MIDDLE MARKET HIGHLIGHT, MARCH 2006

COLUMBUS, OHIO
Karen Stone, CCIM

“In Columbus, we grow in with a passion, and out with a plan,” says Mark Barbash, director of the Department of Development for the city of Columbus. In its 2005 Community Report, the Columbus Downtown Development Corporation (CDDC) reported that approximately $2 billion has been invested in new private/public development in downtown since 2000. And the cash flow doesn't show signs of stopping.

The private/public catalyst for downtown development is the Downtown Development Resource Center. Larry Fisher, president and CEO of the CDDC, comments on the one-stop shop they have created for downtown development. “All public and private resources and authorities needed to participate in development decisions are located in one office. Literally, developers come to one place to get information on, and approval for, their projects.”

Bob McLaughlin, downtown development administrator of the Downtown Development Office, describes another feature that makes downtown development-friendly. “The entire downtown district is zoned ‘downtown development,' a special classification that streamlines the zoning process,” he says. “The issue of land use regulation is taken off the table and the focus is shifted to good quality urban design that makes a contribution to downtown vitality.” Because of this, a number of proposed developments are scheduled to begin construction in 2006, including the new $29 million Main Street Bridge.

In Columbus's downtown, several brownfield projects are standing ready for groundbreaking. The former Gandy Field, which is now owned by the city, is being cleaned up and redeveloped as a headquarters building for a regional cable system owned by Time Warner. The $20 million, 140,000-square-foot first phase will be built on 24 acres that will later house two to three additional buildings of 40,000 to 60,000 square feet each. Remediation of the parcel, which is located near the north edge of downtown. will be completed early this year. Construction is scheduled to start before the end of 2006, with completion scheduled for mid- to late 2007. The Daimler Group is a primary investor in the development.

Grange Insurance has expanded its presence in downtown's Brewery District and is building a new 200,000-square-foot building, doubling its current size. It is expected that the 800 current employees will be joined by an additional 800 during the next decade.

West Edge Business Center, a 50-acre in-town industrial environment that opened in 2003, is being developed on the site of an old subsidized housing project. West Edge is currently home to eight businesses that together occupy 200,000 square feet. “In total, $60 million has been invested in the project to date,” Barbash notes. “We have commitments for an additional 200,000 square feet that have yet to be built.” The Center is located within minutes of downtown in the neighborhood area of Franklinton.

As a result of downtown's commercial resurgence, successful housing and multi-use projects are popping up. RiverSouth, a 23-acre, 19-block site along the Scioto River, was recently covered with a number of surface parking lots. CDDC, the driving force behind the redevelopment, envisions this area as a revitalized urban hub with more than 1,500 lofts, apartments and condos interspersed with restaurants and retail. The phasing of the project is currently being designed and construction is expected to start by the summer.

The former Lazarus department store building, which forms the northern boundary of the new RiverSouth mixed-use community, is being renovated into 1 million-square-foot office complex with ground-floor retail and restaurant space.

Downtown housing is booming. By the end of 2005, approximately 850 housing units were under construction and another 1,780 were in the pipeline, totaling more than 3,600 units that have come online in downtown since 2002, with an investment value of more than $390 million. Projects include 56 condo units in Carlyle's Watch at Third and Gay streets; 8 on the Square, which will include 23 condos at High and Broad streets; and the 35-unit Hartman Loft Condos at Fourth and Main streets.

Nationwide Insurance, the largest private employer in Columbus with more than 7,000 employees, and its parent company, Nationwide Realty Investors, have taken a front seat in the Arena District, another major mixed-use downtown redevelopment. The Arena District concept was born in 1998 when Nationwide announced it would build a new sports and entertainment arena for the city's NHL team, the Blue Jackets. After seeing the success of the arena project, Nationwide proceeded to develop an urban village on the surrounding 75 acres. Today, the master plan for this mixed-use district is 75 percent complete, with more than 1 million square feet of Class A office space, 350 residential units (with more on the way), and approximately 400 retailers and restaurants. Last year was a record year for the Arena District with various projects, totaling 515,000 square feet, under development. The area has now become synonymous with entertainment and nightlife for the 2.5 million visitors that are drawn to the Arena District each year. “It is amazing what has been developed on land that used to be gritty industrial [space],” McLaughlin says.

“And there is more to come,” Fisher adds. “It was just announced that the existing arena will be joined by a new stadium for a minor league baseball team affiliated with the New York Yankees. Good things just keep coming and the momentum in downtown is exceptional.”

Outside of downtown, Norfolk Southern is building a new intermodal facility on the south side of Columbus near Rickenbacker International Airport. Currently a major distribution hub, the area has 13 industrial parks housing more than 100 companies, and has benefited from over $100 million in investments. The new facility will be an addition to the current Norfolk Southern facility and will fuel the growth of the airport. “With this perfect combination of rail, air and trucking capabilities, it is expected that during the next 15 years, the facility will catalyze the development of more than 30 million square feet, an influx of $5 billion in investment and will provide for 60,000 direct and indirect jobs,” Barbash notes. The city and Pickaway County have entered into a joint economic development district, supplemented by federal funding, to finance the facility's development.

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