Below is the full article by Tristan Navera. (@TNaveraDBJ)
The developers behind Fire Blocks District in downtown Dayton have been playing things close to the vest as they build the capital for the $100 million revival.
Half the financing for the reconstruction of downtown's planned Fire Blocks District has been raised and two of the buildings are already seeing construction work. As they crisscross the country in search of new capital, the leaders in the revitalization effort say they're looking to build something more than a set of pretty buildings in downtown.
"We'll be the connecting hub for the spokes all around downtown Dayton," Winfield Scott Gibson said. "We want this place to be its own little ecosystem and insulated from whatever market trends go on. We want this to be a place where people live for many, many years."
Gibson, returning from another set of meetings, joined his partners as they led a number of interested members of UpDayton through some of the first spaces of the buildings along Third Street where the developers want to create a new lifestyle district.
The project has gained steam with two groups at the helm. Developer Ellway Group — led by principals Gibson, Elliot Katz, Austin Sprenkel and Greg McCluskey — have assembled the ideas for the 450,000 square feet of space. And Taco Pants, a hospitality group formerly part of The Idea Collective and led by Jeremie Kittredge, David Kittredge and Ginger Roddick, is helping formulate the plans for the amenities at the district, which could one day host three dozen businesses.
Ellway Group began when competitors joined forces. Gibson, then living in Tulsa, was bidding for the 124 E. Third St. building against Katz, a Florida investor who made name for himself in Dayton redeveloping the Elizabeth Place center from 2002 to 2007. After buying the property in 2015 with plans to redevelop it, they decided to join forces.
At first they eyed what Gibson called a "modest" 60 residential units in a few buildings on Third Street, but with the promise of a space that lures hundreds of jobs, Gibson said the developers want to be an economic, social and environmental hub on the 10-acre site, as it draws retail and lifestyle-type businesses to support its residences. They then lured the Taco Pants founders from Tulsa to the Dayton project as well.
"As we saw more people getting interested and getting involved ... We saw there was more of a need and more of a story to tell," Gibson said, who moved his family to Dayton from Tulsa, Oklahoma 15 months ago. "We love the idea of the phoenix and rising out of the ashes and building something new."
And so, they have already gone to work ripping out drywall and revealing the historic structures underneath. The buildings in Fire Blocks feature 15-and-a-half foot ceilings and columns inside. Adaptive reuse is more expensive than construction, because historic buildings have re-design costs.
And they're looking for things to make the development unique, like putting gas in the buildings — part of a partnership with Colleen Ryan at Vectren to put in a cost-effective, easy to manage service and maintain. It will help inspire other developers for new technologies for the technology to work in other environment. El Sueno, a planned elevated Mexican restaurant concept in the Elks Building for instance, has no equivalent cuisine in the market.
"We're going to be looking for things people haven't been exposed to here," David Kittredge said.
Making the numbers work
The developers say they have the financing to do it. Gibson said the project has landed $35 million to $38 million in financing. The Elks and Huffman Blocks buildings, where development has already begun, are fully funded. The developers say it will cost $70 million for construction, while the tenants' investments bring the redevelopment project to $100 million.
At the 124 building, the ground floor retail is 100 percent full, with Upward Brands Interactive taking 6,600 square feet on the first floor, alongside Wells & Co. Custom, Tattoo, DND Uniforms, and others. Upstairs, 55 percent in the rest of the building is occupied, excepting the third flood which will have a "non-traditional" 11,000-square-foot pad as developers seek a single tenant for the space.
"There have been some delays in getting the permits but we're pretty much there," Gibson said.
The well-known stats of the Dayton region's population of 860,000 people with an average income of $44,000 only tell part of the story. About 30 percent of the people in the region earn above $100,000 and the average rent is $1,500, which supports large-scale adaptive re-use projects, Gibson said. That backs the business model to make the project feasible, he said, adding that other developers like Jason Woodard have brought them some help.
"When we've had different groups come into this place, we now have revenue models coming in from a third party group that reflect what we think," Gibson said.
The project is being done in phases — the Elks building is expected to be done around September 2018, with Huffman to be finished before the end of that year.
Socially, economically and environmentally sustainable
Time in Tulsa is what inspired Gibson to the Dayton project.
"We do what we do because we believe Dayton is one of the most under-appreciated real estate markets in the country," Gibson said. "We think it will move much faster than OTR (In Cincinnati) and the Warehouse District (in Cleveland). We are trying to just help be a part and a facilitator and a catalyst for what is to come for Dayton."
So, the developers are instilling their own philosophy on urban re-development and everything must be socially, economically and environmentally sustainable. They want to re-use everything they can in the buildings, including Price Building's iconic panels, and source within 300 miles for the labor and materials for the buildings. They'll also feature up to 3 acres of green space on the rooftops, Sprenkel said.
"The goal is maybe in 30 years the way we live changes," Gibson said. "Often people strip one of these out to support the other two, and that makes it happen and gets them a couple bucks, but it leaves a mess in the long-run."
And like the Arcade Developers, who look to Durham, North Carolina for inspiration, Gibson and the Taco Pants principals have taken their cues from Tulsa — where they moved from about a year ago. There, a development called The Brady Arts District transformed one of the oldest quadrants of downtown into a thriving destination after three or four years.
"We fell in love with what Dayton is trying to do to its downtown," Sprenkel said. "And what this city could become."