Columbus Partnership assumes active role in Downtown development
Among all of central Ohio's commercial real estate transactions in March, the one for 145 S. Front St. might have raised the most eyebrows.
The 200,000-square-foot state office building, empty since 2007, was sold for $3 million.
Instead of a developer, the buyer was the Columbus Partnership, the private, nonprofit collection of the area's most powerful corporations, which announced plans to turn the seven-story building into a mix of offices, retail space and residences.
The Partnership has been active in economic development since its founding in 2002, but until now, has stayed away from bricks-and-mortar.
The purchase signaled a more active role for the Partnership in Downtown development. The impression was heightened by the timing of the purchase — nearly simultaneous with changes at the Columbus Downtown Development Corp. that gave Partnership members seven of the 13 CDDC board positions.
Among the new CDDC members is the Partnership's CEO, Alex Fischer.
Fischer pointed out that the Partnership always has been involved in Downtown development, but noted that Downtown is in a more precarious position than it was before the pandemic.
"I've always believed, and the Partnership has always believed, that one of the key assets to the entire region from an economic development standpoint is a healthy downtown," Fischer said.
"I don’t know any cities in America that don’t have vibrant downtowns. You could argue that as goes Downtown, so goes the region."
For Fischer, the past year simply made the focus on Downtown more urgent. The pandemic emptied many Downtown offices, followed by protests that boarded up much of the urban core. Office vacancies rose, restaurants closed and the rush into Downtown apartments stopped.
"I don't think we can assume that post-COVID, Downtown stays on the same trajectory it was on," Fischer said. "I think place-making will matter more than ever after COVID, and I put a higher priority on Downtown than I did a couple years ago."
Downtown faces the immediate challenge of bringing workers, residents and restaurants back, but other long-term challenges remain, Fischer said.
"I think we recover from that fairly quickly," he said. "Then the question becomes: What are we doing next? There's so much opportunity around Capitol Square, Columbus State, Nationwide Children’s Hospital, the corridor along Grant (Avenue), and to the (Scioto) Peninsula and all of Franklinton.
"I think this is a moment of reassessment and engagement to define what the next phase of Downtown development is."
Fischer sees the Partnership's primary roles in Downtown development as helping set priorities, bringing parties together and providing a corporate perspective.
"We bring first-hand knowledge of what’s going on with employers," he said. "We bring a lot of insight, strategy, specific expertise to the table."
Real estate developer Jeff Edwards, CEO of the Edwards Cos. and a member of both the Partnership and the CDDC boards, said the Partnership can bring a lot to the discussion on Downtown, where his company has completed several significant projects and has plans for more.
"I'm not sure exactly how an expanded role will play out, but for the entire Partnership, there's significant resources to make things happen," he said. "Downtown was on a roll prior to COVID, and I think it has work to do going forward.
"In the short term, we need to just put the virus behind us and get people returning to work," Edwards said. "In the long term, it's still a challenge to bring people Downtown from the suburbs and on weekends, but you’ve got a real jump with 10,000 people living Downtown now."
Michael Stevens, Columbus’ director of development, welcomed the Partnership's attention on Downtown.
"We're excited about their participation as we come out of the pandemic," Stevens said. "The Partnership has been focused on economic development and recognizes that for successful regional economic development, we need to have a strong and vibrant downtown."
The Partnership is focusing on Downtown during a transition time for the Downtown Development Corp., the private group that helped redevelop the Scioto Mile, John F. Wolfe Columbus Commons park, the National Veterans Memorial and Museum, the former Lazarus building and the River South District.
The organization is now spearheading the development of the Peninsula, the 26-acre patch immediately west of COSI in Franklinton that will include a dense mix of residences, offices and retail uses.
In March, the CDDC's longtime CEO, Guy Worley, announced he is stepping down as the city revamped the board, in part to focus more on bringing affordable housing to Downtown.
Fischer, now on the CDDC board, said Worley's replacement "has to first and foremost be collaborative and be able to walk between public and private interests and do it in a way that brings people together."
He said he is eager to find a replacement for Worley, whose last day is May 31.
"I think we all share a healthy sense that we’ve got to proceed with a sense of urgency, not because there's a problem but because there's a lot of opportunity," he said.
Fischer said the Partnership bought the state of Ohio-owned building because members feared it would continue to deteriorate and saw it as a key part of the block that also contains the Ohio Supreme Court building and the Partnership’s own offices.
The Partnership paid $3 million for the building, significantly below the value placed on it by two 2019 appraisals commissioned by the state, which estimated its value at $5.2 million and $6.2 million. The state's Department of Administrative Services never sought bids for the building but instead sought legislative authority to sell it directly, as it has for other buildings.
Last summer, the legislature authorized the state to sell the building to the Partnership for $3 million.
"The purchase price was negotiated between the parties considering the extent of time the property sat vacant and the continuing deterioration of the condition of the building," said DAS spokesperson Melissa Vince
Despite the investment, Fischer said he does not expect the Partnership to go into the development business.
"This isn’t our core business," he said. "Never say never, but I view this very much as a one-off."
The Partnership is working with Brad DeHays, founder of Connect Realty, to redevelop the building. The state had gutted the building before selling it, leaving it primed for renovation.
DeHays said he is working with the Cleveland architectural firm Sandvick, which specializes in historic renovations, on a plan that would convert the top three floors into 81 apartments, floors two and three into offices and the ground floor into retail, with parking below.
"It has a deep footprint, so we'll need to add a light well in the middle," DeHays said. "But the views are beautiful, and we're excited about our preliminary designs."
DeHays said the Partnership hopes to get the 1964 building onto the National Register of Historic Places, which also would help attract historic tax credits for the renovation.
DeHays said he is approaching the redevelopment much as he would any project, but having 70 of central Ohio's most prominent CEOs as your boss does change things a bit.
"I don't see this as significantly different, but there is an added emphasis of wanting to make sure they’re engaged," he said. "They’re experienced; many are real-estate owners themselves. The level of creativity in this group is just amazing."
Jim Weiker writes about real estate and the homes market for The Dispatch.