The Dayton Arcade is a historic collection of five inner-connecting buildings in downtown Dayton, Ohio with a glass-domed rotunda as its centerpiece. It is in the process of being restored and reopened.
The Arcade was conceived by Eugene J. Barnet of the Barney & Smith Car Company and Michael J. Gibbons as an integrated shopping centre in the heart of downtown Dayton. 30 The five inner-connected buildings were designed by Frank M. Andrews and M.J. Gibbons in the Flemish and Italian Renaissance Revival architectural styles. 17 At the centre, Andrews planned for a glass-domed rotunda, 70-feet high and 90-feet in diameter.
Construction of the Arcade began on March 1, 1902, and was completed on March 4, 1904. 30 It consisted of the following:
- Market Building, 200-feet by 178-feet containing a 90-feet-wide by 70-feet-high rotunda, with passages out to Ludlow and Fourth streets.
- Third Street Arcade, which fronted Third Street and was built by M.J. Gibbons. 46 It featured a Flemish design and was reportedly patterned after a guild hall in Amsterdam, the Netherlands.
- Fourth Street Building, an apartment structure along Fourth Street designed in the Italian Renaissance Revival style.
- Gibbons Building, a five-story building adjacent to the Third Street Arcade. 46
- Kuhns Building, a commercial structure at the corner of Main and Fourth streets.
- A power building to generate steam heat and electric light.
The Benjamin F. Kuhns Building, at the corner of Main and Fourth streets, was designed in the Romanesque Revival style by Peters and Burns, a Dayton-based architectural company. It was built by local contractors Beaver and Butt and featured elements of stone and terracotta. It was named after its financier, Benjamin Kuhns, who had moved from Lancaster, Pennsylvania to Dayton in 1855. Kuhns became an industrialist, turning a small firm into a prominent manufacturer of agricutural equipment. He was also a prominent philanthropist and was one of the primary founders of Miami Valley Hospital. 38
During the Kuhns Building’s early years, it was home to the Manhattan Clothing Store in the 1890’s and Oleman’s Department Store in the 1910’s. 38
The Commercial Building, at the corner of Ludlow and Fourth streets and designed in the Italian Renaissance Revival style, opened in 1908. 32
The First Savings & Banking Building, along Main Street, was designed in the Commercial style and opened in 1917. 38 It housed the First Savings & Banking bank on the first floor and legal offices on the upper floors. 41 It was named after its main financier, Theodore Lindsey. 38
The Traxler Dry Goods Store building was erected in 1881 45 and was later connected to the Arcade. The building was destroyed in a massive flood of 1913 and rebuilt in the following year. 39 Traxler opted to relocate to seven floors of the new United Brethren Building in February 1924. 44 McCrory, a five-and-dime department store, opened in the former Traxler space on December 10. 43 The McCrory store layout was unusual as it had four entrances, via Main Street, Fourth Street, the rotunda, and the alley.
By 1916, the Arcade Market House boasted 200 market stalls in the Market Building and more than 80 tenants elsewhere. 17 Most sold vegetables, fruits, and dairy products, but some sold typewriters, furnishings and even railroad tickets. Offices and apartments filled the upper floors.
The rotunda dome was painted over during World War II over the fear that an invading enemy would be drawn to the illuminated bacon during nighttime air raids. 34
The Arcade gradually began to decline after the Salem and Dayton malls opened in the suburbs. 34 Despite the slow downturn, the Arcade complex was placed on the National Register of Historical Places on June 27, 1975. 14
In 1974, 6 a group of investors, led by Bruce Bedford of the Mead Corporation and Albert Sealy, a partner in the law firm of Smith & Schnacke, proposed the renovation of the ailing Arcade. 7 While there were numerous restaurants and shops in the Arcade, there were a number of vacancies.
The investors, dubbed Arcade Square, acquired options to buy two key parcels in the Arcade for $2.25 million in November 1975. 13 It included an option to buy for $1.95 million all 998 shares of Arcade Building, which owned the entire southwest corner of the Arcade complex and the actual arcade, and an option to buy for $300,000 to buy another parcel that ran parallel to the arcade between Third Street and Arcade Lane owned by the trust of M.J. Gibbons. 14 The option agreements set deadlines for the planning and early financing stages of the project. 13
Formal plans were announced for Arcade Square on May 4, 1976. 16 The proposal included a 90-car basement parking garage off of Fourth Street, the construction of another arcade to provide access from Main Street, and a 14-story apartment tower for the southwest corner of Third and Main streets.
