Because this is how corporate welfare works. A big company says "give us tax breaks or else we'll go somewhere else" -- and usually they aren't bluffing because there are other cities willing to give them those same tax breaks. So, I can't really fault Cincinnati or Western & Southern for playing the game, because that's just how the game is played. The only way this type of thing will end is with a federal policy that prevents all of these tax breaks and poaching between neighboring cities.

Because this is how corporate welfare works. A big company says "give us tax breaks or else we'll go somewhere else" -- and usually they aren't bluffing because there are other cities willing to give them those same tax breaks. So, I can't really fault Cincinnati or Western & Southern for playing the game, because that's just how the game is played. The only way this type of thing will end is with a federal policy that prevents all of these tax breaks and poaching between neighboring cities.

 

Exactly.  States and municipalities should be very limited in what, specifically they can tax (at variable amounts) in order to reduce this zero-sum competition.  It's a bigger problem in the eastern part of the country, where the states are smaller, than it is for California, specifically.  It's very rare that a company picks up from California or elsewhere in the west and moves east.  Recently, Boeing moved from Seattle to Chicago and Toyota is moving from LA to Dallas, but there is much more movement in the east. 

 

 

 

 

Because this is how corporate welfare works. A big company says "give us tax breaks or else we'll go somewhere else" -- and usually they aren't bluffing because there are other cities willing to give them those same tax breaks. So, I can't really fault Cincinnati or Western & Southern for playing the game, because that's just how the game is played. The only way this type of thing will end is with a federal policy that prevents all of these tax breaks and poaching between neighboring cities.

 

This happens all of the time across the region and across the country, this project is nothing special when it comes to that, but after the tax break is realized, the city does benefit greatly.  People seem to focus on the one negative impact instead of weighing in the pro's as well. 

 

It was stated from an economic development study, that stated the annual economic impact of the high-rise would be $1.66 billion. The study was conducted by the University of Cincinnati’s Economics Center for Education and Research, and concluded that the building would generate or retain 8,655 jobs worth a total of $388 million annually and that its three-year construction would contribute $715 million to the local economy, as well as 5,388 jobs worth $3.7 million in wages. Upon completion, the tower would contribute $7.7 million in annual tax revenues.

Here's another way to look at it.

 

The most valuable building in downtown won't pay any net new property taxes to the city or county until it is a 30 year old building.

 

I can't say that I know the exact specifics on this project and if the $54M is amortized over 30 years, but even with knowing what we do you are focusing on only one aspect of this project.  This building is generating a lot more than that $54 million that it's not receiving or wouldn't have received without this building.  This is done all the time.

I believe I understand how the TIF works.  You seem to imply that because it is simply tax money that wouldn't be there if it weren't for the development then it doesn't count as public spending I disagree, because, the development wouldn't be there without the TIF money! The other part that I believe you're forgetting is this project, as far as I'm aware, just moved companies from other downtown office buildings.  That means those other property owners can (and do) get their tax liability reduced because their building are now worth less.  So are you accounting for those losses?

 

No, your tax liability for the building doesn't get reduced because a tenant leaves.  Also, why would you think the buildings are worth less?   

Commercial buildings and apartment buildings are valued depending on their current revenue from tenants.  If two identical buildings stand across the street from one another, and one is collecting $100,000/mo in rent and the other is collecting zero, obviously the one collecting rent at this very moment is worth more, even if the empty one can be filled in a year. 

 

What's more, when a commercial office building like the 580 Walnut Building converts from office to apartments, the city loses most of the earnings tax revenue it was formerly collecting.  So if 580 Walnut goes from 1,000 workers all paying city earnings tax to 250 residents, only half of whom are paying city earnings tax (some residents are retired, housewives, or kids), then obviously the city is out huge $'s. 

Commercial buildings and apartment buildings are valued depending on their current revenue from tenants.  If two identical buildings stand across the street from one another, and one is collecting $100,000/mo in rent and the other is collecting zero, obviously the one collecting rent at this very moment is worth more, even if the empty one can be filled in a year. 

