Editorial: Private investment needed

The restoration of the Spitzer and Nicholas buildings and the rebirth of the Four Corners where Madison Avenue meets Huron Street continues to inch along thanks to support from Ohio’s Historic Preservation Tax Credit Program. (“Spitzer Building gets $9.2M in tax credits,” Thursday)

The $190 million project to convert 500,000 square feet of empty space in historic but decrepit buildings into retail and residential options has now tapped Ohio’s preservation program for $19.2 million. The Nicholas Building received a $10 million credit last year.

Read more Blade editorials

Toledo restoration projects pulled in $14.4 million, totaling more than 20 percent of the $68 million in tax credits Ohio granted this year. In each of the projects the state tax credit is worth slightly more than 10 percent of the project cost. Ohio targets a tenfold return on the tax credits from private investment.

It’s a long, slow process on the Nicholas-Spitzer Buildings. The Lucas County Land Bank acquired the properties in 2020, and CEO David Mann told Blade reporter Tom Henry, “a lot more money needs to be raised before work begins.”

Market-driven money is harder to raise than Ohio tax credits. The state tax credit can help attract investment money but ultimately, the Four Corners project depends upon confidence street level retail space and 500 plus apartments can be rented.

City officials are grateful for the financial help from Ohio and excited about the potential downtown development the Spitzer Building and six other projects can spark. They should be, but Toledoans know plans and announcements do not guarantee completed projects.

It’s coming on two years since Cincinnati developer The Model Group and Toledo partner ARK Restoration & Construction were picked to drive the Nicholas-Spitzer restoration. Their slow progress raising the money to make the restoration project a reality signals economic prospects are not as bright as hoped or projected.

It’s a tough environment to launch large real estate projects. Interest rates are high, and there are more retailers closing locations than seeking new space. Hundreds of upscale apartments may not fill quickly but the price needs to be high to pay for the expensive restoration and earn any profit.

Toledo needs to be patient and persistent to progress on the Four Corners project. Easy money from the state is welcome but no indication of success. Only a private sector investment sufficient to begin work is cause for celebration.