First phase of Queen City Square to break ground n

[montecarloss]

New office building planned

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By Greg Paeth

Post staff reporter

Developers plan to break ground as early as next month on a $62.5 million, 15-story office building and parking garage downtown.

The building, planned for Third and Broadway, would be the first new office building in downtown Cincinnati in more than 10 years.

The real estate division of Cincinnati-based Western & Southern Financial Group plans to build eight floors of office space, 180,000 square feet, and seven above-ground stories of parking at 333 Broadway.

The project is being described as the first phase of Western & Southern's long-discussed Queen City Square development, which has a 37-story skyscraper planned as its centerpiece. There are no concrete plans yet to build the high-rise, which has been discussed off and on for 15 years.

But Western & Southern's Eagle Realty Group has received approval from the city's Urban Design Review Board to move forward on the smaller building.

The board and Eagle will meet again Tuesday to discuss several design recommendations made earlier this month.

The board makes recommendations to the city manager, who makes the final decision on design board questions. City Manager Valerie Lemmie was out of town Friday and unavailable for comment.

The project is moving ahead as the office vacancy rate downtown -- between 11 and 13 percent -- is the highest it's been in years. However, the economy appears to be on the upswing, bringing confidence that businesses may soon be expanding.

If Eagle breaks ground, it would represent the first new office building construction in downtown Cincinnati since the 26-story 312 Elm building opened in 1992.

In a memo to the mayor and City Council, Lemmie said the project "is anticipated to start as early as December 2003.''

He said the company also said it wants to move ahead on the 37-story high-rise as soon as possible but won't begin construction until it has pre-leased a portion of the building.

Mario San Marco, who heads the Eagle Realty Group and made the presentation to the design board, was not available for comment Friday.

Plans filed with the city call for the main entrance to be at the northwest corner of Third and Broadway.

Four more floors of parking would be built underground to accommodate a total of 650 cars on 11 parking levels.

Among the major details yet to be finalized are a tax increment financing agreement with the city and a separate contract with the Port of Greater Cincinnati Development Authority, which is expected to play a major role in the financing.

The port authority may wind up securing a bank loan that would be paid back by Eagle Realty Group or issue bonds for the project, said Chad Munitz, the city's economic development director.

He said the tax increment financing agreement has not been completed because construction costs have not been firmed up.

Under the agreement with Eagle Realty, an amount equal to the annual property taxes on the new building would be paid by Eagle into an account that would cover part of the construction costs. At the expiration of the TIF agreement, the company would begin paying property taxes to the city.

"It would be a real exciting addition to downtown,'' Munitz said. "It's a performance-based project where the developer has to do something and the city will hold up its end of the agreement. It's a good use of taxpayer money which could bring some high-quality jobs downtown.''