Public-private partnerships lead the way in a Cincinnati neighborhood’s revival

At first glance, the history of Cincinnati’s ‘Over-the-Rhine’ neighborhood resembles a storyline familiar to many of America’s urban neighborhoods – a once thriving immigrant community and booming industrial hub turned impoverished and destitute, only to experience a renaissance after decades of disinvestment.

However, there is more than meets-the-eye in regards to the dynamic history of Over-The-Rhine and it’s recent (and unlikely) revival. A unique partnership between city leaders, local corporations and private developers helped to pave the way for what is becoming one of America’s greatest smart growth success stories.

A Brief History

German immigrants made Over-The-Rhine their home during the second half of the 19th century, imparting a distinctly European feel to the neighborhood with the construction of German-styled churches, beer halls and omnipresent Italianate housing stock. (Over-The-Rhine being a reference to the river in Germany)

Throughout the first half of the 20th century, the once proud Over-The-Rhine experienced economic disinvestment and social challenges as many displaced low-income African-Americans moved to the neighborhood in search of affordable housing vacancies. From 1980 to 2000, OTR experienced sky-high crime rates, periodic race riots, further disinvestment and population loss, resulting in a glut of vacant and abandoned properties. During this period, poverty rates were over 50%, home ownership rates as low as 4% and the area was widely known as one of the most economically distressed neighborhoods in the entire county. As this trouble began to spread and affect surrounding communities, major Cincinnati corporations began to wonder if it was worth remaining in the city and pondered moves to the suburbs.

Nowhere To Go But Up

One element that endured throughout the volatile history of the OTR neighborhood was the area’s impressive Italianate buildings left behind by the original German immigrants. Redevelopment visionaries saw the potential for revitalizing the neighborhood based around the existing historic buildings and the increasing demand for walkable urban neighborhoods close to job centers and entertainment. The only thing missing was the organization and financial infrastructure on the ground to make it happen.

That changed in 2003 with the founding of the Cincinnati Center City Development Corporation (3CDC), a uniquely structured non-profit development corporation that works in close collaboration with both public officials and major area employers including Kroger, Procter & Gamble and PNC Bank, among others. All the parties share a collective vision for a safe, vibrant, economically resilient OTR neighborhood as a catalyst for civic improvement in downtown Cincinnati.

In 2004, 3CDC and its CEO Stephen Leeper began purchasing dilapidated buildings along the neighborhood’s core artery, Vine Street, with a focus on renovating public spaces and mixed-use structures to include attractive retail spaces at street level with residential condominiums or apartments above.

What sets 3CDC apart from traditional developers are the unique financing mechanisms available due to the close collaboration with corporate leaders and local officials. 3CDC manages two operating funds – The Cincinnati Equity Fund and The Cincinnati New Markets Fund (CNMF) – the latter a result of the federal New Markets Tax Credit (NMTC) program, which was established by Congress in 2000. It provides a credit against federal income taxes to privately managed investment funds such as CNMF. In turn, these investment funds make loans and capital investments to stimulate development in distressed communities.

Since 2004, 3CDC has invested over $255 million in the OTR neighborhood. That includes about $64 million in public support from the City of Cincinnati, which aids in ‘gap financing’ of loans for development. According to 3CDC, these projects have:

• Restored or in process of restoring 107 historic buildings
• Developed or in process of developing 496 new and rehabbed residential units
• Developed or in process of developing approximately 127,000 SF of new and renovated commercial space
• Developed or in process of developing 869 public parking spaces in lots and garages
• Improved streetscapes
• Created an eight acre civic green space

A New Boom in OTR

As of December 2012, only 1 condominium out of 186 completed units developed by 3CDC in OTR remain on the market and 90% of the completed commercial space is leased. The next round of re-development currently underway will add 93 more condos and 149 apartments – 30 of which are slated as affordable units – and an additional 35,000 square feet of retail.

The group has also been successful in attracting popular events to a revitalized Fountain Square by programming the space with activities funded by private sponsors including a skating rink, a beer festival, a summer music series and much more.

However an unlikely story it may be, the Over-the-Rhine neighborhood is well on it’s way to becoming one of the strongest economic and cultural assets for the city of Cincinnati – a revitalized, safe, diverse, beautiful and vibrant community in which to live, work and play.