The Arcade Square project received more than $4 million in public works funds in June 1977. 16 Additionally, the investors were able to pull together the city’s major corporate entities—Mead, NCR, E.F. MacDonald and Dayton Newspapers, along with the city, to assist in the project by selling $2,500 limited-partnership “shares” in October. 16 Nearly $1.5 million was raised. The city then approved of $1.5 million in tax abatements for the development in March 1978.
The project would entail the renovation of the rotunda and retail spaces for 114,000 square-feet of retail, restaurant and entertainment space 7 at the cost of $14.49 million. 6 Of that, Arcade Square pledged to raise $9.1 million, while the city pledged $315,000 in local funds. The investors also received $1.85 million in federal Economic Development Administration grant.
The restoration of the rotunda glass dome, long since covered with sheet metal, was initially estimated to be $300,000, but the costs did not take into account the use of insulated glass. 8 The costs were eventually settled and the restoration of the glass dome was back on track. 9
In January 1979, Arcade Square was awarded a $3.18 million “urban action” grant by the Housing and Urban Development Department. 6 Of the grant, the city intended to use $1 million to finance the final stages of public construction at Arcade Square, another $1.74 million to acquire the Arcade land and to lease it to Arcade Square, and the remaining $440,000 to relocate tenants in the apartments on the upper floors. The grant also allowed the investors to secure the remainder of the financing needed for the renovation project. 12
The rehabilitation of the Arcade also spurred the renovation of the Dayton Inn and the post office. 6 Lorenz & Williams had proposed to renovate the old post office for its headquarters, while an investment group had planned to reopen the Dayton Inn as the Daytonian.
Arcade Square was scheduled to reopen to the public on November 15 7 but delays in work led a shift in its opening. 9 By December, the new elevators and escalators were installed, and the lights and glass had been outfitted in the rotunda. There was ongoing work with the plaster restoration and the installation of an automatic sprinkler system.
Arcade Square reopened to the public on May 10, 1980, 13 with six shops. 16 The venue was not formally dedicated until the “Arcadian Festival” was held over a period of three days beginning on October 9. 12
By December, there were 33 stores and restaurants operating in the Arcade, 16 and even included a museum devoted to Coca-Cola, and fine art studios. 11 The Dayton Philharmonic, among other offerings, performed routinely in the rotunda.Work began in 1980 to evict tenants from the Arcade Square apartments, which were unaffected by the renovations elsewhere in the complex. 10 Plans called for the 131 units to be converted to 45 efficiency, one-, and two-bedroom units, either as rentals or as condominiums. But the apartments were put on hold as Arcade Square generated a net loss of $1.6 million in 1981. 15 The partnership that owned the Arcade stopped making monthly mortgage payments because of the negative cash flow.
Because of the poor cash flow, a public television station and disco operator pulled out of their lease agreements for space on the third floor in July 1981. 16 By November, about 57% of the space remained vacant. The original investors were asked to contribute another $1 million to prepare retail and office space for new tenants. In April 1982, the Arcade signed on Bell Publicom for 16,600 square-feet on the third floor and averted potential foreclosure by raising $1 million in new capital.
Recent articles posted on https://qvcredit.sg/ explain how, despite changes in the management and security company, the Arcade produced a net loss of $1.2 million in 1982. 15 In July 1983, Aetna Life & Casualty, one of the biggest loan underwriters for the Arcade Square renovation, moved towards foreclosure on the project over unpaid debts. 16 Bell Publicom closed their Arcade Square offices in March 1984 after the investors defaulted on loans from Huntington National Bank. Aetna Life, Gem Savings and Third National filed a court motion in June, seeking a $7 million against Arcade Square for unpaid interest and principal on mortgage loans.
