3CDC advances purchase of ‘critical’ property for planned convention district
It’s among the first dominos to fall in the massive undertaking that spans nearly a quarter of Downtown Cincinnati.
CINCINNATI (WXIX) - 3CDC expects to close on the purchase of the Whex Garage by the end of March, vaulting the convention district forward with months to go before shovels hit the dirt.
Bringing the garage under public ownership is an indispensable part of the plan to renovate the Duke Energy Convention Center and construct a new $482 million convention center hotel.
The 780-space garage, located south of the DECC and just east of the planned hotel site, will provide parking for both hotel guests and convention attendees, alleviating the need for more structured parking nearby and bringing down the overall development cost.
3CDC’s Steve Leeper on Monday presented the Whex Garage purchase to Cincinnati City Council’s Budget and Finance Committee, which advanced the measure to full council. The Hamilton County Board of Commissioners will consider a similar measure on March 23.
“This is one of the first critical actions to bring our convention center district plan to fruition,” he said.
3CDC has a purchase option on the garage for $11.9 million. The Port of Greater Cincinnati Development Authority will hold the property and then lease it to 3CDC, which will renovate and operate it.
The city and county would each contribute $275,000 annually for seven years into an escrow account that would back a $7 million loan from the Ohio Department of Development.
The city’s money would come from the Downtown/Riverfront TIF District proceeds. TIF accounts capture new value created from development in the area and repurpose that money to projects that benefit the same area. The city used Downtown/Riverfront TIF money to buy the former Saks building in January.
Leeper described the ODD loan terms as “very favorable.” Nothing would be owed on the principal or interest for the first five years. “So during that five-year period, we are renting free money from the State of Ohio,” Leeper said.
The loan’s principal and interest would be paid back using garage revenues. The garage currently brings in just over half of the $1.8 million it grossed annually before the pandemic, but Leeper expects the returns to increase. “We do not anticipate either the city or county contributions will actually be needed,” he said.
The escrow account would generate investment proceeds. The city and county would be able to take the reserve balance after those seven years are up. Leeper estimated the account would contain around $5 million at that time. 3CDC could also request that it be used for the garage’s redevelopment.
The remaining $4.9 million for the garage purchase will come from 3CDC.
The garage is structurally sound but needs “substantial improvements” to connect it to the future hotel. A new 5th Street vehicle entrance is likely, entailing removal of the current ramp entrance that Leeper said is so far set back that it verges on being hidden.
The ramp sits next to and above a plot of city-owned land that looks “like a skate park,” said Leeper. The “skate park” land sits next to Convention Place Mall, which is owned by the Port and is expected to be demolished in April after a long legal saga over development rights was resolved last week, per the Business Courier.
Leeper explained the “skate park” land could be folded into the mall site for a future mixed-use development.
3CDC expects to close on financing for the DECC renovation in the fourth quarter of 2023, with construction beginning in the first quarter of 2024, if not sooner. The designs are currently being finalized.
“We do have an aggressive schedule,” Leeper said.
Construction on the hotel could begin in the second quarter of 2024.
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