Special financing may become part of Arcade project

Staying with it

Count on the Dayton Daily News to continue its continuing coverage of the downtown Dayton Arcade development.

Developers of the downtown Dayton Arcade are considering alternative financing to help in the development of the historical structure.

Miller Valentine and the Dayton-Montgomery County Port Authority have discussed using PACE financing (Property-Assessed Clean Energy) to prepare the downtown Dayton Arcade for residents and businesses, according to Jerry Brunswick, executive director of the Port Authority.

The group working to redevelop the Arcade — Miller-Valentine and Baltimore, Md.-based Cross Street Partners — has received $20 million in state tax credits to help fuel the project.

The PACE program, where permitted by local and state law, would allow payments for energy efficient renovation and equipment to be paid through a building owner’s property taxes, usually over one to two decades.

PACE financing has a track record downtown, having been used at Kettering Tower, at the Delco Lofts residences near Fifth Third Field and at the Top of the Market banquet center.

All involved agree that redevelopment of the Arcade — with residential and business uses envisioned — is complex and could take years.

“PACE can be a good fit in adaptive reuse projects, and that would be a very visible adaptive reuse project,” Brunswick said Monday. “We talked to Miller Valentine about” the project.

Miller Valentine has said that work will begin with the renovation of two buildings and more than 113,000 square feet along West Fourth Street, creating affordable housing for “creative” residents, including artists, makers and entrepreneurs.

The next phase of work on the downtown landmark would focus on 70,000 square feet of retail space, 45,000 to 60,000 square feet of office space and a hoped-for boutique hotel component, Miller Valentine has also said.

“The Arcade would be an ideal PACE project,” said Ed McGarry, a member of the Port Authority’s board of trustees and a senior vice president with PNC Bank.

The Arcade opened in 1904 as a farmer’s market and later added retail businesses, restaurants and apartments. It was a mixed use development before the concept “mixed use” was coined.

The buildings that make up the Arcade have been generally neglected for years. The site has been vacant since the spring of 1990, although parts of the building have occasionally been opened up for special events.

In a phone interview Monday, Brunswick said he would “love to help make that project a reality.” But in a meeting earlier in the day, he cautioned Port Authority trustees: “That (the Arcade project) continues to be a project of potentially significant challenge.”

Messages seeking comment were left with Dave Dickerson, Miller Valentine Dayton market president, and David Williams, the firm’s vice president, urban development.