The Dayton area is in the midst of a “renaissance” where larger corporations have opened or expanded, millennials are lowering vacancy rates downtown, and small business and manufacturing growth is looking up, area business leaders say.
A Dayton Daily News examination of the area’s growth shows the Miami Valley is comparable to other like-sized metropolitan areas in Ohio and the Midwest, but to continue this economic stability local leaders say a lot hinges upon the continued revitalization of downtown Dayton.
“Our region really is only as strong as our urban core,” said Jeff Hoagland, president of the Dayton Development Coalition. “You can look at any community or region in the country, and you have to have a strong urban area to have a strong region.”
The growth in the Dayton area comes following a decade that includes the Great Recession where the Miami Valley loss several large companies, the housing market was crushed by foreclosures that caused median home values to drop dramatically and thousands of jobs were shed.
One of the hardest hit areas was downtown Dayton, but commercial and housing development since 2010 is quickly changing that. More than $520 million has been funneled into public and private sector investments since 2010 to transform the city — and another $530 million has been invested in projects underway or in the design phase.
And more than $350 million in other investments is projected in downtown through 2018, according to the Downtown Dayton Partnership.
“The investment is really starting to pick up in the core. We know things will continue into the pipeline,” said Scott Murphy, vice president of economic development for the Downtown Dayton Partnership.
Investing in the “front door”
The community will see more downtown growth in the next 10 years, said Sandy Gudorf, president of the Downtown Dayton Partnership.
It’ll take form in ways residents already recognize — a larger increase of small businesses focusing on technology and creative services, niche shops filling first-floor retail space, bars with specialties craft beers and restaurants with food only found in Dayton, Gudorf said.
“We call downtown the front door of our community,” Gudorf said. “How vibrant are our arts? What about restaurants and amenities? How active are we for a community our size?”
Two demographics are driving the need for more housing in the city — millennials and empty-nesters. Currently, the total occupancy rate for housing in downtown is 97 percent, according to the downtown partnership.
Charles Simms, owner of Charles Simms Development, said most parts of downtown are smart areas for investment. His company has developed apartments like the Brownstones at 2nd and Monument Walk. In July, he also announced a $4.2 million housing project called City View, located at Fourth Street and Patterson Boulevard.
“The city has done an excellent job at preparing downtown,” Simms said. “The key is, once there’s housing, the restaurants and retail will follow. Younger people want to live in an urban environment that’s close to amenities. It’s the live, work, play sentiment.”
He and other developers are filling the demand for more housing downtown — with other projects including the Delco Loft Apartments overlooking the Dayton Dragons stadium, the Art Lofts in the Dayton Arcade, the Flats at South Park and the Water Street Flats.
In the last 12 months, 239 new units have come into the downtown core, and 418 more are in the pipeline.
Chris Kershner, vice president of public policy and economic development for the Dayton Area Chamber of Commerce, said businesses wanting to invest in downtown is part of a shift in culture.
“People want to live where they work and where they play,” Kershner said.
Jason Harrison, owner of Present Tense Fitness, said he moved back to the Miami Valley in 2015. Now, he and his wife own a fitness club and live in the Oregon District.
As a Huber Heights native, he moved home to be close to family after stints in cities across the U.S. While the bureaucracy of starting a business in Dayton was overwhelming, he said the benefits have outweighed any negatives experiences.
They initially intended on opening their space at 133 E. Third St., but it proved to be too difficult and time-consuming to get the property ready for business. Harrison ran into a building owner he knew in the Oregon District and, now, the fitness club is open at 222 E. 6th St.
“We learned a lot just from trying to obtain permits and working with inspectors and architects,” he said. “But there’s also that small-town mentality where there’s a business community that’s tight knit and stays together.”
The total occupancy rate is about 86.9 percent for “move-in ready” downtown spaces of first floor properties — often used for businesses like brewpubs, boutiques, restaurants and specialty shops, according to the downtown partnership.
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The total occupied square footage of first-floor business space is up more than 14 percent compared to 2010 — with about 488,668 square footage filled.
The Miller-Valentine Group Realty Office survey tracks 42 office buildings in the central business district. Of the 4,582,508 square footage sampled, more than 32 percent of that is vacant.
Gudorf said small businesses are filling that vacant space 2,000 or 3,000 square feet at a time, while larger businesses like CareSource and Premier Health provide economic stability.
“Downtown, it’s the economic engine that services the region,” Gudorf said. “A healthy downtown is critically important for the region. We’re seeing our work, the community’s focus, keep chipping away toward success.”
Challenges with perception, workforce development
Jessica Blimbaum of Springboro wanted to get out of the Miami Valley. After graduating from Ohio University, she said she left her hometown of Vandalia to see what else was out there. After starting her career in Washington, D.C., she found herself struggling to keep up with the cost of living and missing the small-town feel of Ohio. A year later, she moved home.