Arcade Square, appraised at $3.3 million, was sold on October 26, 1984, for $2.2 million at a one-minute sheriff’s sale to Aetna Life, Gem Savings and Third National. 16 The city named the Webb Companies and the C.W. Heene Development Company as the lead developer of the Arcade in an effort to keep the redevelopment from failing. 16 17
A $1.5 million basement food court was opened in August 1986. 22
The Webb Cos. announced the Arcade Centre, a $42 million, 24-story office skyscraper at Third and Main streets and a parking garage at Third and Ludlow streets. 17 A second tower, to replace the Lindsay Building at 25 South Main Street and the McCrory Building at 29 South Main Street, would be part of a second phase. 20 Work on Arcade Centre was set to begin in the spring of 1986 16 and wrap up by 1988. 17
The tower would include a facade of blue-tinted glass, but its design drew criticism from the Ohio Historic Preservation Office for being out of character with its surrounding brick and stone buildings. 17 The designs were tweaked to include a stone facade on the first five floors of the tower but the proposal was once again criticized for being out of character with the Arcade. 19
The city committed $9.5 million for Arcade Centre for acquiring land, relocating tenants and demolition. 17 Another $6 million was received via a federal Urban Development Action Grant.
The city then purchased the Lindsay Building for $550,000 in preparation for its proposed demolition in 1986. 20
On February 24, 1987, the Webb Cos. presented plans for a revised 20-story office tower at Third and Main streets and a seven-story, 429-space parking garage at Third and Ludlow streets. 19 It would also include a two-story atrium wrapping around Arcade Square. The office tower was also revised to be faced with polished brown granite and pre-cast concrete with a granite face mix. The postmodern design, crafted by Charles E. Barnhart III, was unanimously approved by the Dayton Plan Board.
Construction on the Arcade Centre tower began in January 1988 21 and opened in October 1989. 20
At the time of its completion, it was just 30% leased. Under the development proposal from 1986, construction was to begin on the second tower, in the place of the Lindsay Building and the McCrory’s, when the first tower was nearly full and if the demand for more office space existed. But the city noted that because of the Arcade Centre’s slow leasing that another office tower may not be needed. It then noted that the Lindsay Building could be brought up to code for $116,000 and fully renovated by a developer for $2.3 million. The office mid-rise had been cleaned of asbestos in 1988 to prepare it for demolition, so the renovation costs were cheaper. 20 Additionally, the city stated that the McCrory, one of downtown’s busiest stores, could be given a facelift.
By the close of 1990, Arcade Centre had less than 25% occupancy and the developers were in danger of defaulting on construction loans. 23
Arcade Square Closure
By early 1990, most of the Arcade’s remaining 28 tenants were bleeding money and the Arcade Square owners were losing $600,000 per year. 28 A developer approached the owners to purchase the development and convert it into a bargain retail centre, but the city and downtown business leaders approached Danis Properties and asked the company to take control of the complex. In December, Danis Properties bought out the corporation that held title to Arcade Square for $100,000 26 and promptly announced plans to close the shopping and office centre by January 31, 1991. 22 24 The previous owners did not close the failing development for fear of losing their federal historic preservation tax credit. 28
The plans to close were delayed until March 22 to allow the 28 retail, office and restaurant tenants to relocate. 25 Danis spent nearly $500,000 to relocate and settle with the tenants. 28
The city spent $200,000 to reopen Arcade Square during the 1992 Christmas season. 26 “Holly-Days” featured pop-up shops and attractions. 27 During the 1992 Christmas season, an estimated 150,000 people visited the arcade.
During “Holly-Days” event, the city began negotiations with Danis to take over Arcade Square. Danis wanted to sell a land-lease interest and nine buildings currently used for industry on 50 acres of land because new development was being hamstrung by nearby water wells. In return, Danis would transfer Arcade Square to the city if it acquired the land and buildings.
The 1993 “Holly-Days” event saw sales fall 25%. 27 Because of the lack of interest, city funds directed towards “Holly-Days” was diverted to a children’s fair on Courthouse Square.
