Developers say rehabilitation plans for some vacant and underutilized buildings in the urban core are only possible because of the redevelopment assistance.
The projects could result in tens of millions of dollars in new investment, create new jobs and attract businesses and residents to the urban core, officials said.
But some past projects in Dayton that were awarded tax credits failed to move forward.
And demand for the assistance is increasing and far exceeds the supply.
There is no guarantee that local projects that win awards will succeed. But developers said they have no chance without support.
Crawford Hoying Development Partners is relying on receiving the credits for its proposed renovation of the former Delco building near Dayton Dragons stadium.
“This project is not feasible without the tax credit,” said Matthew Starr, director of development for Crawford Hoying Development Partners.
The state’s rich architectural and industrial history provides unique redevelopment opportunities, and Ohio has the third most registered historic properties in the nation, said Joyce Barrett, executive director of Heritage Ohio.
“That is our advantage,” Barrett said. “We don’t have oceans, we don’t have mountains, but we do have historic properties we can make really cool places.”
But rehabilitation costs are often higher than the rental income developers can get from tenants who occupy the renovated spaces, Barrett said.
The Ohio Historic Preservation Tax Credit program bridges the gap between renovation costs and rents by providing a credit worth 25 percent of eligible expenses. And those awards typically supplement the federal historic preservation tax credit, which is worth 20 percent of a project’s cost.
Historic rehabilitation projects in Cleveland have benefited from $209 million in state tax credits since the programs have become available in the mid-2000s, according to data from the Ohio Development Services Agency. The credits have leveraged more than $1 billion in private investment and transformed the city’s downtown, Barrett said.
Cincinnati projects have received about $96 million in historic preservation awards. The city’s Over-the-Rhine neighborhood has become a dining and housing hot spot in part because of historic rehabilitation projects.
The state’s historic preservation awards also included $38 million for projects in Columbus, $26 million to projects in Akron and $17 million to projects in both Youngstown and Toledo.
Projects in Dayton have $5.8 million in current tax credit awards. Projects in Butler County’s Hamilton have won roughly the same amount.
These estimates, however, do not include awards for projects that were nixed.
Last year, the owner of the David building on Dayton’s East Third St. cancelled his plans to convert the property into 127 apartment units. The $4.3 million tax credit award was forfeited.
In 2008, the Merc, a development proposed for the old Dayton Power & Light steam plant building on East Third Street, was awarded a $2.8 million tax credit. But that project also failed to materialize.
Today, three Dayton projects have current tax credit awards, including the Centre City building at 40 S. Main St., which was given about $2.9 million in credits in late 2013.
The proposal called for converting the 244,000-square-foot building into 159 apartment units. Today, the building sits vacant.
In December, developers were awarded $1.9 million in historic tax credits to transform the abandoned Weustoff and Getz property at 210 Wayne Ave. into apartments.
The Kentucky-based firm said the project hinged on receipt of historic tax credits. Construction on the building is slated to begin this year, and the developer says it should be the first piece of a new mixed-use district.
And three more Dayton projects have applied for redevelopment assistance in the latest round of funding. The awards will be announced by early summer.
“It’s an important piece of the puzzle,” said Tony Kroeger, a senior planner with the city of Dayton.
The YWCA of Dayton at 141 W. Third St. has asked for $1.9 million in tax incentives for its $13 million renovation. The owner of the Dickey building wants $175,000 in tax credits for a $1 million overhaul of the office building at 124 E. Third St.
Crawford Hoying has requested $5 million in historic tax credits to convert the Delco building at 329 E. First St. into 129 apartments.
Starr said the $25 million project cannot succeed without historic tax incentives, and the firm will likely resubmit its application in the next round if no award is granted.
Starr said the state program has been crucial to reviving vacant buildings in Ohio’s urban centers that otherwise would not be rehabilitated.
And more local historic rehabilitation projects are in the pipeline.
Recently, the State Historic Preservation Office said it likely will support nominating the Grant Deneau Tower at 40 W. Fourth St. for placement on the National Register of Historic Places.
The designation would make the property eligible for state and federal tax credits, which the building needs to help finance a change of use, said Dave Williams, director of market rate housing with CityWide.
The plan is to convert the tower into a mix of housing and office space with some amenities on the ground floor, city officials said.
“Historic tax credits play a significant role in urban redevelopment opportunities,” Williams said. “(While) it takes time, the payoff provides for a significant equity source.”
And the David building, which lost its historic tax credits, was recently sold. The new owner has said he intends to pursue state tax credits to help finance a renovation of the building.
However, developers will have to contend with growing competition for limited dollars.
In the fall of 2012, the state received 25 applications requesting $37 million in tax credits. The state awarded $36 million to 23 applicants.
In the latest funding round, the state received 54 applications requesting $74 million. The state has about $30 million in tax credits to allocate.
“I believe it is our time,” said Amy Walbridge, Dayton’s special projects administrator.
It took 20 years for Cleveland to get to the point in redevelopment where it is today, Walbridge said.
The city of Dayton in recent years studied underutilized buildings downtown and identified some that could be turned into housing and mixed-use products, she said.
There is a local shortage of developers with experience and an appetite for adaptive reuse, but city officials are making connections with players in other parts of Ohio and the region, Walbridge said.
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