 

What's more, when a commercial office building like the 580 Walnut Building converts from office to apartments, the city loses most of the earnings tax revenue it was formerly collecting.  So if 580 Walnut goes from 1,000 workers all paying city earnings tax to 250 residents, only half of whom are paying city earnings tax (some residents are retired, housewives, or kids), then obviously the city is out huge $'s.

 

That is not true.  The only institution that looks at what a buildings value is based on tenant occupancy are banks when it comes to borrowing for a loan because they want to see that the building has a current flow of income, but it doesn't change the value of the property.  I have owned apartment buildings and my family and friends still own apartment buildings and trust me when I say they have tried to get their taxes lowered because of low occupancy when there was a slump and it doesn't work that way.  The city will not lower you taxes just because you have issues renting to people or because you're not making enough income on you buildings.

 

Now when a building is converted from office to living space yes there is a different tax structure.  But the gains that the new office building bring in far out weighs that variance.  We would never be allowed growth and our downtown market would be stagnant because of hanging on to something much smaller.  If Great American pulled 1000 out of that building, but in turn put 2000 in the new tower only filling it 1/2 way, then that means you probably pulled another 2000 or so from other areas.  All of those areas that QCS pulled from get back filled with tenants that do not require or want to pay the sq ft price that QCS charges.  There are always people coming into the market to fill what somebody else left.     

Commercial buildings and apartment buildings are valued depending on their current revenue from tenants.  If two identical buildings stand across the street from one another, and one is collecting $100,000/mo in rent and the other is collecting zero, obviously the one collecting rent at this very moment is worth more, even if the empty one can be filled in a year. 

 

What's more, when a commercial office building like the 580 Walnut Building converts from office to apartments, the city loses most of the earnings tax revenue it was formerly collecting.  So if 580 Walnut goes from 1,000 workers all paying city earnings tax to 250 residents, only half of whom are paying city earnings tax (some residents are retired, housewives, or kids), then obviously the city is out huge $'s. 

 

In this case the WS employees just went down the street to a new building, so the city still gets the income tax. And with new residents moving in that is a net gain from a taxing authority point of view.

I believe I understand how the TIF works.  You seem to imply that because it is simply tax money that wouldn't be there if it weren't for the development then it doesn't count as public spending I disagree, because, the development wouldn't be there without the TIF money! The other part that I believe you're forgetting is this project, as far as I'm aware, just moved companies from other downtown office buildings.  That means those other property owners can (and do) get their tax liability reduced because their building are now worth less.  So are you accounting for those losses?

 

No, your tax liability for the building doesn't get reduced because a tenant leaves.  Also, why would you think the buildings are worth less?   

 

Yep, if you lose tenants and income your tax liability usually remains the same. If you want it reduced you have to file an appeal, prepare documentation,

and present your case to the appropriate authority. I just helped a client with a case in Downtown Dayton and we won an appeal. Lowered their real estate taxes by over 40%.

Almost everyone that goes in front of the Hamilton County Board of Revisions and asks to have their property tax lowered succeeds. So, when it comes time to property taxes to actually be paid on QCS, watch them go to the board of revisions and get its tax valuation cut it half.

Commercial buildings and apartment buildings are valued depending on their current revenue from tenants.  If two identical buildings stand across the street from one another, and one is collecting $100,000/mo in rent and the other is collecting zero, obviously the one collecting rent at this very moment is worth more, even if the empty one can be filled in a year. 

 

What's more, when a commercial office building like the 580 Walnut Building converts from office to apartments, the city loses most of the earnings tax revenue it was formerly collecting.  So if 580 Walnut goes from 1,000 workers all paying city earnings tax to 250 residents, only half of whom are paying city earnings tax (some residents are retired, housewives, or kids), then obviously the city is out huge $'s.

 

That is not true.  The only institution that looks at what a buildings value is based on tenant occupancy are banks when it comes to borrowing for a loan because they want to see that the building has a current flow of income, but it doesn't change the value of the property.  I have owned apartment buildings and my family and friends still own apartment buildings and trust me when I say they have tried to get their taxes lowered because of low occupancy when there was a slump and it doesn't work that way.  The city will not lower you taxes just because you have issues renting to people or because you're not making enough income on you buildings.

