MKM Architecture and Design An artist's rendering shows a street-level view of the planned new-construction building at 111 W. Columbia St. It will have 6,900 square feet of commercial space and 24 market-rate apartments.
Sunday, August 13, 2017 1:00 am
Building on a vision: Landing project - and its financing - benefit from extensive planning
Monday, the City Redevelopment Commission will consider an agreement among the Downtown Development Trust, developer the Model Group and Fort Wayne for the Landing project. Approval will allow all parties to finalize the financing structure in place for the project then close on the sale of the nine buildings currently owned by the trust. Closing is to occur before year end. The development agreement is significant because it will fulfill another plank of the Downtown Blueprint, which was initially developed during Mayor Graham Richard's administration and has more recently been updated and honed by Mayor Tom Henry's administration and the community in 2016.
The Downtown Blueprint is the result of years of intensive meetings and focus groups comprising public officials, private-sector leaders, non-profit organizations, other community stakeholders and, most important, community members. The blueprint envisions a long- term downtown redevelopment plan, establishes the “Harrison Street Corridor” as a priority to the success for downtown redevelopment and, as of 2016, expressed the community's desire for concentrated retail and mixed-use development along the Harrison Street Corridor and the adjacent blocks of Wayne, Berry, Calhoun and Columbia streets.
The Downtown Blueprint also helped identify and prioritize catalyst projects capable of leveraging public funds and other incentives with private investment. The plan recognized that there was significant latent demand for downtown housing, retail, sports, entertainment, arts and cultural facilities, which, if realized, would be capable of transforming the core of downtown Fort Wayne into a vibrant urban center.
The success of the Downtown Blueprint, so far, can be seen with Parkview Field, Harrison Square and the Courtyard Marriott on the south end of the Harrison Street Corridor and the soon-to-begin Riverfront Promenade Park development at the north end of the corridor. In between lie the Ash and Skyline projects, Randall Lofts (which are 100 percent occupied), Superior Lofts (now under construction), numerous instances of existing office and retail buildings being renovated with new private capital both along the corridor and throughout all of downtown, a soon-to-be boutique hotel to be developed – and now the Landing project.
The Landing and Columbia Street have enormous mixed-use redevelopment potential and are the virtual gateway to our riverfront development, all as identified as part of the Downtown Blueprint vision.
The Landing is the most historic street in Fort Wayne, dating back almost to the founding of the city. Canal boats loaded and unloaded there almost 180 years ago – and, for almost 75 years until 1900 – Columbia was really “the main street” of Fort Wayne. Unfortunately over the last 20 years, The Landing has fallen on hard times and many of the historic buildings – which go back more than 140 years – have been left to fall into substantial disrepair.
At the same time, the Landing represents one of best reminders of historic Fort Wayne architecture and design, with some buildings listed on the National Register of Historic Places. Only one building, the Rose Marie building (soon to be razed), is of relatively recent construction.
The Downtown Development Trust sees the Landing as a community treasure, and our commitment these past four years has time and again been reaffirmed by our board as consistent with our purpose of working with the city to advance the redevelopment and revitalization of downtown Fort Wayne.
The Downtown Development Trust, utilizing its own resources and with support from the city and the Community Foundation, over the past four years purchased nine buildings on the Landing. The acquisition of each building was intended to allow, as much as possible, a streetwide redevelopment effort to occur while eliminating those forces that allowed existing buildings to fall into disrepair. Our board knew that a building here and a building there would not suffice if the eventual redevelopment was to satisfy the goals of the Downtown Blueprint.
By the same token, our board recognized the importance of trying to support existing businesses like Columbia Street West that have suffered, far too long, with the underperforming nature of Columbia Street.
An ideal partner
We then undertook an exhaustive search-and-interview process to find a developer with historical building redevelopment experience and that also had the wherewithal to assemble the complex financing necessary for what is now a project in excess of $32 million. Our search found Model Group from Cincinnati. Not only did Model have the most extensive historical building experience in all of Ohio for the past 15 years, but its rehabilitation of more than 250 historic buildings in Ohio, Kentucky and Indiana is a clear demonstration of its ability to similarly redevelop the Landing.
Best yet, Model's approach to the Landing was always to view the redevelopment from the eyes of what would make Fort Wayne unique unto itself, steeped in its rich history and looking ahead not with national-name retailers but businesses that know, love and are willing to embrace Fort Wayne and help make the Landing a place that once again becomes a trademark of Fort Wayne.
Knowing the financing for such an ambitious and high-risk project could never be satisfied solely on the basis of conventional financing, Model also brought to our community a wealth of experience in securing and working with historical building tax credits, new market tax credits and industrial recovery tax credits offered by federal and state governments.
In short, we found Model to have a real heart for wanting to make downtown Fort Wayne a great place to live, work and play.
Model's plans call for more than 60,000 square feet of new entertainment, retail and commercial space and, most important, up to 72 new residential units on the upper floors of the buildings designed for a growing class of young people wanting to live downtown. All are contemplated by the Downtown Blueprint. Their plan is to be under way with the project by the end of the year with completion by spring 2019. Leasing commitments have already been secured for almost half of the retail and commercial space.
