FORT WAYNE — the long-awaited mixed-use building of retail, office and apartments next to Parkview Field – appears to be largely unique among cities Fort Wayne’s size in the Midwest.
Critics decried the delays in the project as developers worked to pull together scarce financing, but others point out that with the economy in tatters, little or nothing was being built anywhere, especially in downtowns.
And now that construction is under way, it is further along than projects elsewhere, experts say, making Fort Wayne uniquely poised to take advantage of a recovering economy.
The estimated $18.5 million building was to have been completed by June 2009, but developers couldn’t get loans to build it when the economy collapsed. Now, with a new developer group, tenants are expected to begin moving in in late December.
Jason Tolliver, who heads the research department in the Indianapolis office of commercial real estate services firm Cassidy Turley, said The Harrison has several things going for it, but the most important is its part in a well-thought-out plan for downtown.
“Most cities of Fort Wayne’s size have some type of strategic plan. Most everyone has plans for revitalization of downtown. But all of that really slowed down coming into the recession,” Tolliver said. “Some of it is just now coming back on line.”
He said the critical factors in a project like this one are that it’s part of a well-thought-out plan that people believe in, that it has some sort of public-private partnership and that it’s the right scale.
“You don’t want to announce a big new tower, you don’t want something dramatically bigger than everything else,” Tolliver said. The fact that one-third of the retail space on the first floor is rented, all of the office space on the second floor is leased, and 16 of 43 apartments are already spoken for means it is the right size, he said.
“That level of leasing off the bat is good anytime. It’s remarkable now,” Tolliver said. “I think you guys are in a great position in Fort Wayne.”
While there is new construction taking place in other midsize downtowns, Tolliver said those projects are few.
Michelle Luce, marketing director for BND Commercial, which is the leasing agent for The Harrison, said she’s not aware of any similar projects.
“It’s certainly unique for our part of the region,” Luce said.
Greg Leatherman, executive director of the city’s Redevelopment Commission, which is overseeing the Harrison Square project, said he doesn’t know what other projects are out there, but given the economy, having 100,000 square feet of new construction downtown is not something to dismiss.
“My guess is we should be rightly proud of all of it – the Courtyard hotel, the ballpark, this project,” Leatherman said. “It really is gratifying.”
He said it also shows that the city made the right choices in how the project was built – with incentives from the city, but the actual development done by the private sector.
It wasn’t always easy to stick by that decision when the project languished as a hole in the ground, he said, but the alternative was much, much worse.
“The biggest mistake would have been to build a building, get it half-done, and then have it sit there empty and incomplete,” Leatherman said. “That would have actually hurt the area.”
He said officials also learned from mistakes in the past, where taxpayers were left responsible for debts when private developers failed.
“We can subsidize, we can build a (parking) garage, those are all good things, and things we need to do,” Leatherman said.
“But if the Courtyard failed on its financial obligations, the city would have no obligation to step in. The same with The Harrison. The city is in a good position.”
The city did $80,000 worth of site-preparation work to the land but then sold it to the developers, New Harrison, for $675,000.
The deal calls for Hardball Capital, owner of the TinCaps, to invest $1 million over 10 years into Parkview Field and to pay $50,000 annually for 19 years into a fund that can help New Harrison make their debt payments if the building is not rented. Money not used by the developer could be spent by the redevelopment commission.
The land is also part of a tax increment financing district, which means the new taxes generated by the development go into a special fund.
Normally, that money would be used for infrastructure improvements or to pay off city debt incurred building Parkview Field. But The Harrison deal calls for the first 10 years’ worth of taxes the building generates to be available to cover debt payments if revenue falls short.
Tolliver of Cassidy Turley said decisions made years ago have put Fort Wayne far ahead of other cities.
“A lot of cities that size – Grand Rapids, Akron, Columbus, Evansville – that have downtown revitalization efforts, they’re trying to figure out, ‘OK, how do we get a convention center downtown? How do we get this downtown?’ It’s the kind of development you guys have already seen,” Tolliver said. “The convention center, the hotel, the ballpark – you guys already have that.”
Furthermore, the growing residential market downtown, apartments at The Harrison and new condos coming to the remodeled Anthony Wayne Building will draw more stores and restaurants, he said.
“The retail follows rooftops,” Tolliver said. “As more people live downtown, the retail will follow. … And you can parlay that into future economic development.”
Tolliver said Fort Wayne also has a key factor many people take for granted but that can make or break revitalization efforts: Low crime rates. He visited Fort Wayne this summer and said it is difficult to overstate what an effect feeling safe can have on an area’s success.
“My feeling as an outsider coming in was Fort Wayne had big-city amenities but a small-town feel,” he said. “I didn’t worry walking around with my daughter, and there were lots of places to go.”