 

Now when a building is converted from office to living space yes there is a different tax structure.  But the gains that the new office building bring in far out weighs that variance.  We would never be allowed growth and our downtown market would be stagnant because of hanging on to something much smaller.  If Great American pulled 1000 out of that building, but in turn put 2000 in the new tower only filling it 1/2 way, then that means you probably pulled another 2000 or so from other areas.  All of those areas that QCS pulled from get back filled with tenants that do not require or want to pay the sq ft price that QCS charges.  There are always people coming into the market to fill what somebody else left.

 

Go check some of the valuations for buildings where tenants left for QCS and see if the valuations have changed.  That's the metric that matters.

 

I'm not sure how you believe that consolidating all the downtown American Financial Corp workers to one building from four or five, and moving Frost, Brown, Todd from the corner of Main & Fifth to Sycamore and Fourth makes any difference for the City in terms of revenue if those spaces aren't occupied.  Unless you're adding workers into the slack you've created, you can't be making any extra money.  The reason the City abates properties is because the payroll tax is more valuable to the City than the property assessment.  So unless you're adding workers, you're not making any money.  That's why the GE news was such a big deal, because it unequivocally brings new workers into the City.

^American Financial Group was VERY close to moving out to Mason.  QCS was the bargaining chip to get them to stay, so they could consolidate into one class A+ building.  IF QCS wasn't built, do you think the tenants that moved would have stayed in their current buildings for perpetuity? Downtown had to compete with the new competition in Kenwood/Blue Ash/Mason, and new construction was needed after 20+ years of stasis.

 

I also think QCS made other buildings step their game up, so to speak.  Just as 21C's opening forced the Westin, Hyatt, Hilton, and Cincinnatian to do updates, QCS has caused other office buildings to renovate or convert to other uses.  Several older class B and C commercial buildings have been converted to residential or hotels, which lowers the vacancy rate for downtown and normalizes the market after QCS shook things up a bit.

That's why the GE news was such a big deal, because it unequivocally brings new workers into the City.

 

Yes, I'm also glad they chose Cincy. From my understanding, when GE finally made a decision between Texas and Cincinnati one of the leaning factors in Cincinnati's favor was that Cincinnati had enough available space to occupy immediately because of the space left open in Atrium II of which they now occupy before they open up their HQ being built at the banks.  They wanted to open up a HQ immediately.  Several companies have moved downtown or expanded in the last rfew years because there was space available.  If you have everything leased up it doesn't give any room for growth.   

I'm not sure how you believe that consolidating all the downtown American Financial Corp workers to one building from four or five...

 

American Financial Group consolidated from six buildings to three. The primary driver was to vacate the 580 Building (where the lease was up) and place all the Property & Casualty employees in one location, something none of the six buildings could do. And yes, there were large chunks of land at their disposal in the northern suburbs.

^American Financial Group was VERY close to moving out to Mason.  QCS was the bargaining chip to get them to stay, so they could consolidate into one class A+ building.  IF QCS wasn't built, do you think the tenants that moved would have stayed in their current buildings for perpetuity? Downtown had to compete with the new competition in Kenwood/Blue Ash/Mason, and new construction was needed after 20+ years of stasis.

 

I also think QCS made other buildings step their game up, so to speak.  Just as 21C's opening forced the Westin, Hyatt, Hilton, and Cincinnatian to do updates, QCS has caused other office buildings to renovate or convert to other uses.  Several older class B and C commercial buildings have been converted to residential or hotels, which lowers the vacancy rate for downtown and normalizes the market after QCS shook things up a bit.

 

Very much agree, I'm glad it was Cincinnati's gain.  Also with other buildings stepping up their game or using them for something else.  Downtown needed the QCS shakeup.         

