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Redevelopment Through Restoration
How Historic Tax Credits Have Accelerated Downtown Development

In center cities across the U.S., historic tax credits have been filling gaps in financing and building momentum for large-scale urban adaptive reuse projects that otherwise would be much more financially challenging. 

The restoration of buildings with historic value is important to our downtown community and environment, but the costs of restoration vs. new construction can often look daunting on paper. To overcome this hurdle and to encourage preservation of our past, the National Park Service has created incentives for those looking to restore rather than rebuild. Several of the buildings in downtown Dayton are listed on or eligible for the National Register of Historic Places, which in turn qualifies them to apply for up to a 20% tax credit toward rehabilitation costs. 
The State of Ohio also has dedicated funds to reduce costs of historic preservation. Applicants can leverage a state tax credit for up to 25% of qualified rehabilitation expenditures incurred during redevelopment projects.

Although utilizing historic tax credits can be a labor- and time-intensive task, these credits offer a very tangible incentive to encourage rehabilitation of vacant and underutilized buildings in the urban core. During Fiscal Year FY 2015, the National Park Service approved 1,283 proposed projects, representing an estimated $6.63 billion of investment to restore and rehabilitate historic buildings. Last year, Ohio leveraged historic tax credits in 143 projects, claiming the 2nd spot nationwide for most projects in FY 2015. In the past 18-24 months, four projects in the downtown core have been awarded state historic tax credits and others are on their way. 

Here are a handful of examples of the downtown Dayton projects underway or in the pipeline...
Riazzi Asset Management was awarded a tax credit of $687,500 for redeveloping the old Dayton Power and Light steam plant at 617 E. Third St. Riazzi plans to spend more than $3.7 million to redevelop the plant into two and a half floors of stylish, modern office space.
The Delco Building in downtown Dayton was awarded more than $3 million in historic tax credits by the State of Ohio. The six-story 213,000-square-foot building will become 132 market-rate apartments with Lock 27 Brewing on the first floor.
Louisville-based developer City Properties Group has begun construction on the Weustoff and Getz Building at 210 Wayne Ave., with plans to convert it into 40 apartments and first floor commercial space. The project has been awarded $1.9 million in historic tax credits toward the total project cost of between $8 and $9 million. 
The Grant Deneau Tower, 40 W. Fourth Street, was listed on the national register earlier this year, making it eligible for historic tax credits. Grant Deneau is one of the first towers in downtown to receive this distinction and is hoped to serve as an example of how historic towers can be renovated to meet the evolving needs and desires of the commercial real estate market.

Stacking Resources, Harnessing Power

While historic credits are an important financial tool, stacking resources together can significantly lower the costs of urban development projects and make them even more financially lucrative. Examples of other tools in the developer toolbox in downtown Dayton include:
  • Property Assessed Clean Energy (PACE) is a tool for accessing capital via special assessments and can be used for energy efficiency upgrades to commercial, industrial, or manufacturing facilities. With the establishment of a city-wide Energy Special Improvement District (ESID) in 2015, several projects in downtown are taking advantage of this financial tool. Since PACE financing is repaid through an assessment on property taxes, it looks like equity in a capital stack, enabling developers to leverage cheaper financing for the rest of the deal.    
  • The New Markets Tax Credit Program provides private investors with a federal tax credit for investments made in businesses or projects located in economically distressed communities. The Dayton Region New Market Fund has previously provided credits for downtown projects, including the Premier Plaza project which renovated the former Fifth Third Center into the headquarters of Premier Health, and the new Goodwill Easter Seals Miami Valley headquarters completed in 2015. 
To learn more about these financial tools and discuss how they might be applied in downtown Dayton, please contact Scott Murphy at or 937.224.1518 ext 223.
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Locally based retailer Shops by Todd has claimed the final space in the 312 Patterson office building at 312 N. Patterson Blvd. in the Water Street District Development.The office headquarters for Shops by Todd will occupy 2,700 square feet of the second floor, immediately above Basil’s restaurant. Shops by Todd has 17 stores under the brand names Occasionally Yours, Pandora and Jake’s Toggery and employs more than 300 employees in Ohio and Indiana. 

Centerville-based Lock 27 Brewing announced it will open a second brewery and a pub-restaurant overlooking Fifth Third Field's main plaza in downtown Dayton. Lock 27 is the first tenant of the former Delco Building at 329 E. First St. This large adaptive reuse project currently is under construction as part of the Water Street District. The brewery and 130-seat pub are projected to open in 2017, which will coincide with the projected residential occupancy of the Delco Lofts' 132 apartment units.

The Junior League of Dayton, a nonprofit organization that serves the community through promoting voluntarism, developing the potential of women, and improving communities through effective action and leadership, has opened the doors of its new location on the sixth floor of Liberty Tower, 120 W. Second St., in downtown Dayton. 

Catapult Creative, a Pop-Up Shop graduate, announced it will move into a larger office space at 10 N. Ludlow St. The marketing firm said it needed more space for the expanding company's 10 employees and three interns. Like its original home in Talbott Tower, Catapult Creative will occupy first-floor space at its new home in Courthouse Plaza SW. 

Soccer Shots, downtown Dayton's latest Pop-Up Shop, recently opened at 39 S. St. Clair in the St. Clair Lofts. Soccer Shots is an engaging children's soccer program with a focus on personal development. The program offers a high-energy introduction to the world of soccer to children ages 2-8 years old.

ARC Document Solutions has recommitted to downtown and has relocated to the first floor of The Cannery. Along with its retail neighbors, ARC brings The Cannery's occupancy rate close to 90%. ARC signed a three-year lease in its 4,000-plus-square-foot space. ARC Document Solutions provides technology and services focused on document and information management for the architectural, engineering and construction industries. It offers full-service document solutions, fulfilling AEC industry, corporate, retail, and personal document needs.
The City of Dayton is in the midst of a comprehensive evaluation of the downtown on-street parking system and asks for your input to help find effective solutions that will benefit downtown businesses, employees, visitors and nearby residents. The survey will take roughly five minutes to complete. Your time and input are much appreciated!
Take Parking Survey
Downtown Dayton Partnership
10 W. Second St., Suite 611
Dayton, OH 45402
For more information about the progress downtown and future plans, watch the video below and visit:
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