One of greater downtown Dayton’s largest buildings has been purchased by one of the city’s largest private developers in a deal that represents a bold bet that the city’s urban renaissance will continue for years to come.
Dublin-based Crawford Hoying, a heavy-hitter in real estate development, in partnership with Woodard Development, has invested about $120 million into the area around Fifth Third Field, the home of the Dayton Dragons. They have created new housing, offices, restaurants, hotel rooms and other amenities.
Now, Crawford Hoying hopes to transform the Mendelsons liquidation outlet property, which has been targeted for redevelopment for a decades as potential deals eluded developers because of its size, cost and complexity.
Downtown Dayton has seen more than $1.5 billion in investment since 2010, and particularly nimble private investors such as Crawford Hoying have played a big role in fueling that resurgence.
Crawford Hoying is an experienced urban developer that saw big opportunities in largely untapped downtown Dayton and capitalized on a shifting market fueled by millennials’ preferences for walkable, live-work-play urban neighborhoods, said John Gower, place-making engineer for the city of Dayton and CityWide Development.
“Crawford Hoying were wise, they were smart, they saw an opportunity and they understand the market,” Gower said. “They understand the linkage between the quality of the design and the development … and the linkage between lifestyle amenities and this whole notion of place-making.”
Crawford Hoying has changed downtown’s landscape in the last several years with the explosive growth of the mixed-use Water Street District, located north of Fifth Third Field.
The company, working with Dayton-based Woodard Development, opened a new, $9 million office building at the northeast corner of Monument Avenue and Patterson Boulevard in late 2015. The office building’s tenants include Basil’s on Market, PNC Bank, Snap Fitness and other companies.
Not long after that, the first units of the Water Street Flats apartments opened. The first phase of apartments had 215 units, and a second phase added another 54, for a total investment of $38 million.
The partners then spent about $25 million to rehab an old Delco products property west of the ballpark into 133 new loft apartments, which opened in mid-2017.
Last year, they also opened a $15 million Fairfield Inn & Suites hotel next to the Water Street office building, which was the first new hotel built downtown in decades.
Crawford Hoying and Woodard Development are working to finish the $19 million Centerfield Flats apartments on the east side of the stadium, which are expected to open in November, offering 132 units, some with views of the baseball diamond.
Water Street District projects account for more than 87 percent of the 460 new market-rate apartments that have opened downtown since 2005, according to information from the Downtown Dayton Partnership.
Crawford Hoying is making perhaps its single largest bet on Dayton with the purchase of the Mendelsons liquidation outlet at 340 E. First St., just across the street and south of the ballpark and the Delco Lofts.
The company purchased the 550,000-square-foot building and adjacent property for about $7.3 million. The Mendelsons building is now the largest building Crawford Hoying owns.
That’s saying something considering Crawford Hoying is a large, experienced real estate developer with deep pockets that has more than 30 development properties in the Columbus area, with dozens of other projects in the pipeline, according to the company and local development officials.
Amy Walbridge, downtown development coordinator for the city of Dayton, said Crawford Hoying first appeared on her radar in November 2012, through an initial meeting with Jason Woodard, the firm’s local partner.
Walbridge knew Woodard well from his time with Miller-Valentine and elsewhere, and she took a careful, thorough look at Crawford Hoying’s portfolio, traveling to visit sites beyond Dayton and asking questions of those who had worked with the firm.
What she saw was promising, she felt.
“This prospect was one worth investing time in,” Walbridge recalls telling Shelley Dickstein, who was Dayton’s deputy city manager at the time.
Dave Dickerson, president of Midwest sales and development for Dayton-based Miller-Valentine Group, sees a distinct tier-movement at work: In an economic upswing that encourages developers to get busy, often the biggest metropolitan areas get attention first, followed by smaller second-, third- and fourth-tier cities.
Lately, it has simply been Dayton’s turn, Dickerson believes.
“It’s just taken a while for the dollars and the interest to come to this level,” he said.
So companies such as Crawford Hoying, Cross Street Partners (the lead on the Dayton Arcade), Woodard Development, and most recently Lawyers Development Corp., of Columbus, and First Hospitality, of Chicago, are all finding a place within Dayton.
Developers notice what other developers are doing. Said Dickerson: “The cat is out of the bag, and there’s no going back.”
The latter two companies — Lawyers Development and First Hospitality — are building a “boutique” hotel into the Barclay building, the former downtown headquarters of Miller-Valentine.
“It’s significant for the downtown and significant for the Dayton region,” Dickerson said, referring to all of the recent attention Dayton has seen.
Younger developers, a few of them millennials or near-millennials, who never quite bought into the “rust belt” narrative, are part of this burgeoning scene in Dayton and elsewhere, paving the way for a certain lifestyle – walkable developments, bike trails, urban restaurants, coffee shops, micro-breweries and more.