^American Financial Group was VERY close to moving out to Mason.  QCS was the bargaining chip to get them to stay, so they could consolidate into one class A+ building.  IF QCS wasn't built, do you think the tenants that moved would have stayed in their current buildings for perpetuity? Downtown had to compete with the new competition in Kenwood/Blue Ash/Mason, and new construction was needed after 20+ years of stasis.

 

I also think QCS made other buildings step their game up, so to speak.  Just as 21C's opening forced the Westin, Hyatt, Hilton, and Cincinnatian to do updates, QCS has caused other office buildings to renovate or convert to other uses.  Several older class B and C commercial buildings have been converted to residential or hotels, which lowers the vacancy rate for downtown and normalizes the market after QCS shook things up a bit.

 

I think AFG owns a good chunk of ground in Warren County. City was lucky to keep them downtown.

Noticed this week that the remaining tan light posts, mostly along 2nd & 3rd Streets, are finally being painted black. Most all in the CBD were painted just before the World Choir Games.

Good.  I think the black looks much better.

Same. Tan/beige/brown is one of the worst color groups out there and makes anything, no matter what it is, look bad. It was such an unflattering color. Black still blends into the background but looks significantly better.

The tan poles blended a lot more than the black with all the limestone and concrete downtown.  It doesn't age so well, I'll grant that, but the black really makes the poles stand out to me.   

But why blend? That word just in and of itself is problematic. Street infrastructure that is decent looking (I actually quite like the Downtown traffic lights in a retro sort of way) isn't made of stone, so why should it blend with stone? If we made everything blend we'd be left with a giant bland palate, something the Midwest suffers from as it is. They stand out more, sure, but black ages well and the fact that they don't blend in with the stone is a positive in my mind.

^American Financial Group was VERY close to moving out to Mason.  QCS was the bargaining chip to get them to stay, so they could consolidate into one class A+ building.  IF QCS wasn't built, do you think the tenants that moved would have stayed in their current buildings for perpetuity? Downtown had to compete with the new competition in Kenwood/Blue Ash/Mason, and new construction was needed after 20+ years of stasis.

 

I also think QCS made other buildings step their game up, so to speak.  Just as 21C's opening forced the Westin, Hyatt, Hilton, and Cincinnatian to do updates, QCS has caused other office buildings to renovate or convert to other uses.  Several older class B and C commercial buildings have been converted to residential or hotels, which lowers the vacancy rate for downtown and normalizes the market after QCS shook things up a bit.

 

That's great.  Maybe you're right about the Mason thing.  If that's actually how it worked out, then fantastic.  But it's only to Cincinnati's gain if the City recoups more tax revenue than amount the spent/abated.

It also assumes there were two options. Subsidize the tower all the way, or AFG moved to Mason.

 

There would be huge costs for AFG to make a move like that. Huge costs.

 

The city could have given a shorter abatement, etc.

So you're saying the city was a poor negotiator? I'm shocked!!  :roll:

Did the city recently widen 5th street in front of P&G, east of Broadway? The outer foot and a half of the sidewalk looks new, and there is a suspicious dip in the street pavement just on the edge. I'd add pictures but my computer is being silly at the moment.

^ It's already a monstrous seven lanes wide to begin with, how can it get any wider?  Maybe some utility work, or repairing busted curbs (they're pretty bad on the P&G side of the street). 

The curb was in really bad shape on that block and that's what they've been working on. They rebuilt the edge of the sidewalk and the curb.

Curb rebuilds are happening in several places downtown. Walnut Street as part of the Streetcar project; also in other places like 5th Street, Pete Rose Way. Another crew is going around and repairing the old brick paver sidewalks that have deteriorated since the last All-Star Game.

Kessler Enterprise is planning a $40 million luxury hotel, to be called The Grand Bohemian, at the corner of Sycamore and 6th in the old P&G building. 

 

http://www.bizjournals.com/cincinnati/news/2015/06/16/40m-luxury-hotel-in-the-works-for-downtown.html?ana=e_cinci_bn_breakingnews&u=jwmf03J+9tCeITf+6kZ15A0e430e28&t=1434470683

 

Kessler Enterprise Inc., which is known for its boutique and luxury hotels, wants to turn the office building at 299 E. Sixth St. into a 125-room, independent hotel. Richard Kessler, president and CEO of the Orlando-based company, said this would the top hotel in the region.

