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Cincinnati: Over-the-Rhine: 3CDC Development and News

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It's possible they're afraid 3CDC will sit on the property and slow the development process.

 

True.  Are there developers who are currently being turned away in OTR due to 3CDC, though?

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^ From the BizCourier article:

“There’s enough people on the sidelines” capable and ready of doing redevelopment work in OTR, Messer said. “All these organizations want in and nobody can get in.”

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Seelbach pretty well sums up my views on this.  Also NOL is basically a separate neighborhood due to the width of Liberty Street.  Its going to take a long time for development to breech that psychological barrier.  Of course if Cranley doesn't cancel its road diet that could be a help but still, the emphasis here should be on speed of development, and frankly Cincinnati just sucks at redeveloping what should be a goldmine without a little push from the top.  Too many other cities have actually leveraged their assets while Cincinnati let politics hold up theirs.  There shouldn't be any more battles over this neighborhood just forward progress.

 

Its really sad though, I support a more free market based solution, but the history of redevelopment of OTR has proven time and time again that doesn't work without some kind of push from 3CDC and OTR is too important to be lost.

 

Mann's statement about upping the percentage of afforable housing is ridiculous, that will add even more redtape to the process of redeveloping the neighborhood and there isn't much time left.  Its either the neighborhood gets redeveloped or gets lost, the situation of NOL is that dire.

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Its going to be interesting.  I'm very happy with Messer btw for his leadership on the streetcar -  I just don't want to see any more fighting over OTR just progress.

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Yeah it definitely will be interesting.  I think it is somewhere in the middle.  If there is property they are sitting on and not ready to develop themselves, and someone on the sideline is ready to develop it, then they should look at selling it, IMO.  Speed it up a bit.  3cdc is still really good at the big projects and if they do decide to sell some properties, they need to be very selective in what properties they are going to sell that are not as "tough" of a job as others.

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I am not 100% one way or the other on Messer's assertions, but I think Mann's motion for 33% affordable housing is good.

 

With the streetcar being a sure thing, I'm not worried about development slowing down. I think we should hear people out on the possibility that 3CDC is/would be holding things back. If the streetcar battle were lost, I'd look at things differently.

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The reason why 3CDC is important is because smaller investors who are on the sidelines will be motivated to make a move once something big is under construction. 

 

There are a lot of people depending on family loans to do projects.  I'm not sure that the streetcar is enough to tip the scales for a lot of Uncle Freds and Aunt Beatrices out there sitting on $2 million.  Seeing a 40-unit complex going up a block away is decisive proof that things are really happening in an area.

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33% affordable housing?!?!  That's an enormous number that sounds like an attempt to deflate the market and stall redevelopment.  Besides, new construction and rehabs simply are not the place to be implementing affordable housing.  New construction is just too expensive, so making units affordable requires very cheap and crappy construction.  Maybe the city could be allowing or encouraging smaller units or SRO's through some sort of incentives or density bonuses, but to say that much of the housing should be affordable means the developers will need to further inflate the prices of the market-rate units to compensate.

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33% affordable housing?!?!  That's an enormous number that sounds like an attempt to deflate the market and stall redevelopment.  Besides, new construction and rehabs simply are not the place to be implementing affordable housing.  New construction is just too expensive, so making units affordable requires very cheap and crappy construction.  Maybe the city could be allowing or encouraging smaller units or SRO's through some sort of incentives or density bonuses, but to say that much of the housing should be affordable means the developers will need to further inflate the prices of the market-rate units to compensate.

 

That's not necessarily true. Usually gap financing is provided in the form of LIHTC or HOME funds. They can offset most of the costs of redeveloping existing buildings that the lost revenue from cheaper rent would cover. And this is only pertaining to the buildings the city directly owns and is seeking an entity to become the preferred developer. Not all new development in OTR.