Gower, with the city of Dayton and CityWide, said the impetus comes courtesy of a cadre of developers who enjoy the challenge of creating walkable developments in urban environments.
But it’s not just younger developers. Younger, affluent customers who want a certain lifestyle are indispensable.
“The emergence of the millennials has certainly buttressed that market,” Gower said.
There have always been people who were negative on center cities, he added. But if you look at the last three to five decades, there has also been a “counter trend” to what Gower called “more developers developing out in corn fields.”
The attention may seem sudden, Gower said. It was actually decades in the making.
“It’s a 25-year, overnight emergence of a robust market,” he said.
It’s not a fad, Gower added. The emergence of millennials and “Generation Z” behind them are creating different demands and expectations. They don’t necessarily want to move to the suburbs and they don’t see the allure of a long commute.
“There’s a large percentage of them who are looking for something different,” Gower said.
And older, retired empty-nesters are part of the scene, too. They are helping to drive the downtown townhome market in particular, Gower said. They want to walk by the river, visit the Victoria Theater and more.
“This actually crosses generations,” Gower said.
Crawford Hoying looks for opportunities to create its own market and make a dramatic impact on a community and also develop projects with scale and density, said Brent Crawford, principal with Crawford Hoying.
Crawford Hoying says it is the largest developer in the Columbus area by volume, with more than $300 million in developments started in 2018, and its 2019 investments will reach a similar level. Officials in Dublin and Columbus say the company is well-regarded and has been a good community partner.
“They have done an excellent job with their projects in the city of Columbus,” said Cynthia Rickman, assistant director in Columbus’ department of development. “The developments have been high-quality and obviously add to the neighborhoods they are built in.”
Crawford Hoying has talked with Sandy Mendelson for years about buying the liquidation outlet property, but the company was focused on its other properties under development in Water Street, Crawford said.
But since the other Water Street projects have crossed the finish line, or are nearly complete, it is time to prepare for the next phase of development, Crawford said.
This is expected to be a major project — with an investment that could exceed $100 million.
The eight-story Mendelsons liquidation building has more space than the Dayton Arcade’s nine buildings combined, as well as the entire Stratacache Tower, formerly the Kettering Tower.
Development is a risky business, but Crawford said his company has extensive experience and a seasoned team who are up to the task of redeveloping the massive property.
“In our opinion the property has not sold simply because it is a very large undertaking that requires significant expertise and financial capacity to do successfully,” he said. “There are a select number of developers in the state that can handle something of this size and complexity.”
Owner Sandy Mendelson has wanted to sell the liquidation outlet for a long time.
In 2008, he talked about wanting to offload the property and consolidate and relocate the family-owned business into a smaller space.
Over the years, a series of individuals and groups showed interest in the building, but a buyer never emerged until Crawford Hoying came along, Mendelson said.
Crawford Hoying also succeeded where others failed related to the Delco building and the Water Street District site.
In the late 1990s and early 2000s, downtown was on a roll with the biggest slate of redevelopment projects in a couple of decades.
Fifth Third Field, which cost more than $23 million to build, opened in 2000 in Webster Station.
Other major investments in the area included the construction of RiverScape MetroPark (established in 2001 at a cost of about $25 million), the opening of the Relizon headquarters at Monument Avenue and Patterson Boulevard and the creation of 2nd Street Market (2001) and the 156-unit Cannery Lofts (2002, $21 million).
The ballpark was an instant success and its popularity has endured. The other projects also helped begin to change the image of Webster Station.
When it was clear baseball was coming to Dayton, many civic and development leaders predicted that the area around the river and the large commercial buildings surrounding the stadium would be in high demand for revitalization.
In 1999, Sandy Mendelson said he thought nearby commercial properties would attract new restaurants, loft apartments and other amenities.
The next year, Mendelson put the Delco Lofts building up for sale for $7 million.
Mendelson, however, could not find a buyer until Crawford Hoying and Woodard Development acquired it for $1.7 million in 2014.
There was interest in large-scale projects in that part of the city, but they too did not gain traction.
For example, in November 2006 a development group that included a subsidiary of Mandalay Baseball Properties, which owned the Dragons, proposed spending about $230 million for a waterfront development at what today is Water Street.
The “ballpark village” project was supposed to create shops, restaurants, entertainment venues, apartments and offices on property north of the stadium on about 72 acres along the riverfront and elsewhere nearby.
But less than two years later, one of the main partners pulled out of the project, and ballpark village, as originally proposed, did not move forward.
Some local economic development officials argue the project eventually did happen, only it involved new developers, Crawford Hoying and Woodard Development, and was renamed the Water Street District.
“We are excited to see continuous investment and interest in our downtown,” said Dayton City Manager Shelley Dickstein. “This development will largely complement the strategic investments previously made in the Webster Station area.”
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