site owned by the city.
Aaron Sorrell, Director of Planning and Community Development for the city, said the developers also would like to incorporate and purchase the city-owned property as well.
“They have to work out the Student Suites portion first,” Sorrell said. He said the partnership indicated it wants to preserve through reuse the Dayton Daily News building.
“It certainly lends itself to complimentary usage, either retail or housing,” Sorrell said. “Everyone is working to preserve that building.”
Gibson said the developers have no plans to tear down the historic newspaper building. “We like historic buildings,” he said. “We intend to have that part of a reuse project in the future.”
The purchase contract came after the development duo originally had a memo of understanding with Students Suites. Officials for the LLC could not be reached.
Earlier this year, Katz and Gibson purchased commercial buildings containing more than 200,000 square feet in downtown Dayton to launch a new entertainment and residential district around East Third Street to be called the Fire Blocks District.
The deal with Student Suites, if it goes through, would mark another ambitious project the two have planned for downtown, which has had a resurgence in housing development in the past couple of years.
It would also remove an eyesore located just a block from City Hall. The Fourth and Ludlow site consists of the former Daily News building and a giant hole in the ground filled with assorted construction debris. Meanwhile, the company that demolished parts of the Daily News building, Steve Rauch Inc., is suing Student Suites Dayton, LLC.
Rauch is seeking financial damages and a foreclosure on the Mechanic’s Lien against Student Suites, which originally planned to build a 350-unit, $18 million housing complex that could serve Sinclair Community College students.
Rauch said he hasn’t been paid for demolition work at the site. He said he stopped working on the project when the billing cost for his work hit $869,000 and he still hadn’t been paid.
Rauch said Wednesday he’d like to be paid in full. “Regardless of whether he buys it or I buy it, we have to clean the site up,” he added. “I hope whoever buys it has a use for it.”
As part of the 2013 sale of the property to Student Suites, Cox Media Group Ohio — the division that operates Cox’s Ohio media properties — provided $1 million to the LLC toward preservation of the historic newspaper building and redevelopment of the site.
The city of Dayton also sent $938,591 to the LLC for expenses, and incurred other costs through its ownership of the property that was the site of the Schwind building, which was demolished.
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