There has been sustained interest demonstrated for the residential component. Already, new and substantive capital investment is occurring elsewhere on the Landing, even before Model's renovation work commences. This is proof positive that the goals of the Downtown Blueprint, the strategy employed by the Downtown Trust and the City, and the investment ready to be made by Model are going to pay dividends not just for the project itself, but for other areas of Columbia Street and beyond.
A financing Model
Yet, a few have questioned, in this newspaper and elsewhere, the wisdom of Model's financing on The Landing as well as the total cost of redevelopment. They wonder why Model would use Federal Historic Tax Credits, New Market Tax Credits and State Industrial Tax Credits or Regional Cities money for this project. The better questions to these same individuals are why should we not, as a community, take advantage of these tax credit programs offered by federal and state government and, second, whether there is another viable solution to transform a series of dilapidated buildings into a bold and special integrated mixed use development that is uniquely Fort Wayne? What is clear, over the past 40 years, is that the private market was unwilling to invest the dollars and take the financial risks to do something about the Landing. What is philosophically wrong with pursuit of Regional Cities money for these buildings?
These credits and state grants do not come from the city of Fort Wayne and exist to encourage precisely the type of exciting revitalization contemplated not just by Model, but again, by the Downtown Blueprint. The response, by those philosophically opposed to this type of financing, is always that more private money should be used. Yet, tax credit financing is nothing more than public incentives for private investment and risk-taking that carry real and significant exposure to both developer and investor alike. The private dollars invested in a project with the use of tax credits must be guaranteed by the developer in the event the project fails, so the developer's balance sheet must be strong enough to satisfy the investors. These private investments are real money and not a public handout.
Disregarding how tax credits work is not an excuse for denigrating high-risk, sophisticated redevelopment projects of historical buildings that hold the promise of helping to transform our existing urban core.
At a minimum, one first needs to walk through the buildings of the Landing (which we have offered) or visit a redevelopment project like Model Group's Over the Rhine in Cincinnati (which we offered) to first understand the complexities of preserving historical structures then finding the financial means to redevelop them when the private market is unwilling to do so on its own.
Deservedly so, the Landing project not only qualified for Regional City dollars made available by our state legislature, but also received the highest qualifying score of all projects within our region. These dollars, and the other federal block grant money in the project that will assure affordability of a portion of the residential units, are programs initiated by federal and state government. If our community is unwilling to compete for these dollars, they will go to other communities, and we will ultimately be the worse for it..
The local portion of Model's financing packagefor construction of the project amounts to only a little more than 10 percent of the overall cost, comprising a $2.5 million reimbursement made from tax revenue generated by the project (TIF), a net plus in the long run anyway, and a $1 million loan of Legacy dollars, also to be repaid. If this financing package, coupled with the Trust's work over the past four years, does not demonstrate good stewardship of this community's assets, we are left to wonder what else will achieve the same level of redevelopment as promised by this project.
No doubt, the same few naysayers are likely to hold firm to their position that the private market should determine the future of the Landing, and perhaps even downtown Fort Wayne, doubling down on philosophical disdain for public-private partnerships such as the Landing, which Model has proven successful in scores of other communities. This argument benefits no one in Fort Wayne or our region.
If the Downtown Blueprint means anything, to taxpayers and elected officials alike, it is that the private market only works when there are only conventional development risks. The higher the risk, the more the private market shies away from undertaking those risks.
Over the past four years, the Downtown Development Trust has witnessed the results of a disinterested private market – the disintegration of a portion of the core of our city, with net harm to our community. We have seen this with prior public safety incidents in one of the buildings we purchased; an owner of existing adult establishments being the proprietor of another; no owner being interested in redeveloping any of the upper floors of these empty buildings with any residential units; no owner showing any interest over the years in capital reinvestment; and absolutely no desire to harmonize their ownership interests in the Landing with the other investments being made in downtown Fort Wayne.
We have seen, up close and personal, the harmful and damaging effects of a disinterested private market. The Downtown Development Trust, as a private entity itself, is committed to nothing more than doing what we can, through public private partnerships with the City, the Capital Improvements Board, the Community Foundation, Greater Fort Wayne and others, to help create an environment where the private market, with a little incentive, can benefit our community rather than be a detriment to it. We believe this is exactly what will happen with redevelopment of the Landing.
With Model's commitment and experience, and with the help of our partners at the Community Foundation, the city and Greater Fort Wayne, the Landing will supply an integral part of the entertainment, commercial and housing needs of the Harrison Street Corridor and all as contemplated by the Downtown Blueprint. This project will preserve the historical integrity of the “great old Columbia Street” and will be a source of pride for this and many future generations to come.
Some will say we are fueling the creation of winners and losers with The Landing project by use of the financing structure we have chosen to follow for the project's success.
We don't see it that way. Rather, we believe that the “winner” in this situation will be all of the citizens of our great community, who would also end up being the “losers” if nothing is done at all.
We have witnessed the losing side the past 40 years of Landing neglect. We would rather be on the side that helps transform Columbia Street, west of Calhoun and east of Harrison, into a tax-generating community asset, an area that further builds the vibrant urban core of our downtown and that is also historically and instinctively Fort Wayne.
In short, we want to be on the side where the Landing, once again, will help lead the greatness of our community just as it did those so many, many years ago. The Downtown Blueprint, and our community, should expect no less.
Mac Parker is the President of the Fort Wayne Downtown Development Trust, Inc.