Miller-Valentine Group, the local partner on the Dayton Arcade, has withdrawn from the project’s plan to build new artist housing and has returned millions of dollars in previously awarded tax credits to the state.
However, the lead developer is working with other partners to make the project a reality.
Miller-Valentine, headquartered in Dayton, teamed up with Maryland-based development firm Cross Street Partners to try to revitalize the long-vacant complex, with plans to create new housing, commercial and innovation spaces.
But last month, MV Residential Development President Brian McGeady notified the state that “the Art Works Lofts development is unable to move forward,” according to a letter to the Ohio Housing Finance Agency.
McGeady said Miller-Valentine was formally returning all previously awarded funding to the Ohio Housing Finance Agency, which awarded the artist housing component of the project $22.5 million in low-income housing tax credits and up to $6 million in housing development loans.
But the Ohio Housing Finance Agency awarded the funds to the redevelopment project, and officials say the funding remains committed to it, even if members of the development team change.
Miller-Valentine Group is committed as ever to the success of the arcade redevelopment, said Dave Dickerson, the company's president of Dayton sales and development.
"We are engaged in the leasing of the commercial component of the project and we continue to work with Cross Street on multiple capital raising initiatives," he said. "Like everyone in the region, we are excited for the future of the arcade and its impact on our community."
Cross Street Partners has discussed with the state next steps and potential new developers who could take over this component of the Dayton Arcade, said Kelan Craig, director of planning, preservation and development with the Ohio Housing Finance Agency.
“It is our understanding that Cross Street has been in discussions with McCormack Baron Salazar and the Model Group as potential partners to move ArtWorks forward,” he said. “Due to the scale and importance of this project, OHFA remains committed to providing the housing tax credits to the Dayton Arcade provided an experienced LIHTC developer is identified to step in to Miller-Valentine Group’s shoes.”
Model Group has a large and diverse portfolio but may be best known in this region for investing more than $200 million to transform the Over-the-Rhine neighborhood in Cincinnati.
“The mission of our company is to positively transform communities,” said Bobby Maly, principal with Model Group. “We think the arcade is a paramount example of what that can do for urban revitalization.”
“We are thrilled to be asked to be part of it potentially,” he said.
Model Group has restored more historic buildings in Ohio than probably any other developer, he said.
Cross Street Partners Principal Bill Struever earlier this week said the arcade project continues to draw closer to the finish line. He said they are still working on securing some funding sources, including additional new market tax credits.