Cleveland, Columbus, and Cincinnati are rebuilding their urban cores to lure and retain young professionals. These cities are pursuing development strategies that reflect the distinct character of each place. Is it the beginning of a Rust Belt rebound? By Christopher Bentley
Ohio’s three largest cities—Columbus, Cincinnati, and Cleveland—are reinvesting in their urban cores, eager to capitalize on a renewed interest in city living. Development corporations, land trusts, and local governments are orchestrating a flurry of development that has taken off in neighborhoods once considered ghost towns or worse. It could signal a transformational moment for the region, as areas known for sprawl make long-term bets on the city in an attempt to rebuild hollowed-out tax bases.
But is the deck stacked against them? Redevelopment tends to carry more additional costs—demolition, environmental inspections—than turning green fields into suburbs. And mass exoduses have left many Rust Belt cities with aging infrastructure and housing stock whose repair bills and vacancy rates are outsized even for rebounding urban areas.
Suburban populations still outnumber urbanites in all three metro areas, and suburban growth continues to outpace city growth in Cincinnati and Cleveland. Changing development dynamics might not amount to a regional renaissance, but it could mean city living in the Rust Belt is no longer in free fall.
Cleveland: Another Chance
In the 1990s, Cleveland seemed to have finally figured it out. Manufacturing jobs had begun to rebound after 20 years of deindustrialization and white flight. And a 15-year dream of housing the Rock and Roll Hall of Fame came true in 1995—the poster-child for reinvestment and culture in an ailing blue-collar city once dubbed “the mistake on the lake.”
Three sports stadiums sprang up downtown, but the surge of high-profile development did not save the city from decades of structural change that make it hard for any permanent recovery to take root.
Now a new round of reinvestment downtown has garnered attention from observers who see Cleveland as a bellwether for the Eastern Great Lakes region.
“Everyone kind of expected in the 1990s that if we build it they will come,” said Greg Ward, vice president of Wells Fargo’s Real Estate Group in Cleveland. “Now there are concerned people in the real estate community saying, ‘How do we make sure we don’t fumble this round of big development?’”
The major projects this time include the Cleveland Medical Mart & Convention Center, which topped off its steel frame in June, and Horseshoe Casino, which took in $26.1 million after payouts in its first month. By next year new casinos will also open in Columbus and Cincinnati.
In downtown Cleveland, demand for rental housing is outpacing supply. Cleveland Flats East Bank, a 140-unit residential complex on the riverfront, is set to open next year. MRN Ltd. will convert three stories of the historic National City Bank building on Euclid Avenue into housing, following the K&D Group’s reclamation of unused office space in the nearby East Ohio Building.
And commercial tenants like AmTrust Financial are also reconsidering the city, helping to stabilize distressed properties downtown.
“This is for real,” said Tracey Nichols, director of the city’s department of economic development. “I think we’re seeing a fundamental shift.”
An array of creative financial incentives are behind almost every deal. The Flats was one of the largest public private partnerships in Cleveland’s history. New markets tax credits even allowed for Cleveland to build its first new police station in 34 years.
“The city and county governments are working together,” Ward said. In a city where a recent corruption scandal indicted dozens of public officials, public trust is key to economic development. “They get development now, and they get the value of a center city as a hub.”
From one angle, Cleveland looks like the opposite of a dying city. Young people are moving into Downtown and neighborhoods like Ohio City and Tremont, while older adults are leaving these areas for the suburbs and exurbs. The city shrank steadily even as Downtown doubled its population since 1990. And suburban Cleveland has also contracted, as exurban communities in the five counties surrounding the metro area grew.
Offers of tax relief capitalize on a cultural tendency toward city life among the younger workforce of today’s flourishing industries. And the city is reinvesting in urban amenities like planters along Euclid Avenue and a shaped-up Chester Avenue Park in an attempt to close the loop. The annual Cleveland Design Competition, organized by architects Micahel Christoff and Bradley Fink, is calling on designers to transform the city’s Detroit-Superior Bridge into a symbol of civic pride.
