MIDDLETOWN MOVING FORWARD UPDATE
Efforts could make the organization — modeled after other funding programs such as Cincinnati’s 3CDC, Hamilton’s CORE Fund, and the Catalytic Fund in Northern Kentucky — a bigger player in local development, its leaders say. Gap financing from Middletown Moving Forward, coupled with a downpayment and private bank loan can help developers raise the capital they need to make job-creating investments such as renovating empty buildings.
The goal is to raise a total pot of $5 million worth of commitments from financial institutions, community foundations or other sources, said the group’s Interim Director Calista Smith. City government has not pledged any taxpayer dollars at this time for the investment fund, Smith said.
“Right now we have been in heavy rotation visiting regional investors… promoting our business plan,” Smith said. “The process can take a long time for those commitments to come through so right now we’re in a waiting pattern… but we’ve been encouraged by response to our plan.”
“We still think for the Middletown area we’ll focus much more on the gap financing,” she said.
— Staff Writer Chelsey Levingston
A nonprofit fund created to invest in downtown and Main Street area development has grown its holdings to 25 Hamilton properties it hopes to restore and return to private sector hands, according to its executive director.
The Consortium for Ongoing Reinvestment Efforts (CORE) Fund, launched in December 2012, has raised approximately $7.5 million so far to acquire blighted properties and make nontraditional loans to developers in these key areas of the city, said Director Mike Dingeldein.
But the CORE Fund’s growing list of property acquisitions represents a change of plans from even just a year ago, when intentions were to wait to sell one of the six High Street area properties it owned at the time before buying up more.
“I think we have morphed and evolved a little bit from where we started,” Dingeldein said.
At first, the group thought it would fill a niche providing some gap financing for real estate projects, but no loans have been awarded yet.
“As we got out there, getting the buildings like the former Elder-Beerman and Fifth Third in some kind of position where they could be rebooted was even more important because they were too risky for the opportunist private sector to take on,” Dingeldein said.
“StarTek couldn’t have been a better example of why when we had the buildings teed up, it could immediately be put into play,” he said.
When Colorado-based StarTek announced plans in February to open a call center later this year in the former Elder-Beerman building at 150 High St., the win was credited to the city and the CORE Funds' readiness with architectural drawings of the renovation work to be done, and quick responses to company questions. Once fully operational, StarTek could create nearly 700 jobs in downtown Hamilton. The first StarTek workers are expected to move in this July, with more moving in at the end of summer after renovations are complete.
Meanwhile, taxpayers have also backed the CORE Fund’s growth. So far, the city of Hamilton government has invested $2.9 million in the CORE Fund including dollars transferred from the Central Benefits Fund, which was money set aside in 2012 for unemployment and retirement payouts that was never used; past borrowing proceeds; and General Fund money, according to the city’s Chief of Staff Brandon Saurber.
Other CORE Fund investors include Hamilton Community Foundation, First Financial Bank and U.S. Bank.
“I think what’ll happen is with what we’re doing now, we’ll see continued interest in downtown Hamilton,” said Rick Demmel, community bank president for U.S. Bank and CORE Fund board member.
“They’re short-term investments that are meant to in the long-term attract other investors because of what we have done to spur on that economic development or improvement in an area,” Demmel said. “We need to recoup those funds so that we can have them available to use for other projects and to lend out.”
Properties owned by the CORE Fund include previously empty commercial buildings such as the former Elder-Beerman store, which is now being remodeled for new tenants such as the StarTek call center, Kettering Health Network and others.
The CORE Fund also owns historic and residential properties such as an apartment building at 216-218 Buckeye Street, according to Dingeldein.
And the CORE Fund has received property from the Butler County Land Bank including at 322 N. Seventh St.
Since the Journal-News reported in April about the CORE Fund's plans to focus on Main Street, "Hamilton's second downtown," the organization purchased in May through a receivership sale six buildings, five in the 200 block of Main Street and one on North D Street, for a total $105,000.
Going forward, plans are not to become a major landlord, Dingeldein said. The fund is limited by investor contributions to how much property it can buy. However, CORE Fund does receive proceeds from its tenants — including retailer Sara’s House that opened in the former Hungry Bunny building and renters of some apartment units — that it can re-invest into other property maintenance and purchasing, Dingeldein said.
Eventually, the goal is to sell buildings. For example, once occupied with businesses, the former Elder-Beerman building might attract a real estate investment or property management company interested in buying it for profit, he said.
“Our long-term goal is not to hold these properties… and hopefully get them back into the private sector,” he said.
About the Author