Downtown moves forward with parks, homes and offices, as developers ponder possibilities for the Dispatch property and adjacent lots.

Visitors to Downtown Columbus in the 1990s marveled at the new Huntington Center, the Riffe Center, the revival of the Ohio and Palace theaters and the new City Center Mall. Returning more than 20 years later, any visitor would find Downtown vastly changed and revolving around new centers of gravity.

Nationwide Arena and Huntington Park are new homes for the Blue Jackets and Clippers, anchoring Arena District projects far north of Capitol Square.

Nearby, an expanding Greater Columbus Convention Center and new Hilton Columbus Downtown beckons to a bustling Short North, lacking only a 1,000-room hotel for breakthrough national conventions.

To the south, in place of City Center, new residential and office buildings have risen around the Columbus Commons green space.

The Scioto River has gone from stagnant urban lake to free-flowing river, and 33 acres of new grass, trees and bike paths are on their way to the Scioto Greenways.

But perhaps the most intriguing development is the sudden availability of prime Capitol Square real estate soon to be vacated by The Columbus Dispatch-and Columbus CEO-as new owner GateHouse Media moves the publications out of their longtime headquarters at 34 S. Third St., across from the Ohio Statehouse.

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Following the GateHouse acquisition this spring of the Dispatch Media Group, the publications' former owners retained control of the Downtown real estate, opening up numerous possibilities for residential, commercial or retail construction-either as a single development or in stages.

"Conceptually, we look at the land we have and know that there is a higher and better use than parking lots, but you only get one chance to develop it," says John F. Wolfe, chairman of The Dispatch Printing Company and former publisher of the Dispatch. "Sooner rather than later we'll engage with different potential planners to give us an idea of what might be doable."

The extensive Wolfe property across Third Street from the Statehouse has always had high visibility. The land stretches south from the iconic Dispatch building to State Street and east to Fourth Street. The nearly full block takes in three surface parking lots and a vacant former bank building on Third Street just north of State Street-all under the control of The Dispatch Printing Company and its wholly owned real estate development subsidiary, Capitol Square Ltd.

In the early 1990s Wolfe and the then-John W. Galbreath and Company were prepared to change the city's skyline with a sleek, futuristic project dubbed Capitol Tower. Lead tenants Vorys Sater Seymour & Pease and Banc One Corp. committed to leasing space in the planned 42-story, $150 million glass and granite skyscraper in 1992. But in late July 1993, financing for Capitol Tower fell through unexpectedly, leaving a substantial gap on the east side of Capitol Square.

"The timing just wasn't right. I thought the building was very good. The architect did a really good job of designing the building but the pieces just didn't fit," Wolfe says.

"We've got a great footprint on the Capitol Square, and we would want anything we would do to enhance the Downtown. It'll take a while for exploration to tell us what we might do with it," Wolfe says. "It's a big enough footprint that it doesn't all have to be developed as one development."

Capitol Square is long overdue for new construction. The brand names on bank buildings, hotels and street-level retailers have changed, but the buildings of a quarter-century ago remain substantially the same. And there are signs the square faces new challenges.

OhioHealth, an anchor tenant of the Continental Plaza at 180 E. Broad Street (formerly known as the Borden Building) and a major tenant in the PNC Bank Building at 155 E. Broad St., hopes to consolidate more than 2,000 nonclinical employees now located throughout central Ohio under one roof, but not necessarily Downtown.

"To be good stewards of our financial resources and to enhance our working environment, we have begun investigating how we might consolidate these scattered work sites into fewer, perhaps even one, central Ohio location," says Roland Tokarski, system VP of OhioHealth real estate, design and construction and facilities. Targeting a final recommendation yet this fall, OhioHealth says all options are open, including creating new space.

Tokarski says the health system is looking at options "including remaining in one or more of our current facilities. We are sensitive to the impact our move could have on the communities where we work and are being very thoughtful about our decision."

Meanwhile, the 25-floor Fifth Third Bank building on the State Street side of the square is headed for repossession and probable bank sale, with lease rates at steep discounts and occupancy at about 75 percent.

Critical mass or underperforming?

In terms of the numbers of Downtown residents and pace of commercial space under construction, Columbus lags significantly behind Indianapolis, Cincinnati, Pittsburgh, Nashville and other competitive cities, despite $1.3 billion in proposed development projects, $362 million invested in construction now underway, and $391 million in new projects completed during the past 12 months, according to a mid-year report of the Capital Crossroads and the Discovery District Special Improvement Districts.

Research by commercial real estate expert CBRE confirms those findings but also identifies plenty of reasons to look at the city's upside potential, says Michael Copella, managing director of CBRE's Columbus operations.

While CBRE notes some of Columbus' struggles, it ranks the city high on brainpower with one of the highest concentrations of degreed professionals in the Midwest. "I'm bullish on Columbus with all the residential construction going on," Copella says. "Columbus has always been a community of steady growth. With OSU, Battelle, state government and so many other anchor institutions, Columbus didn't go through things like Detroit, Cleveland and other cities have gone through during the recession."

New Downtown real estate projects tempt even more investors. Class A commercial space is more than 85 percent occupied and residential enjoys an even stronger 95 percent occupancy rate, CBRE and Capital Crossroads agree.

