Cincinnati and Hamilton County officials are kicking in financial help for 3CDC to buy the Whex parking garage Downtown. The site is among several others slated for redevelopment as a "convention center district," which would include a new hotel and renovations to the Duke Energy Convention Center.
The $11.9 million purchase agreement is possible thanks to two loans, including one from the state with 0% interest for the first five years, and 1% for years six and seven. 3CDC CEO Steve Leeper says those incredible loan terms are only possible if city and county officials kick in some money up front.
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"The purpose ... is to reassure the state that's giving us this preferential loan that we have the necessary proceeds to take their loan out," Leeper told Cincinnati City Council's Budget and Finance Committee Monday.
The committee approved the first $275,000 appropriation Monday, with a final vote in Council expected Wednesday. Hamilton County Commissioners are expected to vote on their own $275,000 appropriation next week. 3CDC is asking each government to kick in that amount every year for up to seven years.
Leeper says the money is not expected to be needed for annual debt service.
"We believe that the revenues, because we have such favorable terms from the state and 3CDC, that we will not need that money to pay debt service and it will sit in a sinking fund that the city and county will control," Leeper said.
Once the redevelopment is complete, the city and county would decide whether to use the funds to renovate the garage or take the money back. The funds will need to be approved every year, meaning a future council or commission could decide not to follow through.
"That's a risk that 3CDC and the state will take, that [council] will not make that appropriation. We are willing to take that risk," Leeper said. "The main issue is that we would have to renegotiate with the state of Ohio. They would be the ones who would have the concern that we did not have this appropriation."
The city's money comes from the Downtown/Riverfront TIF District, which holds property tax revenue from within the district to be spent on projects that benefit the public in the same area. Council used $3 million from the same TIF fund earlier this year to purchase the former Saks Fifth Avenue building, also intended to be a key part of the convention district.
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If the purchase goes through, the Port of Greater Cincinnati would hold the property while 3CDC leases and operates the garage. Leeper says the garage is critical to the convention district plan, primarily by providing parking to the future new hotel.
"We are working with the hotelier now to redesign the garage to compliment it," Leeper said. "The hotel developer will pay, and its patrons will pay, but they will get a preferential program and allow them to ensure that their guests always have parking available to them."
Leeper says the 780-space garage is much more than is needed for the planned hotel, but it will also provide public parking for the convention center and other local attractions.
Learn more in Leeper's full presentation to Cincinnati Council below:
Whex Garage Council Presentation by WVXU News on Scribd
