Eminent domain ruling overturned: Cincinnati OH News Record, 2/7/07

Impact of decision on Calhoun Street project unknown

By Ian Sexton

The Calhoun Street Shell gas station/Subway restaurant expansion held its grand opening only days after a Jan. 26 ruling in Ohio's First District Court of Appeals overturned the City of Cincinnati's use of eminent domain. This ruling overturned the original court ruling allowing the city to purchase the land where the former Hardee's and Arby's buildings stand on Calhoun Street.

The ruling cited the Norwood case, which was decided by the Ohio Supreme Court, as precedent.

The prospective retail tenants want to wait and see what the development plan will be, said Gerry Siegert, University of Cincinnati's associate vice president for Financial Affairs in the Office of the Controller.

"Everything up there is contingent on setting a plan ... until there is a development plan, retail tenants are slow to make a decision," Siegert said.

Due to the eminent domain reversal, the project is not able to expand as far west as originally planned, Siegert said.

The impact of the Subway/Shell station expansion is being determined, according to Siegert.

There are a number of investors and retail tenants who are waiting to commit to the project, but want to be sure of its future, according to Siegert. "It is something that is extremely complicated, something like the eminent domain can derail it," Siegert said. "To the extent, there has been difficulty developing an economically viable plan."

Matt Bourgeois, director of Clifton Heights Community and Urban Redevelopment Corporation [CHCURC] said he agrees. "We are going back to the drawing board with this project ... They want a viable development plan for the entire site," Bourgeois said.

It is unknown where the project goes from here. The city has 45 days from the date of the ruling to file for an appeal. "Without a complete development plan, it is hard to say what the effect of the eminent domain ruling will be," Siegert said.

CHCURC is waiting for the go ahead from UC, since the university is a financial backer of the project.

"We're ready to move whenever," Bourgeois said. While the project is being delayed, there are other things to work on in the mean time, Siegert said.

The City of Cincinnati is party to the eminent domain ruling. Scott Stiles, an assistant city manager, said legal counsel for the City of Cincinnati is still deciding whether to appeal.

"It rests solely in [the city's] hands," if they want to appeal the domain ruling, Bourgeois said.

The costs of the continual delays are minimal. Two costs, land holding interest and predevelopment costs, are associated with such project delays, Bourgeois said.

"Most of the land cost is in the ground, everything else has already been bought," Siegert said.

UC has funded the project with loans made from its endowment, according to Siegert. The endowment receives interest made on the loans. A few years ago the Board of Trustees voted to allow this investment because the interest from the loans would go back into the endowment, Siegert said.

Bourgeois and Seigert said they feel the investment is not in danger of being lost, but at the same time want to make the project as safe a bet as possible. "Nothing is a sure thing in real-estate," Siegert said, referring to the risk of investing in the project.

CHCURC and UC point to development of the Calhoun Street project as a positive one for the community.

"I just think this is something that the university really, really wants to see happen," Siegert said. "No one likes seeing the condition of the property the way it is right now."

Cincinnati OH News Record: http://media.www.newsrecord.org