...

One feature that would make the hotel unique is a planned rooftop ballroom. While the Residence Inn at the Phelps now has two rooftop bar areas and the AC Marriott at the Banks is planned to have a rooftop bar, Kessler said he is planning a ballroom on top of the building where guests would be able to view the city, then walk out to balconies outside.

 

 

New thread created in Southwest Ohio Projects & Construction: Cincinnati: Downtown: Grand Bohemian Hotel Cincinnati (299 E. Sixth Street)

In this article about the Cincinnati Shakespeare Company planning to move to OTR, it mentions that their current home in the Garfield Tower at the corner of Race and Garfield was originally built as a movie theater. Does anybody know if (and for how long) the space ever functioned as a movie theater?

 

http://www.cincinnati.com/story/life/2015/06/16/homeless-hamlet/28829115/

 

I don't know that, but I love CSC and am excited about them potentially moving to OTR!

In this article about the Cincinnati Shakespeare Company planning to move to OTR, it mentions that their current home in the Garfield Tower at the corner of Race and Garfield was originally built as a movie theater. Does anybody know if (and for how long) the space ever functioned as a movie theater?

 

http://www.cincinnati.com/story/life/2015/06/16/homeless-hamlet/28829115/

 

 

You can get the book “Stepping Out in Cincinnati” as a free e-book from the library. That would be the place to look when it comes to theaters. I just read it on an airplane a month ago and I don’t remember seeing anything about Garfield Tower, but I’m always half asleep on planes so that doesn’t mean it wasn’t in there.

I remember the theatre in the Garfield.  I believe it was called "Real Movies" or something like that, probably closed in the late 80s or early 90s.  Showed second run and indie stuff, a showing of Rocky Horror every weekend.

Yeah I remember the exterior of it well because it was opposite The Blue Wisp, which I went to dozens of times, but I never went to it or its famous(?) production of Rocky Horror.  I remember that it claimed to have the third longest-running production of Rocky Horror going back to the year after the movie came out, or thereabouts.  If it was still going they could bring the house down if they got Cranley to cameo as Meatloaf. 

Suburban developer opens downtown office to give urbanites the HGTV treatment

Jun 29, 2015, 2:02pm EDT 

Andy Brownfield 

Cincinnati Business Courier

 

A West Chester residential developer has opened a downtown office to give Cincinnatians in the urban core a different way to find, remodel and finance homes.

 

Christopher Michael Group, a sister company to the West Chester-based Christopher Michael Homes, opened a new office at 227 W. Ninth St. Christopher Michael Homes has been operating in West Chester since 1998.

 

http://www.bizjournals.com/cincinnati/news/2015/06/29/suburban-developer-opens-downtown-office-to-give.html

^ A lot to take away from that article.

 

This was interesting: "Believe it or not, there’s a great deal of property that’s not controlled by 3CDC."

 

Do people really think 3CDC owns all of OTR? Do people realize how huge OTR actually is? (No, they do not.)

 

But this quote was pure gold: "I live in West Chester and founded the company in West Chester, but the vibe is obviously downtown."

I think to a lot of people (most casual weekend visitors) OTR Is purely Main and Vine south of Liberty and Washington Park.. So when the media reports something that happens in the far north sections of OTR people naturally assume it happened in the areas that are more popular at this point.

I've seen a Google Maps car zigzagging through downtown today. All-Star game related? Not sure how often they do updates... Currently it appears that south of 6th Street was last updated in July 2014, north of 6th Street was September 2014.

They seem to refresh the Street View imagery pretty often these days. You can click on the little time machine icon to go back to previous street views. At this spot on Main Street, there is imagery from July 2014, April 2012, Oct. 2011, Sep. 2011, May 2011, Aug. 2009, and July 2007.

