5th & Race: Case study in development deals (Part 1)

        • December 1996: Mayor Roxanne Qualls confirms that Cincinnati is attempting to lure Nordstrom and Tiffany Co. to shore up downtown retail.

        • November 1997: Lazarus store at Fountain Place opens. City officials, Lazarus executives and real estate specialists agree other anchor retailers are needed downtown.

        • April 1998: Indianapolis developer Herman Renfro completes a six-month study on putting Nordstrom on Fourth Street and a family entertainment district on riverfront. Other developers, residents, and City Council members question if it’s worth jamming the riverfront with theaters, shops and restaurants to lure Nordstrom. Mr. Renfro insists Nordstrom won’t come downtown without a vibrant riverfront.

        • May 1998: Dillard’s Inc. announced acquisition of Mercantile Stores Co. Inc., crushing the city’s plans to bring upscale Maison Blanche department store to Fifth and Race.

        • March 1999: Demolition of 14-story Fifth & Race tower and surrounding structure to clear the way for Nordstrom or another retailer. In addition to tower, demolition includes the Convention Way walkway between Race and thw Regal Hotel, former Neisner Building and the Parkade Garage at Sixth and Race streets.

        • September 1999: City officials announce plans to lure 14-screen movie theater to the vacant McAlpin’s department store on Fourth Street. Earlier, the city hoped Nordstrom would take that spot to return Fourth Street to its former retail glory. City begins shopping Fifth and Race site to Nordstrom.

        • May 2000: Letter of intent to put Nordstrom store downtown outlines a $48.7 million package: $26 million from the city to build the store, parking garage and skywalks; $12.7 million from Cincinnati Equity Fund; $5 million in tax-increment financing; $5 million loan from the state.

        • June 2000: City Council approves financing plan for downtown Nordstrom, promising that no more than $35.9 million of taxpayer money will be spent to build store, a garage and skywalks.

        • September 2000: Seattle-based Nordstrom announces that chairman and chief executive John Whitacre quit; Blake Nordstrom and Bruce Nordstrom, two family members, will take his place.

        • November 2000: Nordstrom suspends plans to build downtown stores in Cincinnati and Pittsburgh.

       ( Compiled by Ken Alltucker.)

“The deal is dead,” Charlie Luken said before Wednesday’s City Council meeting. “Nordstrom’s has pulled out.”

“This is not something we knew was coming,” City Manager John Shirey told a stunned City Council on Wednesday, adding that he expects there will be a “tendency to somehow blame the city for this.”

Mr. Luken said he wants to use Nordstrom’s withdrawal to “default” the contract the city has with Eagle to develop the city-owned site. He said the site is still one of the most attractive retail locations in the city and wants to open it to all developers. The city has spent $10 million buying property and clearing the site.

September 2015:  After 14 years as a parking lot, the new Dunhumby headquarters is expected to be completed in 2015. The lot is owned by the city, and the project is funded through new market tax credits, state and conventional loans, private capital and corporate loan funds managed by the 3CDC. Which means lots of public subsidy.

The point of reviewing these historical facts is not to cast blame or aspersions on any city administration or individual developer.  It’s to remind us Monday morning development-quarter-backs how complicated it is to build a city.  These decisions are not fast or easy; they involve countless variables and an economy that is changing as fast as the speed of the internet.  Big projects span multiple political careers, changes in administration and the stars have to come into perfect alignment for a wide range of competing business interests.  When a city works – let’s face it – it’s always some mysterious combination of lots of hard work, time and patience, combined with that essential dollop of shear, unadulterated luck.

Tomorrow’s post:  Part 2:  What we should learn from 5th & Race. .  

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