Cincinnati, Hamilton County take first step toward new convention center hotel

CINCINNATI (WXIX) - Hamilton County Commissioners on Wednesday followed the lead of Cincinnati City Council last week in approving 3CDC’s purchase of the Whex Garage for the planned convention district.

“This is critical to the district, to the hotel, to the convention center, to the work we are trying to do with the city and 3CDC to revitalize the area,” said Commissioner Denise Driehaus.

The 780-space garage, located south of the DECC and just east of the planned hotel site, is structurally sound but requires renovation. It 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 expects to close on the purchase of the Whex Garage for around $12 million in the next several days.

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The Port will hold the property and lease it back to 3CDC, which will renovate and operate it.

The nonprofit developer will take out a $4 million loan and use $1.2 million in its own equity.

The city and county have each committed to putting $1.93 million into an escrow account that will back a $7 million loan with a seven-year term from the Ohio Department of Development. The loan is zero-interest for the first five years and accumulates one percent in interest annually beginning in the sixth year.

Garage revenues will go toward the loan’s principal and interest. The garage currently brings in just over half of the $1.8 million it grossed annually before the pandemic.

Leeper expects the returns to increase and be more than enough to pay “all expenses” with surplus cash going into the joint city-county account. The account will also generate its own investment proceeds.

The balance in the account after five years could be used to refinance the loan at conventional rates. The loan could also be refinanced beforehand if it appears, as Leeper predicts it will, that garage revenues are sufficient.

“We envision the market is going to get better over time,” Leeper said of parking downtown. “We are absolutely seeing that right now, absolutely clearly, in the 3,000 spaces we have in that area, where revenues are going nowhere but up, dramatically.”

Leeper reaffirmed the city-county account won’t be touched. “We are going to treat that like our kids’ [college fund],” he said.

A plot of city-owned land on the north side of the Whex Garage will be demolished. The adjacent Convention Place Mall is also expected to be demolished in April after a demolition permit was issued earlier this month. The properties could be combined and marketed for a future mixed-use project.

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.

Construction on the hotel could begin in the second quarter of 2024.

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