But the city’s tax base is still too weak to repair some essential urban elements, namely its ailing public school system. “It’s a barbell market,” Ward said. “You have young professionals without kids, and empty-nesters whose kids are already through the school system. And it’s tough to get a lot of people who are in between.”
According to a census analysis by the Greater Ohio Policy Center, almost 34,000 members of Generation Y left Cleveland city limits over the last decade.
Cincinnati: Pockets of Growth
Columbus and Cincinnati are taking another tack, hoping to recast their cities as entrepreneurial havens, banking on their rapidly changing demographics. Roughly a third of each city’s population is Generation Y. The two cities are each home to three Fortune 500 companies.
And both have invested in small business incubators. Jeff Weedman, vice president of global development at Procter & Gamble, recently announced a two-year leave to help launch Cintrifuse—a hub for startups in Cincinnati that is eyeing a former nightclub in the Over-the-Rhine neighborhood for office space.
If that goes through, it could be the apex of the neighborhood’s rapid transformation. Entrepreneurs and executives might soon flit about where just a few years ago drug dealers roamed the streets. An area that lost almost 90 percent of its population since its heyday, Over-the-Rhine now outpaces the central business district and neighboring Pendleton (the area that constitutes “downtown”) in new residential sales. The total downtown area population topped 13,000 last year—a milestone, but a fraction of the population individual neighborhoods once enjoyed.
A $48 million renovation of Washington Park is the latest investment by Cincinnati in its urban character. The Washington Park renovation took $17.85 million in city and state grants and loans, $13.3 million in PNC Bank equity through new markets tax credits, and more than $1.6 million in grants from private donors and foundations—Procter & Gamble’s nonprofit P&G Fund contributed $1 million.
Some historic elements of the 1855 park remain, including a replica of a Civil War–era cannon. But the thrust of the project was reinvention. The design team included BHDP Architecture, Human Nature Inc., THP, KLH, and ME Companies. They excavated more than 110,000 cubic feet of dirt—and relocated 53 bodies interred there (a portion of the park was once a cemetery)—to make way for a 450-space subterranean parking garage to serve neighboring businesses. Once 6 acres, Washington Park is now 8 acres and boasts a new playground as well as an interactive fountain. Nearby, Mercer Commons will include 154 units of housing and 26,000 square feet of retail space in refurbished and new infill buildings.
With phase one of the region’s largest mixed-use development already at capacity, construction continues on The Banks, an 18-acre complex that aims to reclaim the riverfront. Lifted out of the Ohio River floodplain by underground parking garages, the area between two arenas home to the Reds and the Bengals will house another 300 apartments and ground-level retail when phase two breaks ground later this year. The buildings’ design may not be as progressive as their role in the city’s urban development: The Banks is expected to draw 3,000 residential tenants and up to $3 billion in economic impact for the city and county.
Washington Park, which reopened in July, and The Banks join Fountain Square and the Smale Riverfront as the newest vote of confidence for urbanism in Cincinnati. And like those projects, they bear a seal of approval from the Cincinnati Center City Development Corporation (3CDC), a prolific nonprofit behind many of the city’s recent developments.
“There was this movement of people wanting to move downtown,” said Anastasia Mileham, vice president of communications for 3CDC. Last year, according to Downtown Cincinnati Inc., population in the central business district and Over-the-Rhine rose 12 percent.
When 3CDC was founded in the early aughts, crime in now-hip Over-the-Rhine was spilling over into the central business district. Fountain Square, “the heart of our city, was kind of this desolate place,” Mileham said. The project gathered funds from city grants and state loans, but the bulk of the project was privately financed, a testament to, among other things, the value of urban renewal to the area’s corporate interests.
“Downtown is great for bringing people together to share ideas, but I think the innovation still filters out to the suburbs, as well,” said Michael Hines, a 28-year-old real estate agent who lives in The Banks and works in suburban Hyde Park. “You need to expand your base.”