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This housing is a city asset and should be used to further public goals such as maintaining affordable housing in the neighborhood which has rapidly rising rents. If they don't take the opportunity now, they won't have it again. I suspect the 33% number will be negotiated down but it definitely needs to bein the agreement no matter who it is with.

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Thinking this over I think a compromise would be the best solution here - half the properties go to 3CDC half the properties to qualified developers.  It would be win win - 3CDC would be a guarantee to  mitigate risk, and jump start development, while giving the rest to small developers would allow for that development to be more equally handed out and allow for more competitive environment and possibly faster development to occur.

 

The key thing is qualified developers and 3CDC getting enough of a group of properties to be a catalyst towards other development occurring hopefully by the other qualified developers - by splitting this up that way we could have a win-win that may make development faster than if all went to 3CDC or all went to other developers.

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They could start implementing micro-apartments in some of the new projects. Small yeah, but maintain quality and not have to be subsidized as much either directly or by inflating the market units...

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^ From the BizCourier article:

“There’s enough people on the sidelines” capable and ready of doing redevelopment work in OTR, Messer said. “All these organizations want in and nobody can get in.”

 

Thanks.  I wish he would have cited one or two examples of interested organizations or missed opportunities.  Not that I don't believe him, but it seems like there are a TON of vacant structures in OTR, and 3CDC can't be hoarding them all.

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^ From the BizCourier article:

“There’s enough people on the sidelines” capable and ready of doing redevelopment work in OTR, Messer said. “All these organizations want in and nobody can get in.”

 

Thanks.  I wish he would have cited one or two examples of interested organizations or missed opportunities.  Not that I don't believe him, but it seems like there are a TON of vacant structures in OTR, and 3CDC can't be hoarding them all.

 

He's just making stuff up.  Look on any of the real estate sites, there are always a half dozen properties for sale -- to anyone -- north of Liberty St.  Like right now:

 

http://www.trulia.com/property/3073360434-139-W-McMicken-Ave-Cincinnati-OH-45202

 

http://www.trulia.com/property/3019595106-1810-Vine-St-Cincinnati-OH-45202

 

http://www.trulia.com/property/3157090678-1828-Republic-St-Cincinnati-OH-45202

 

http://www.trulia.com/property/44696052-56-E-McMicken-Ave-Cincinnati-OH-45202

 

http://www.trulia.com/property/3015265620-2001-Vine-St-Cincinnati-OH-45202

 

http://www.trulia.com/property/3015265620-2001-Vine-St-Cincinnati-OH-45202

 

http://www.trulia.com/property/3015265620-2001-Vine-St-Cincinnati-OH-45202

 

 

 

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They could start implementing micro-apartments in some of the new projects. Small yeah, but maintain quality and not have to be subsidized as much either directly or by inflating the market units...

 

ditto to this!  I am a fan of the micro apartment.  If I was still a bachelor I would definitely be interested in one.

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^ From the BizCourier article:

“There’s enough people on the sidelines” capable and ready of doing redevelopment work in OTR, Messer said. “All these organizations want in and nobody can get in.”

 

Thanks.  I wish he would have cited one or two examples of interested organizations or missed opportunities.  Not that I don't believe him, but it seems like there are a TON of vacant structures in OTR, and 3CDC can't be hoarding them all.

 

I think the focus of the community council letter is the 35 properties owned by the city mentioned in the article.  I thought the same thing about listing out examples too, but it's probably not politically wise to do at this point because it may just create or escalate behind the scenes conflicts.  I think the letter strikes a good balance acknowledging a role for 3CDC in the large projects while at the same time making the case for individuals and small companies to handle the smaller buildings. 

 

So it seems there are three different priorities for OTR, not necessarily mutually exclusive, that came to a head today.  The first is the unity-of-vision model represented by 3CDC.  The second is speeding up development by allowing in more actors to develop owner occupied homes and small apartments represented by Messer and the community council.  The third is the need for low income housing represented by Vice Mayor Mann and advocates (although this is stated as a priority by 3CDC and the community council as well.)  Once again, they are not necessarily mutually exclusive, but there are going be some tradeoffs balancing between the three poles. 

