Tuesday, June 10, 2003

5th and Race to be built


Developer gambles that retailers will sign leases

By Ken Alltucker
The Cincinnati Enquirer

Eagle Realty Group is poised to start construction this summer on a $55 million project of shops and parking at Fifth and Race streets even though no retailer has committed to the project.

img
The city of Cincinnati approved a permit two weeks ago that staffers say allows the Western & Southern Financial Group subsidiary to break up asphalt covering the lot once reserved for Nordstrom.

City staffers soon expect to endorse a foundation permit so the developer can erect a two-story retail building of more than 123,000 square feet and an 840-space parking garage. Two high-rise towers eventually could top the project with apartments, condos, office or hotel rooms, the developer says.

The Cincinnati developer acknowledges that building speculative retail space with no signed leases is an aggressive move, but says it's necessary to inject a new mix of shops into downtown's struggling retail core.

"Cincinnati traditionally has been a kick-the-tires market," said Tom Stapleton, Eagle's senior vice president. "We are confident we can get the retail space leased."

Eagle's even prepared to "finance the project internally" without a loan from a bank or other financial institution to launch the development, Stapleton said.

The move comes as a New York consultant attempts to forge consensus among downtown property owners, developers and city leaders on the best way to shore up the retail offerings immediately around Fountain Square.

John Alschuler, who advocates an updated design and retail mix for Fountain Square, said Monday that he doesn't have enough details about Eagle's retail plans to say how well it fits his downtown vision.

But Western & Southern has found a cheerleader in Mayor Charlie Luken, who views the project as a way to revive a block that has long been the black eye of the city's development efforts.

"I've been convinced for some time that they're serious and ready to go," Luken said.

Yet Luken concedes the project faces significant obstacles.

The group that built Fountain Place also claims development rights at the northern section of the lot abutting Sixth and Race streets, the site of a demolished garage. The Cincinnati Development Group - which includes Madison Marquette, Belvedere Corp., Towne Properties and Duke Realty Corp. - says it has the right to build a garage with retail or other uses.

"Those rights have to be dealt with before Eagle is allowed to proceed," Luken said.

Representatives of Madison Marquette, Belvedere and Towne couldn't be reached Monday. Duke Realty Corp.'s Bob Fessler confirms there have been meetings with Eagle, but no agreement has been reached.

Stapleton claims his firm's proposed development doesn't interfere with CDG's interests. "We believe we can proceed," he said.

Eagle must complete other details before starting construction, Stapleton said, including closing a $5 million loan from the state to help pay for a garage.

Downtown pundits say a bigger question is whether retailers will be interested.

Stan Eichelbaum, who heads a Cincinnati-based retail consulting business, Marketing Developments Inc., said past speculative retail projects such as Convention Place Mall at Fifth and Elm streets and theAtrium lobby have stumbled.

"Downtown has in the past suffered from many build-it-and-they-will-come initiatives," he said.

A big challenge: erecting a building that fits retailers' needs.

"Tenant (specifications) are very important," Eichelbaum said. "Is it a desirable project? We don't know yet."

Eagle officials have presented renderings to the city's Urban Design Review Board. The developer named both an architect (BHDP Architecture) and a contractor (Dugan & Meyers Construction) on its permit application.

Eagle received permit approval to fill and dig at the site on May 27.

E-mail kalltucker@enquirer.com




LOCAL BUSINESS NEWS
5th and Race to be built
5/3 Bancorp to take write-off
Taiwan consults Chabot
Tristate Summary
Morning Memo: Hot tips & news to start your business day

U.S. & WORLD BUSINESS NEWS
Gay Web site pays off
Harry Potter hype in high gear
Britain not ready for Euro
Business Digest