Suburban communities like Hyde Park and Montgomery have invested in walkability, sweetening the deal for those thinking of leaving the city for suburban school systems. But residents of the Cincinnati metro area outside city limits still outnumber their urban counterparts six to one.
Cincinnati has secured $211 million in federal new markets tax credits since 2009, compared with $125 million for Columbus and $68 million for Cleveland. Despite its persistent suburban development, reinvestment in Cincinnati’s historic downtown neighborhoods is gathering considerable momentum.
“It’s all about pockets. There are pockets of growth everywhere,” Hines said. “There are still areas that are hard hit and hard-pressed to rebound anytime soon.”
Columbus: Capital Investment
With more than 55,000 students and a $2 billion endowment, Ohio State University is a natural engine for growth in Ohio’s largest city, Columbus.
Unlike Cincinnati and Cleveland, Columbus has seen its population rise since 1970. That’s due in part to its policy of annexing surrounding areas, but a history of aggressive financial incentives deserves most of the credit for this distinction. The city offers “enterprise zone agreements” for tax abatements of 75 percent, and even 100 percent to build downtown.
Urban apartments are in demand nationwide. The national vacancy rate is 4.9 percent, according to real-estate research firm Reis Inc. But in Columbus, it’s only 4.5 percent. Undergrads are joining graduate students and young adults in downtown housing, adding to the biggest construction boom the city has seen since 2005.
“There’s an energy now that is becoming self-perpetuating,” said Joseph Reidy, chair of Urban Land Institute’s Columbus chapter.
In the core of downtown Columbus, condo sales have flagged as apartment sales picked up. An older suburban population has remained relatively sedentary, Reidy said, allowing for denser development to emanate out from a “recolonized” downtown.
The city drove that process of recolonization when they razed City Center shopping mall in 2009 to make way for a $145 million office and retail development and $15 million city park called Columbus Commons. One community blogger called the mall “a big abscessed tooth in the middle of the city.” It’s a fitting image, as the new development’s own website describes its “surgical dismantling of the mall space.”
The city’s proactive reclamation of its urban core continues. Carter, the nation’s third-largest commercial developer, is expected to break ground this month on a $50 million residential project abutting the Commons.
With more than 100,000 students across more than a dozen institutions of higher education, Columbus has a built-in work force and innovation base that is crucial to the city’s future growth. That growth could look very different from central Ohio’s traditional patterns of development in open land.
“We should not be cannibalizing farmland,” Reidy said. “With the economic situation that we have today, people are starting to realize a denser footprint has more people sharing the tax burden. There just isn’t the appetite for local governments to float bonds anymore to support 5-acre lots ever-radiating outwards.”
A Tipping Point?
All three cities are nourishing “meds and eds”—healthcare and higher education—in their pursuit of urban renewal. But an interest in homegrown small businesses could help cement national industries within the regional economies of each city.
Building permits may be up compared to last year in all three cities, but Columbus, Cincinnati, and Cleveland were struggling long before the current recession. In absolute terms, the downtown activity is a fraction of the growth still seen in suburbs, even if its pace has picked up. Sprawl in northeast Ohio blazed over county lines. A recent report by Policy Matters Ohio found that the state ranks fourth highest in the nation for underwater mortgages, behind Arizona, Florida and California. Cuyahoga County, home to Cleveland, leads the state.
But the financial crisis has also forced many potential home buyers to reconsider some perceived truths about their suburban aspirations: Do I want to own a house? Do I need to own a car?
The future is uncertain for Clean Ohio grants and other state programs that helped fund recent development. And despite a corporate community invigorated by a “modernized” business-friendly tax system, tax incentives are still needed to keep this return to the city at full steam.
Each city believes it is building on good bones, and demographics put the onus on the younger generation. All three cities saw their population of baby boomers leave in droves. More than 30 percent of Columbus residents born between 1946 and 1965 have left the city since 1980. That’s a lot of room for new ideas.