 


www.cincinnatiideas.com

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33% affordable housing?!?!  That's an enormous number that sounds like an attempt to deflate the market and stall redevelopment.  Besides, new construction and rehabs simply are not the place to be implementing affordable housing.  New construction is just too expensive, so making units affordable requires very cheap and crappy construction.  Maybe the city could be allowing or encouraging smaller units or SRO's through some sort of incentives or density bonuses, but to say that much of the housing should be affordable means the developers will need to further inflate the prices of the market-rate units to compensate.

 

I challenge everyone to do the math. According to that Business Courier article, what is the maximum amount per month that a developer could charge for rent in Cincinnati and still meet HUD's definition of "affordable housing"? You may be surprised.

 

Almost all of the new apartments in OTR are considered affordable by HUD's definition.

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I went through the 139 W McMicken property when it was on the market the last time. It looks like the current owner bought it for $45,000 and has now re-listed it for an absurd $125,000. The owner is probably just going to sit on the property and has no intentions of actually redeveloping it.

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^-Isn't that an argument for at least some 3CDC involvement?  They have enough clout and resources to pressure lousy speculators to get out of the market and generate productive results.

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^-Isn't that an argument for at least some 3CDC involvement?  They have enough clout and resources to pressure lousy speculators to get out of the market and generate productive results.

 

But 3CDC could do the same thing -- buy up the buildings and sit on them until the Findlay Market area becomes their next focal point.

 

My main concern is that 3CDC has fallen into rut and is trying to build the same development over and over again: a massive parking garage surrounded by a little bit of residential and some high-priced retail space. They are clearly catering to people who want to drive in, eat at a fancy restaurant or visit expensive stores, and drive out. This is why they are not concerned about keeping other types of businesses (see Joseph Williams Home) in those retail spaces.

 

At some point, if you want the neighborhood to become a more liveable, walkable place and not just a tourist destination, you need to shift the focus to residential and more resident-oriented businesses. And if 3CDC doesn't want to do this, fine, but let other developers come in and do so.

 

If it sounds like I'm being harsh on 3CDC, let me say this: I appreciate everything they have done and hope they will continue do mostly the same thing going forward, with a few tweaks. However, I don't want 3CDC's developments to dominate the neighborhood. It needs to grow more organically.

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^I loved Joseph Williams home, but it was the very definition of an "expensive store."  You could buy tchotchkes (sp?) and other things for reasonable amounts, but the furniture was far from "affordable." 

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33% affordable housing?!?!  That's an enormous number that sounds like an attempt to deflate the market and stall redevelopment.  Besides, new construction and rehabs simply are not the place to be implementing affordable housing.  New construction is just too expensive, so making units affordable requires very cheap and crappy construction.  Maybe the city could be allowing or encouraging smaller units or SRO's through some sort of incentives or density bonuses, but to say that much of the housing should be affordable means the developers will need to further inflate the prices of the market-rate units to compensate.

 

I challenge everyone to do the math. According to that Business Courier article, what is the maximum amount per month that a developer could charge for rent in Cincinnati and still meet HUD's definition of "affordable housing"? You may be surprised.

 

Almost all of the new apartments in OTR are considered affordable by HUD's definition.

 

Based on the HUD numbers, the amount would be over $1000/month.

 

I guess the question is, would you consider rent of over $1000/month to be affordable?  I don't.  And I think that's where the questions upthread about the figures comes from--affordable housing in Cincinnati doesn't typically entail something that is $1000/month.  In fact, I'd wager that the biggest supporters of affordable housing would be outraged if 33% of those properties were redeveloped at $1000/month rents and then the community was told they were "affordable." 

