DOWN BUT NOT OUT

More residents, upgrades bolster Cincinnati's hopes

Nicholas Paddock, a gallery owner in Cincinnati, talks with David Ginsburg of Downtown Cincinnati Inc. and two residents.

CINCINNATI -- On nice days, crowds gather in downtown's restored Fountain Square to people-watch, grab lunch, catch a Reds game on a giant outdoor screen, and become betrothed.

Friends surrounded Keith Litmon, 40, and Jodi Rushing, 38, on a balmy spring evening in April, oohing and aahing as their photos flashed across the JumboTron TV screen.

Squeals erupted as the big question popped up: "Will you marry me?"

"We want people to use the square for all different things," gushed Kelly Leon, spokesman for the nonprofit Cincinnati Center City Development Corp. "It's wonderful."

Seven years after a white police officer's shooting of a young black man sparked three days of rioting that put the brakes on downtown restoration efforts, momentum is building again.

Developers promise this summer to add another office tower - touted as downtown's tallest - to a skyline already crowded with names such as Procter & Gamble Co., Kroger Co., and Macy's Inc.

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Apartments are planned for the site of the former Riverfront Stadium, now a parking lot. They are among 1,100 rental and condo units officials expect in the next three years. Residents will join nearly 8,000 people who live downtown, according to local boosters. That's double the downtown population in 2000.

City officials just approved a $185 million streetcar system that will require backers to persuade businesses and private donors to kick in $35 million of that amount.

And entrepreneurs like Jeff Ruby are regularly adding restaurants to a downtown dining scene that, until recently, residents criticized as paltry.

His newest is Bootsy's, which he is developing with William "Bootsy" Collins, a funk artist who is in the Rock & Roll Hall of Fame in Cleveland.

Opening of eateries such as Ocean Air, BlackFinn, and Nada are helping erase Cincinnati's reputation as "Mayberry with room service," quipped Mr. Ruby, a colorful figure who tools around town in a red Ferrari convertible with a large cigar in his mouth.

The civic group Downtown Cincinnati Inc. counts nearly four dozen restaurants in the city core.

With 2.1 million residents, the southwest Ohio city is Ohio's largest metro area after knocking Cleveland from that spot.

Mounting concerns

Despite a growing population and downtown improvements, the souring economy of Ohio and the nation has raised concerns in the town that calls itself the Queen City.

The housing crunch has hurt condo sales and forced some developers to switch to rental units because lenders are insisting that half of units be sold before handing over construction funds.

"With the real-estate market being what it is, most of the 50 percent presale projects have slowed," said Patrick Ewing, an economic development manager for the city of Cincinnati.

And locking up financing for such projects is harder because many lenders have become more cautious, he said.

Officials are looking for a new developer for a prime piece of city-owned land after a rival abandoned plans this year for a $100 million, 22-story condominium complex.

"Many of the empty-nesters who want to move to downtown can't sell their homes in the suburbs," one official said.

Sid Robison has noticed changes.

"The economy is way down," said the horse-drawn-carriage operator as he waited in vain for passengers one afternoon recently. "Our business fell by half."

He has noticed more panhandlers, whose presence tends to discourage potential customers from strolling downtown streets. And he isn't convinced the city has fully recovered from the rioting in 2001.

The unrest caused nearly $4 million in damage and a public relations crisis. The shooting and complaints that police were stopping and ticketing black motorists more often than others prompted entertainers such as Bill Cosby and Whoopi Goldberg to boycott Cincinnati.

Built-in advantages

The city has overcome the problems, insisted Mr. Ewing.

"2001 was about the worst year anybody could have with the riot, Sept. 11, and the stock market decline," he said.

"It took three years to see some recovery. But we built energy and momentum in 2005 and 2006 and hit a peak last year."

Cincinnati's downtown has advantages over those of many other midsize and large Ohio cities.

On a recent weekday afternoon, it had the look and feel of the bustling central business district that has vanished in most cities across America.

Office workers dashed into Macy's and Saks Fifth Avenue for last-minute gifts. Car horns honked. Sidewalks were filled with people.

