Economic Development

By Kevin Flynn

• Develop Both Residential and Business.
• Partner with the Private Sector.
• Provide Safeguards and Protection for City Investment.

Cincinnati City Council has been involved in residential redevelopment for our city. The redevelopment of deteriorating neighborhoods is, and should be, an important goal of our city government. If people do not live here, our city will die. Redevelopment projects like the Gateway Quarter in Over the Rhine and Walnut Woods, in Walnut Hills, if done right, will be a key to the revitalization of our city, and can be, if done properly, shining gems in the Queen City's crown. When public money is spent on private redevelopment (whether directly, as in Walnut Woods, or indirectly through 3CDC, as in the Gateway Quarter), safeguards need to be implemented to protect the expenditures and to protect the integrity of the project.

The Gateway Quarter has used public monies prudently and efficiently. Dollars spent have been paid back and `recycled' into further redevelopment. Walnut Woods has not used the more than $2,500,000.00 in city money either prudently or efficiently. The city continues to spend money on this project and never should have gotten involved in the Walnut Woods project 24 years ago without a clear exit strategy.

Redevelopment projects are labor intensive, not just for the developer doing the construction, but for the guardians of the construction funds as well. If done correctly, the city will benefit with renewed housing stock that will spur further redevelopment, an increased tax base from both the real property taxes and the income taxes generated by the work and the eventual homeowner, a safer community with owner occupied homes instead of abandoned buildings, and repayment of the funds advanced by the city to be recycled into new redevelopment projects. However, if a private residence will sell, in the best of times, for less than one-half of what it costs to build/renovate, it is not a project that the city should get involved in.

Redevelopment projects need to be underwritten just as a private construction project should be. The credit worthiness of the developer and the private financing partner need to be evaluated. Plans, specifications, and budgets should be presented and reviewed by experts prior to the commitment of public funding. Private investment dollars constituting at least 25% of the budgeted cost should be secured and spent in the project before public or private loan funds are expended. Prior to each monthly disbursement of funds, a professional inspection of the work completed should be conducted, the amounts to be disbursed should be verified as having been incorporated in the project, and an estimate of the cost to complete the project should be obtained. If the developer has spent more on the project than the budget provides for the construction up to that date, private funds need to be put into the project so that there is always enough money left in the public funding to complete the project.

With proper planning and execution, redevelopment projects can be a win for the developer (a reasonable profit), a win for the homeowner (a beautiful, updated home with turn of the century craftsmanship), and mostly, a win for the people of Cincinnati (revitalization of a neighborhood, increased public safety with owner occupied homes, increased tax base, and repayment to the city for future projects). When I am elected to City Council, the city administration will put proper procedures in place to guard your tax dollars while effectively and efficiently revitalizing neighborhoods by partnering with both private developers and non-profit entities to redevelop appropriate projects in our city and bring a shine to the Queen City's crown.

Business

A city without significant businesses in it will struggle to survive, especially a city like Cincinnati that depends on its earnings and net profits tax for a large part of its general fund revenue. The city is starting to do a better job of redevelopment by partnering with the private sector and allowing the market to determine the structure of development rather than `shoehorning' a project into a space that the market doesn't think is suitable. The Gateway Quarter is a good example of this type of public private partnership. The Go Cincinnati Plan is another example of sound planning for development, and used the strengths of many Cincinnati volunteers in reaching its conclusions.

The city has, all too often, not required, done its own due diligence, or followed through, in regard to the viability of a development or redevelopment plan, allowing political considerations to direct the decisions on spending millions of dollars in public monies without taking the proper precautions to make sure that the project has the ability to succeed and improve the overall wellbeing of the city. One of the first projects I worked on as a law clerk in 1985 was the development of what was then called Fountain Square West. It is now the location of Macy's. At the time, it was supposed to be the crown jewel for the Queen City. A 53 story office building atop multi tenant new retail (at the time Shillito's, a predecessor to Macy's was still located on 7th Street), with restaurants and unique shopping opportunities. The problem was, there was no private market for this product and the city moved so slowly, that it was over a decade before a much scaled down, and much more heavily publicly supported development became a reality. A current example of this kind of impotent development strategy can be found at the surface parking lot at 5th and Race Streets. The location housed an office building, restaurants and retail (and at one time, a 1600 person capacity night club where I used to be a bartender) before the city acquired the site and tore the building down years ago to make room for more big box retail which never materialized.

The city must develop a Can Do attitude toward encouraging private development, not an Our Way or the Highway mentality. There are methods that the city could utilize under existing law to preserve our housing stock, improve the livability of our housing, and encourage small business generation in our city, at significantly less cost than what we are spending on failed developments today.