 

Never mind re: numbers.  I was using "household" and not "family" income numbers.  (I had a long discussion of math but was using the wrong base...) 

 

 

 

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I disagree. I bought several pieces from them at reasonable prices. It was quality product, similar to the premium offerings at Crate & Barrel Arhaus (maybe not as expensive or physically large). I got exceptional deals from them. Additionally, they supported many small businesses, such as myself and others, and were great folks to work with. It was a shame their lease basically doubled - and is now on its way to becoming what we don't need more of: restaurant/bar.

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I disagree. I bought several pieces from them at reasonable prices. It was quality product, similar to the premium offerings at Crate & Barrel Arhaus (maybe not as expensive or physically large). I got exceptional deals from them. Additionally, they supported many small businesses, such as myself and others, and were great folks to work with. It was a shame their lease basically doubled - and is now on its way to becoming what we don't need more of: restaurant/bar.

 

I thought the quality was great, and I liked the guys.  They were very helpful.  But their prices were not "affordable."  It's not like you could get a nice sofa there for $300. 

 

But then again, maybe I just have a different definition of "high priced," because I would consider furniture from Crate and Barrel and Arhaus to be expensive, too. 

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Can you get a nice sofa anywhere for $300? The only place I know of that sells one that cheap is Ikea and it's certainly a piece of crap.

 

But there is a middle ground that wasn't represented there. 1200-2000 for a nice sofa is completely doable for a lot of people and you got what you paid for but not everyone is capable of dropping that much on a couch or other piece of furniture even if it is a really good product.

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^I loved Joseph Williams home, but it was the very definition of an "expensive store."  You could buy tchotchkes (sp?) and other things for reasonable amounts, but the furniture was far from "affordable." 

 

My point is that if you are not a bar, restaurant, or clothing store, 3CDC isn't really interested in keeping you around. They are okay with storefronts being used for other purposes when the area isn't yet in high demand (Pet Wants, Queen City Underground Tours, and the Gateway Quarter office), but as soon as the block becomes trendy, you're out of there.

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^-Isn't that an argument for at least some 3CDC involvement?  They have enough clout and resources to pressure lousy speculators to get out of the market and generate productive results.

 

But 3CDC could do the same thing -- buy up the buildings and sit on them until the Findlay Market area becomes their next focal point.

 

My main concern is that 3CDC has fallen into rut and is trying to build the same development over and over again: a massive parking garage surrounded by a little bit of residential and some high-priced retail space. They are clearly catering to people who want to drive in, eat at a fancy restaurant or visit expensive stores, and drive out. This is why they are not concerned about keeping other types of businesses (see Joseph Williams Home) in those retail spaces.

 

At some point, if you want the neighborhood to become a more liveable, walkable place and not just a tourist destination, you need to shift the focus to residential and more resident-oriented businesses. And if 3CDC doesn't want to do this, fine, but let other developers come in and do so.

 

If it sounds like I'm being harsh on 3CDC, let me say this: I appreciate everything they have done and hope they will continue do mostly the same thing going forward, with a few tweaks. However, I don't want 3CDC's developments to dominate the neighborhood. It needs to grow more organically.

 

I agree.  I do think they do a great job, but there needs to be a really nice mix.  Unfortunately the car culture is still here and the streetcar hasn't opened yet.  It will be good if they can get the second phase to the hospitals in Uptown, and that will allow even more high income owners (doctors, nurses, etc.) to do some redevelopment on their own.  Look at areas of Chicago, for example.  I am not entirely sure if there was a non profit redevelopment team, when they were turning over all the brownstones and apartment buildings in the northside neighborhoods back in the 80's.  When you walk through those residential neighborhood areas, they look very individualistic, and I know a lot of them were because my aunt lived there when it was turning over, and a lot of her friends and colleagues were "pioneers", buying these brownstones on the cheap and redeveloping them on their own.