Dayton’s cost of living index, which measures the price levels of consumer goods and service, was 97 percent in the second quarter of 2016. The U.S. average is 100 percent.
Blimbaum said there’s a pervasive and ingrained perception that Dayton isn’t for young people.
“I had that perception,” she said. “I didn’t have that appreciation until I left and came back.”
Coupled with notions of rampant crime downtown and a bleak environment for entertainment, regional leaders still have work to do to promote the area.
“We’re breaking down those perceptions,” Gudorf said. “I’ve seen this change over the last couple of years. When investors come in town, they were just looking for good deals before. Now, they’re looking at it as a great place to invest.”
As companies grow, Dayton faces one of its most complex issues — finding and retaining a skilled workforce for the jobs created by expansion. Ohio’s unemployment rate dropped to 4.7 percent in August, but industries across the board are struggling to find skilled employees to fill positions.
“I think it’s going to be an issue finding skilled workers anywhere in Ohio,” Hoagland said.
From cybersecurity to construction, companies are saying they cannot fill positions. In Ohio alone, 78 percent of construction firms said they’re having issues filling some hourly positions, according to a survey from The Associated General Contractors of America.
Doug Barry, president of Barry Staff, told the Dayton Daily News last month that as more businesses enter the Miami Valley, it will be harder to find workers.
“We’ve had a severe shortage of employees,” he said. “There is a shortage of skilled workers. But I have employers say, ‘Show me someone with initiative and I can show them what to do.’”
To address the shortage, companies have partnered with statewide initiatives from JobsOhio and higher education institutions like University of Dayton and Sinclair Community College.
The region should be enticing, too, for employees considering a position in the area, local leaders said.
“You can actually afford a nice house here and you’re not sitting in traffic or a commute for hours just to get home,” Kershner said. “It’s that quality of life aspect, where you’re not missing out on the things that are important to you.”
Expansion in the Miami Valley
Expansion has reached beyond the core of downtown, as businesses vie for property along the I-70 and I-75 corridors. The Dayton region has seen the lowest vacancy rates for industrial properties since the early 2000s — resulting in building development that’s expected to continually increase.
“I think the most important thing for our pitch is we are very strategically located in the U.S.,” said Marty Hohenberger, vice president of business development for the Dayton Development Coalition. “You can reach 60 or 70 percent of manufacturing operations in the U.S. from where we are.”
The vacancy rates reflect a resurgence in the industrial and manufacturing sectors, according to a report from the Miller-Valentine Group. The vacancy rate for industrial properties has dropped to about 12 percent in Dayton this year, a drop from 14 percent in 2015.
“We were able to grab and attract a company like Fuyao Glass in Moraine, Ohio. It’s the North American headquarters,” Hoagland said. “They’ve invested more than $480 million, and have more than 1,600 employees here. That is a game changer — not just for the Dayton region, but for the state.”
As companies — like Fuyao Glass America and Yaskawa Motoman in Miamisburg — expand in the area, the supply chain grows and impacts local companies’ revenues. Hoagland said either local companies grow to meet the demand or the region attracts new companies to fill product voids.
Hoagland said that expansion extends beyond Montgomery County, as businesses have located in Greene, Miami and Clark counties.
“It’s a strategy. We have a very strong, concentrated effort in the retention and expansion of business,” he said. “Our counties, our cities — they’re very in touch with local businesses. They take care of their own, and they take care of local companies.”
Kershner said the Miami Valley has the “perfect storm of access to transportation options,” with access to I-75, railroad transportation and an international airport. It’s an opportunity that manufacturing, logistics and distribution companies can’t pass up.
“They’re choosing strategically to be part of the fabric of this community,” he said.
When Blimbaum moved back to the Miami Valley, she immediately got involved in community outreach and eventually became chair of Generation Dayton, a young professionals initiative of the Dayton Area Chamber of Commerce.
She said the initiative ignites passion and community within a group of future leaders. It’s the next generation investing in business, quality of life and service in the Miami Valley.
Blimbaum said it’s her favorite question to answer: “Why Dayton?”
It gives her the opportunity to talk about the network of support in her professional life, the money she saves in housing and transportation, and the hidden gems of entertainment throughout the city. She tells them about the “easy life” she’s built that she doesn’t need a vacation from.
“You can feel the culture, you can feel the excitement,” Kershner said. “Dayton is not what it was 30 or 40 years ago, and it shouldn’t be that. We’re not afraid to change and evolve.”
The Dayton Daily News examined federal economic data from the past decase to compare Dayton to other like-sized cities in Ohio and the Midwest.