The last $50 million poured into downtown Cincinnati has financed two restaurants and more than 400 apartment units downtown and in Over-the-Rhine.

        The 1995 Cincinnati Equity Fund, financed primarily by Procter & Gamble Co. and other local corporations, still has $15 million ready for investment.

        As Cincinnati Mayor Charlie Luken proposes selling bonds to raise millions of dollars for another development fund, the Equity Fund is looking for good projects in a slow market.

        But organizers acknowledge that there still is a need for below-market-rate loans for projects that help downtown, but might not meet the lending standards of most banks or traditional investors.

        “Most of the projects we've invested in would not have happened without our participation,” managing director Steve Massie said.

        Mr. Luken's proposal, not yet made formally to City Council, would use franchise fees paid by Time Warner Cable subscribers to buy bonds and finance neighborhood and downtown projects.

        With the Equity Fund, Mr. Massie constantly is bal ancing dual priorities: Earning a profit for investors and helping make valuable community projects happen.

        One success story is the Hanke Building in Over-the-Rhine. The Equity Fund put almost $1 million into the 1998 renovation, which provided office space and several bars on the first floor.

        And earlier this year, it exited or “flipped” the loan to an affiliate of Goldman Sachs, the famed New York investment house.

        “Had someone suggested to me when we financed the loan that Goldman Sachs would be our exit strategy, I would have laughed,” Mr. Massie said.

Firstar problems

        But one disappointing project is the Firstar Center, formerly Riverfront Coliseum. The Equity Fund invested $6 million into the 1997 renovation and lost that after the building's owners went through Chapter 11 bankruptcy this year.

        Dave Phillips, who raised the money for the Equity Fund, called that a community success. Without the investment, Hamilton County might have torn down the riverfront arena, leaving a bill of $150 million to build a replacement.

        “I think the real success of the Equity Fund is the Coliseum,” said Mr. Phillips, the retired Arthur Andersen executive who helped start Downtown Cincinnati Inc., the biggest advocacy organization for downtown, in 1994.

        The available $15 million also includes interest payments and profits from some investments. Overall, the fund is covering expenses and providing a nominal return to its corporate investors, Mr. Massie said.

        “The idea is to recycle the money,” he said.

        Other Equity Fund investments include:

        • Restaurants: $6 million into the Walnut Street building that now houses Nicholson's and Pizzeria Uno. It also contributed to the Palomino restaurant overlooking Fountain Square.

        • Residential: $2.5 million into the renovation of the Power Building on Eighth Street. Overall, it has helped finance projects that produced 416 apartments in downtown and Over-the-Rhine.

        • Stores: $2 million into the TJ Maxx discount store on Fourth Street. The fund also reserved $10 million for the Nordstrom store at Fifth and Race streets, but that project was abandoned a year ago.

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