The improvements will encourage existing tenants to stay put and expand and should also lure new tenants, increasing the complex’s occupancy rate, bringing it closer to full capacity. Dayton city commissioners today are expected to approve contributing $450,000 in grant funding to the project.
“They (the new owners) have done many similar projects, where they buy a property that is under-performing and they reinvest and they are able to attract new jobs because of their reinvestment,” said Shelley Dickstein, Dayton’s assistant city manager for strategic development.
Last September, Elizabeth Place Holdings LLC, a group of California investors, purchased the 1.2 million square-foot Elizabeth Place office complex for about $12.3 million, auditor’s records show.
The complex was originally the home of St. Elizabeth Hospital, later called the Franciscan Medical Center. It was Dayton’s oldest public hospital when it closed in 2000, resulting in the lay off of about 1,500 workers.
Two years later, the complex was purchased and transformed into office space, primarily aimed at medical providers and companies related to health care.
After the conversion, the property changed hands multiple times. Delamore Elizabeth Place, the previous owners, filed for bankruptcy protection in 2009.
The property struggled partly because of the costs associated with renovations, and previous owners were unable to finance improvements and the facility’s operations, said Veronica Morris, senior development specialist with Dayton’s Office of Economic Development.
Today, about one-quarter of the available medical and office space at Elizabeth Place is vacant, or about 388,000 square feet, she said. The aggregate annual payroll of people employed at Elizabeth Place is about $23.4 million.
But adding 200 jobs at the site will increase the occupancy rate to about 90 percent, and the payroll should grow to at least $32.4 million, Morris said.
The new owners plan to attract new tenants and encourage existing tenants to expand by investing in the parking lot, signage and exterior and interior of the property, according to the company’s development agreement with the city of Dayton. The project is expected to wrap up by June 30, the agreement states.
The improvements will provide some much-needed stability at the property, which has struggled because of the recession and changes in ownership, officials said.
Physicians, medical providers and businesses related to health care are the majority of the complex’s tenants. But the industrial mix continues to diversify and includes retail, food service and environmental consulting companies, Morris said.
Dr. Ugo Nwokoro, with the Dayton Internal Medicine Clinic at Elizabeth Place, said he has considered relocating because the facilities need both a great deal of work and stability in ownership.
"It has gone through several hands, and every time that happens, you always lose out because somebody comes, makes promises and then leaves," he said. Calls made to Elizabeth Place's management and new owners were not immediately returned.
The city has pledged $200,000 to the project from its Development Fund and $250,000 from the West Dayton Development Fund.
In exchange, Elizabeth Place Holdings has agreed to pay the city a certain amount of income taxes for the next five years, based on the projected increase in employment at the complex. The minimum amount the company will owe is $528,491 in 2014, and the tax bill will gradually rise to a minimum payment of $735,500 in 2018.
If collections fall short of the prescribed amounts, the company will be responsible for paying the difference. Minimum tax payments are a standard condition of projects supported by the city’s development funds, officials said.
Elizabeth Place Holdings sought $500,000 in funding from the Montgomery County ED/GE (Economic Development/Government Equity) program, but it was not awarded funding.
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