 

I think government has it's role and certainly 3CDC does as well, and I think having affordable housing requirements is a very noble thing, but to me, at some point the market needs to take off on their own.  Why does the whole neighborhood have to be the design of one entity, 3CDC?  If people are willing to buy some of 3CDC's properties that they are sitting on, let them buy them and start building if 3CDC is going to sit on them for another 3-5 years.

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AND I will say as well, 3CDC is sitting on a lot of properties.  Just go to Hamilton County Auditor and type in East 15th Street.  OTR Holdings is 3CDC, I am fairly certain.

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I went through the 139 W McMicken property when it was on the market the last time. It looks like the current owner bought it for $45,000 and has now re-listed it for an absurd $125,000. The owner is probably just going to sit on the property and has no intentions of actually redeveloping it.

 

It is insanely expensive to renovate most of these buildings even to 3CDC's at-times mediocre level, i.e. Westfallen II.  3CDC is basically breaking even on these projects, from what I understand.  And there is all this call for "developers" to come out of the woodwork and start renovating these falling-over buildings, but the fact is you can't really make money doing it which is why it isn't happening. 

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^Very true.  But how many of the buildings can individuals do themselves, i.e. for them to live on?  I wonder if that is what Messer was referring to?  Not necessarily the very large buildings where developers want to make money.

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Look at areas of Chicago, for example.  I am not entirely sure if there was a non profit redevelopment team, when they were turning over all the brownstones and apartment buildings in the northside neighborhoods back in the 80's.  When you walk through those residential neighborhood areas, they look very individualistic, and I know a lot of them were because my aunt lived there when it was turning over, and a lot of her friends and colleagues were "pioneers", buying these brownstones on the cheap and redeveloping them on their own.

 

I think government has it's role and certainly 3CDC does as well, and I think having affordable housing requirements is a very noble thing, but to me, at some point the market needs to take off on their own.  Why does the whole neighborhood have to be the design of one entity, 3CDC?  If people are willing to buy some of 3CDC's properties that they are sitting on, let them buy them and start building if 3CDC is going to sit on them for another 3-5 years.

 

First off OTR is in far worse shape than the Northside neighborhoods in Chicago were, the northside neighborhoods were generally working class enclaves prior to the 80s and 90s.  OTR had fallen to one of the most impoverished neighborhoods in the country and had much of its property abandoned.  Secondly, Chicago has way more collective money being a larger and wealthier region so there is a ton more capital in total to rehabilitate projects from private developers.  I'm pretty amazed at some of the dumpy falling down places I've seen restored on the near west side which also have to go through a very ardous process of permitting/smoozing the local alderman to get done. Finally Chicago has a culture of risk taking - I think that if Cincinnatians had to go through half of the BS of permitting and dealing with crooked local politicians that Chicago developers have to go through they would throw their hands up immediately and no redevelopment would ever have get done.  There is enough of a cultural difference that I don't think most Cincinnatians are capabile of taking that much risk, its not in their nature.  It sucks, but its a sad reality, and I don't see any other alternative to 3CDC at least making the first move before other developers are comfortable enough to make their move.  (Again look back at the Skyline Chili on court street which should be making thousands of dollars off of increased attention to that part of town, but are being sticks in the mud because they are scared or too set in their ways to do something different to accommodate the very obviously changing marketplace that is literally right in front of their noses).

 

 

*Weird pet peeve, I don't think there are many brownstones in Chicago (practically none in Cincinnati - I've seen Cincinnati media refer to brick Italianate buildings as brownstones when they are brick not stone), the more common architecture are Greystones which are lighter colored stone buildings usually built around the turn of the 20th century.  2-Flats and later courtyard apartments are common in that part of town.  The only place I think there are some brownstones that are kind of in the NYC vein are in Old Town, parts of the Gold Coast and parts of Lincoln Park. 

 

 

This is a pretty good overview of all of them: http://www.nhschicago.org/site/3C/category/what_is_greystone

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