The Columbus strategy: Retail follows rooftops

Mayor Michael Coleman, who has forged public-private partnerships and supported parks and amenities to make Downtown more people-friendly, keenly senses both the opportunities and challenges.

"We're trying to move the Downtown from a five-day-a-week, eight-hour-day environment to a seven-day, 18-hour-day environment," Coleman says. Downtown wasn't getting very much residential momentum until a few years ago, he says. "But we found a belief and a strategy that retail follows the residential market."

The early harbingers of retail shopping-dining, entertainment and recreation-look promising, Coleman says. "In time we will see retail Downtown, maybe never a million-square-foot retail mall, but hopefully more activity than we've seen for a long time," such as the diverse vendors at the North Market, emerging retail along High Street and inclusion of the Short North as a part of the Downtown market.

"When you see 95 percent occupancy rates, that's really going to feel like 100 percent," says Guy Worley, the chief urban project leader on the Scioto Mile, the Columbus Commons and the Scioto River Greenways projects, who advocates strongly for the residential-retail strategy.

Worley is president and CEO of Columbus Downtown Development Corp. and Capitol South Community Urban Redevelopment Corp., and he believes green space and amenities like the Commons and sports venues like Nationwide Arena and Huntington Park have proven their worth in providing catalytic energy for commercial real estate development nearby.

"In many ways, we had more parking spaces-with 963 acres Downtown, 24 percent of them were parking lots. That's not a strength. One of our goals was to turn those parking lots into neighborhoods, and that's why you see so much new residential development," Worley says.

Still, accessible parking, always at a premium Downtown, is a key way public help can spur private development, says Curtis J. Moody, president and CEO of Moody Nolan, an architectural firm that has shared design duties on the Downtown Hilton, Columbus Commons and urban projects nationwide.

In Columbus, Moody Nolan helped connect City Center's underground parking to Robert Weiler's Columbus Commons apartments. In Kansas City, the firm designed the 1,000-space Arts District Garage, placed underneath a green lawn near the atrium of the Kauffman Center for the Performing Arts. Moody Nolan's Cincinnati projects in The Banks benefited from underground parking, too.

"It just has to do with good planning and energy sense. If we have a parking garage and next to that an office building, some retail, a residential tower and maybe a museum, there's synergy in combining parking for all of those mixed-use developments. We can reduce the carbon footprint and make tradeoffs on some of the energy needs with combined facilities instead of separate parking."

Untapped potential Downtown

By the numbers, this residential-brings-retail urban strategy should work. The potential Downtown retail market for those who live, work, attend school or visit the city is $365 million per year in spending, an "untapped potential" beyond any other part of central Ohio, says Chris Boring, a principal and retail trends analyst at Boulevard Strategies of Dublin.

"The only category reaching its potential (Downtown) is dining and entertainment," Boring observes. "But the convenience, fashion, home and leisure goods categories are all lagging. Many downtowns are struggling to retain a robust retail mix beyond restaurants. In lieu of retail, they've turned their focus to arts, entertainment and recreation to build on their cultural assets."

Anthropologie, the fashion boutique newly opened in the Short North, is the first significant retail chain to pioneer there, and others may follow quickly-but only if it succeeds, Boring says.

Columbus Commons, with its extensive entertainment and recreation programming, on the very ground where City Center mall once stood, is a prime example of this trend. "We now devote a section of our Downtown market studies to assessing the potential for more arts, entertainment and recreation venues and programming for our Downtown clients" while also looking at more traditional uses such as retail, office, and housing, Boring says.

That's music to the ears of the residential, commercial and retail developers with shovels and hammers already in hand Downtown.

Bob "Skip" Weiler, chairman of the Robert Weiler Co., says it's obvious that downtown living is today's hottest real estate commodity. Weiler and developer Don Kelley are majority equity partners in the 300-unit, $50 million High Point on Columbus Commons, a mix of townhomes and apartments that provides parking to residents in the former City Center underground parking area.

"The other cities reached a tipping point on residential before we did, but we've reached it now," says Weiler, who believes the Downtown population will double to 15,000 residents a lot more quickly than the 12 years it took to reach 7,000.

South of Weiler's Commons apartments, Brett Kaufman, founder and CEO of Kaufman Development, has leasing well underway for the 250 High building-both for 120 apartments and for first-floor retail spaces. Next for Kaufman is the 17-story, $90 million Two25 Commons building, a mix of first-floor retail, five floors of offices and 11 floors of residential apartments and condos. And just announced is a Kaufman redevelopment of 10 floors of the LeVeque Tower at Broad and High streets as condominiums and 15 floors with 68 apartment units.

"At 250 High we've already seen strong demand for commercial spaces, similar to the kind of experience we've had with residential living. Companies, like residents, want new, modern, efficient floor plans," Kaufman says.

"They want to be near Downtown, close to the high energy, with a younger kind of mentality and an employment base that's looking for a more urban experience. That's not just apartments-that's work environments, too. As a city, we're probably behind in supplying that product to the market, but we're catching up fast."

Mike Mahoney is a freelance writer. Columbus CEO Editor Mary Yost and Linda Deitch of The Columbus Dispatch research staff contributed to this article.