Downtown is home to six of the area's nine Fortune 500 companies: Procter & Gamble, Kroger, Macy's, Fifth Third Bancorp, insurer Western & Southern Financial Group, and Chiquita Brands International. That is more than any other Ohio city.

The downtown area had an office vacancy rate of 15 percent in the first quarter, compared with 18 percent in the metro area overall, according to commercial realty firm CB Richard Ellis.

In contrast, the firm said more than a quarter of office space was empty in downtown Dayton at the end of 2007, the most recent data available. Toledo's 22 percent rate was second-highest among Ohio's six largest cities during the same period.

A decline in jobs

Separately, Cincinnati experienced a steep decline in downtown employment this decade.

Between 2000 and 2003 - the most recent year for which complete figures are available - the ZIP code that includes the downtown improvement district, established by merchants under Ohio law, lost 11,856 workers, a 14 percent decline, according to the U.S. Census Bureau. The figures don't include government workers.

Still, private businesses employed 72,433 people in the downtown area who were paid $4 billion as of 2003, census statistics show.

About 136,000 of metro Cincinnati's 1.1 million workers are employed in government, although it is unclear how many are downtown, the U.S. Labor Department reported.

Residential possibilities

Boosters say 83,000 people work downtown, including government workers.

The Census Bureau stopped providing precise employment figures for the Cincinnati ZIP Code after 2003. Explanations vary.

Boosters hope that people moving into downtown to live will help fill the gap created when companies move out of downtown.

On a bright spring day that brought out dog owners walking their pets and mothers pushing strollers, design executive Patrick Korb supervised touch-up work on his restored townhouse, which dates from 1846.

He lives in an area known as the Ninth Street Historic District. "When I moved here in 1977 it was like the Bowery," he said. "There was an elderly man with a bottle on every stoop. Now people walk around and want to know what's for sale."

Nearby, across from Kroger headquarters, old buildings that once were havens for drug use and prostitution are being converted to shops, stores, and upscale housing.

Great American Ballpark, home of the Cincinnati Reds, shines in front of the downtown skyline along the Ohio River. With 2.1 million residents, Cincinnati has Ohio’s largest metro area.

Signs of progress

Nicholas Paddock waits tables in the evening to make ends meet. But he has high hopes for Nicholas Gallery, which he opened about a year ago.

The arrival of the gallery and surrounding businesses is a good sign for this stretch of East Court Street, where prostitutes once tossed keys to johns from upstairs apartments, said David Ginsburg, president of Downtown Cincinnati Inc.

Even the once-blighted Over-the-Rhine neighborhood - so named because of its proximity to an early German-immigrant settlement - is showing signs of new life.

The nonprofit Cincinnati Center City Development Corp., formed with encouragement and donations from local corporations, has invested $70 million there to convert dilapidated buildings into lofts and shops.

It is the same organization that manages Fountain Square after leading restoration of the longtime city symbol.

Still, Cincinnati had the third-highest poverty rate in the nation in 2006 at nearly 28 percent, according to a report last year.

And downtown boosters face hurdles.

Retailers such as Gap and the Limited left downtown. Officials put up $6.5 million in incentives to persuade Saks Fifth Avenue to stay.

Downtown planners are eager to keep the remaining retailers, though consultants have advised them that department stores are becoming a rarity in city centers in most communities.

"It is an area of great concern for us," conceded Mr. Ginsburg of Downtown Cincinnati. "We're glad to have what we have, but we want to make sure we keep it and grow it."

'A 10-hour city'

Others complain that downtown empties by 8 p.m.

"I'm looking for a downtown that is bustling both in the evening and at night," said George Vredeveld, an economist at the University of Cincinnati. "We need to make it more than a 10-hour city."

Meanwhile, plans for other projects move ahead. A development group led by Mario San Marco will break ground "as early as July" for the $300 million, 41-story Great American Building at Queen City Square.

The group was working to finalize financing in early spring. Two-thirds of office space is leased, Mr. San Marco said.

Annette Burgess, who is employed by a downtown law firm, is pleased with progress downtown.

"There are a lot more people," she said as she enjoyed lunch under the sun in Fountain Square. Ms. Burgess moved downtown after raising her two sons.

"I'm close to work," she said. "I have a car but I basically walk everywhere."