EXCLUSIVE: Longtime downtown Cincinnati engineering firm moving its office

Jul 9, 2015, 11:15am EDT 

Tom Demeropolis 

Cincinnati Business Courier

 

Fosdick & Hilmer Inc., an engineering services firm that has been in downtown Cincinnati for 110 years, is moving.

 

The firm is relocating to the newly named Huntington Center, formerly known as 525 Vine, from 309 Vine. The company signed a 13-year lease for about 16,400 square feet of space. It will occupy the entire 11th floor.

 

http://www.bizjournals.com/cincinnati/news/2015/07/09/exclusive-longtime-downtown-cincinnati-engineering.html

432 Walnut (The Traction Building) is looking to get historic designation so that it can apply for historic tax credits, to renovate the building into commercial residential use.

 

Lots of details on the building, including an in-depth history of the building starting on page 50 of the Planning Commission's July 17 packet: http://www.cincinnati-oh.gov/planning/about-city-planning-buildings/city-planning-commission/jul-17-2015-packet/

Kessler Enterprise is planning a $40 million luxury hotel, to be called The Grand Bohemian, at the corner of Sycamore and 6th in the old P&G building. 

 

http://www.bizjournals.com/cincinnati/news/2015/06/16/40m-luxury-hotel-in-the-works-for-downtown.html?ana=e_cinci_bn_breakingnews&u=jwmf03J+9tCeITf+6kZ15A0e430e28&t=1434470683

 

Kessler Enterprise Inc., which is known for its boutique and luxury hotels, wants to turn the office building at 299 E. Sixth St. into a 125-room, independent hotel. Richard Kessler, president and CEO of the Orlando-based company, said this would the top hotel in the region.

...

One feature that would make the hotel unique is a planned rooftop ballroom. While the Residence Inn at the Phelps now has two rooftop bar areas and the AC Marriott at the Banks is planned to have a rooftop bar, Kessler said he is planning a ballroom on top of the building where guests would be able to view the city, then walk out to balconies outside.

 

 

 

This deal is dead.

There's construction scaffolding up around 33 W Fourth St (at corner of Race and Fourth). Anybody know what's going on? The building has been owned by "MMF Realty LLC" since 2008, when it was transferred to them by the City for $0.

 

I noticed this as well... I think it has been up for at least a week or two. Hope someone is planing on utilizing this building.

We need more development between 3rd and 5th to help bridge the gap to The Banks.

 

Fun story, but at one point there was apparently a tower in the works on the site just south of this building. The old Pogue's building would be demolished and a hotel and apartment tower was proposed for the site. It would have been a Drury Suites. Not sure how far this proposal ever got since I had never heard of it and stumbled upon it looking at this architect's website the other day.

 

http://www.mullerarchitects.com/project-4/

 

They also did a proposal for the Gateway Garage in OTR which was a lot more....busy.

We need more development between 3rd and 5th to help bridge the gap to The Banks.

 

Fun story, but at one point there was apparently a tower in the works on the site just south of this building. The old Pogue's building would be demolished and a hotel and apartment tower was proposed for the site. It would have been a Drury Suites. Not sure how far this proposal ever got since I had never heard of it and stumbled upon it looking at this architect's website the other day.

 

http://www.mullerarchitects.com/project-4/

 

They also did a proposal for the Gateway Garage in OTR which was a lot more....busy.

 

Drury still owns the old Pogue's warehouse and the parking lot just south of it. Despite the recent hotel boom downtown, they haven't done nor proposed anything for the site that I'm aware of.

 

I tried to contact them for permission to photograph some of the current warehouse space, once, but no one would take my calls or answer my emails.

There's construction scaffolding up around 33 W Fourth St (at corner of Race and Fourth). Anybody know what's going on? The building has been owned by "MMF Realty LLC" since 2008, when it was transferred to them by the City for $0.

 

 

Richter & Phillips is moving from across the street into the building.

^You're thinking of Sixth and Main. This is Fourth and Race.

They had to put that scaffolding up because orders were written against the building for its deteriorating condition.  That $0 sale was negotiated by Chris Bortz and had absolutely no clawbacks for non-development.  Totally idiotic move to help some friends out.