In the spring of 2004, Danis sold Arcade Square for $1 to Tony Staub of Brownfield Charities. 29 30 By 2005, Staub fell behind on property tax payments and offered the complex for sale for $6 million, threatening to tear down the Arcade if it didn’t sell. The complex’s utilities were turned off over non-payment. 1
A sheriff’s sale was held on eBay on March 12, 2009, and Gunther Berg and Wendell Strutz placed the high bid of $615,000. 1 30 Staub turned down the offer initially, hoping to get at least $3 million out of the sale, but was forced to sell by the county. 30 Berg and Strutz proposed restoring the Arcade to house retail, offices, restaurants and housing. Early estimates on the restoration were pegged at $30 million. 5
Berg and Strutz pledged to begin work on the exterior of the complex with a power washing by August. 5 Those redevelopment plans eventually fell to the wayside as the pair could not find a long-term tenant for the complex. 32 City inspectors declared the Commercial Building a public nuisance on May 15 2012. 1 31 32
Kuhn’s Building Renovation
Bob and Nancy Shiffler purchased the vacant Kuhn’s Building in 2002 and rehabilitated the building at the cost of $2.5 million. 39 The building was almost immediately fully leased, housing various marketing agencies, the Five Rivers MetroPark, and restaurants.
McCrory Building Renovation
McCrory’s filed for bankruptcy in 1992 and in February 1997, the downtown McCrory location closed. 40 42 The closure was part of a massive downsizing of the five-and-dime chain when it shuttered 300 of its last 460 stores.
The Shiffler’s acquired the vacant McCrory Building in 2003 40 and rehabilitated the building at the cost of $2.5 million. 39 The renovation included the restoration of the removal of the steel facade and the restoration of the original granite facade of the building.
A study completed by private consultants in June 2015 noted that any redevelopment should focus on a mix of 187 small- to medium-sized apartments, extended-stay business suites, and a boutique upscale hotel. 31 Demolition costs of the Arcade would vary between $8 million to $12 million depending upon which buildings would come down and which would be preserved. Any demolition could jeopardize the use of historic tax credits.
Berg and Strutz assembled a restoration team that included Baltimore-based Cross Street Partners and the Structural Group. 32
In September 2015, the city of Dayton authorized the spending of $700,000 on emergency repairs to the Arcade to buy time for redevelopment plans to take shape. 33 An out-of-state developer contributed $250,000 of the repair funds as a show of support for the property. Repairs byMiller-Valentine Commercial Construction included patching the roof, sealing windows, and cleaning and reattaching gutters.
On January 28, 2016, the city announced a Memorandum of Understanding with the development team of the Dayton-based Miller-Valentine Group and Baltimore-based Cross Street Partners to redevelop the Arcade in a two-phased approach. The development team was able to purchase the Arcade property after Berg reached a deal with the county to transfer the property deed to the land bank in exchange for the elimination of his tax liability. 36 The land bank agreed to transfer ownership of the five Arcade properties to the new development team.
The first phase of the project, estimated to cost $56 million, would include the rehabilitation of the Commercial, Fourth Street, Ludlow and Lindsey buildings and the restoration of the rotunda. 35 It would include retail space for a Warped Wing Brewery and a Boston Stoker coffee shop, with room for an additional cafe and grocery store, co-working office space, and 126 apartments. 3 Of those, 72 units would be located in the Fourth Street and Ludlow buildings while 54 units would be located in the Commercial and Lindsey buildings. Of the apartments, 26 would be market rate while 100 would be deemed affordable. 2
Phase two of the Arcade’s redevelopment would include the rehabilitation of the McCrory and Kuhns buildings, Gibbons Annex, and the Third Street arcade. 35 It would include 32 micro-apartments on the third through fifth floors spread between the Third Street arcade and Gibbons Annex. 4 35 The University of Dayton pledged to relocate its Entrepreneurial Center to the McCrory Building, occupying all three floors.
On June 28, 2017, the development team was awarded $5 million in competitive state historic tax credits from the Ohio Department Services Agency for the first phase of the Arcade rehabilitation project. 35
The companies applied for $4 million in historic tax credits for the second phase. 4
In March 2018, Miler-Valentine pulled out of the project and was replaced by the Model Group of Cincinnati and St. Louis-based McCormack Baron Salazar. 37
Planned funding for the first phase project included the application for 9% competitive housing tax credits through the Ohio Housing Finance Agency and state and federal preservation tax credits. 1 It was estimated that the first phase alone could cost $56 million to $80 million. For the first phase, the developers were awarded $5 million in historic tax credits and $20 million in low-income housing credits. 2 34 Construction on phase one is set to begin early in 2018 and take 14 to 18 months to complete once all financing has been arranged.