After successfully attracting new tenants to help fill empty storefronts along High Street, the CORE Fund is now shifting gears and has started investing in Main Street area properties.
Launched in December 2012, the Consortium for Ongoing Reinvestment Efforts (CORE) Fund is a private nonprofit that has raised nearly $7 million to acquire blighted properties and make non-traditional loans to developers for projects in the area of High and Main streets.
“Investing in these important areas of the community will attract people to the city on a short-term basis, but more importantly, encourage them to stay for the long-term,” said John Stretch, broker for North Ridge Realty Group, which specializes in commercial real estate. Among its clients are Main Street property owners.
“When people stay in an area, the businesses will follow, and the cycle repeats and everyone ultimately benefits,” Stretch said.
The fund has purchased about 15 Hamilton properties to date, most recently adding the former Homestead restaurant at 139 Main Street, and a duplex at 310-312 Main Street, to the portfolio, said the CORE Fund’s Executive Director Mike Dingeldein.
“We’re not obviously leaving High Street, but we’re definitely turning our focus to Main Street just to see if we can’t start some of the same momentum that we have downtown,” Dingeldein said.
The CORE Fund’s new focus will join efforts by the city, which also bought and demolished dilapidated property along Main Street last year and plans to install more security cameras there.
Main Street is Hamilton’s second downtown, said City Manager Joshua Smith.
“We have witnessed redevelopment of key properties along High Street in the past couple of years, such as the Mercantile Lofts, Artspace, Elder Beerman, Robinson Schwenn, Sara’s House, High Street Café, and others,” Smith said in a written statement. “Now we are seeing development taking place off of High Street in an organic manner …”
“It’s important to shift our focus west along the most visible, impactful stretch of road in Hamilton.”
But attracting new development to Main Street won’t be the same as High Street. Whereas the city recently secured plans from an international call center to open downtown and create nearly 700 new jobs in the former Elder-Beerman building — acquired by the CORE Fund in 2013 — Main Street will be more likely to attract smaller retail and restaurant storefronts.
The CORE Fund has had some success with retailers too. Sara’s House, which sells home décor, gifts, jewelry and refurbished furniture and fixtures, opened May 2014 in the former Hungry Bunny building at 254 High Street. The building was also purchased by CORE, which paid to build out the tenant space.
“To me, downtown was ground zero, and then the neighborhoods around downtown are kind of next. That’s German Village, Rossville, Main Street, Dayton Lane, Second Ward, the southeast business district,” Dingeldein said.
It’s hard to attract new private investment in Main Street without a helping hand from the public sector because investors can’t justify spending the amount of money required to restore buildings to rentable quality. That’s because, as it is, they can’t get their money back, he said.
Karen Underwood Kramer and Gayl Underwood, sisters and co-owners of Richard’s Pizza at 409 Main St., have owned commercial and residential property on Main Street for decades now. Underwood Kramer is “very hopeful” that Main Street’s renaissance is around the corner.
“If I were to open up another business in Hamilton, I would do it on Main Street,” she said. “You can put your sign up, and you are immediately getting advertising that you would have to pay for anywhere else in the city.”
Though she and her sister started working in their father’s pizzeria at age 10 in the 1960s, they took over the business in 1987 and began buying property up and down the corridor, and both lived on Main Street for a time, too. She considered the period between the 1960s and the 1980s to be Main Street’s heyday, when small retail shops lined both sides and you knew everyone from the store owner to the delivery boy by name.
“And when I look at all the businesses that left, it was when the owners retired, and instead of selling the business after they retired, they just closed up,” she said.
Two ways Hamilton can foster future Main Street development is to group many buildings into one large project or seek regional developers, contractors and business owners who specialize in small-scale historic redevelopment, said Jody Gunderson, the city’s economic development director.
“Main Street is different from the Central Business District on the east side of the river in that the buildings are generally smaller,” Gunderson said in a written statement. “Typically developers are looking at larger projects, or an aggregate of smaller projects in order for them to make financial sense as it relates to the “soft costs” of development, like management costs, legal fees, etc.”
Underwood Kramer added that anyone who thought that a business on Main Street wouldn’t survive should look at Richard’s Pizza itself: Their sales are up so far this year, and they have customers going in and out all day.
The CORE Fund is actually the name of an umbrella organization consisting of three funds: the CORE Investment Fund to provide gap financing for projects; the CORE Strategic Acquisition Fund for property purchase and building improvements; and the Residential Redevelopment Fund for acquisition of historic residential property and property improvements.
A total more than $6 million has been raised. Three million was donated to the investment fund by U.S. Bank, First Financial Bank and Hamilton Community Foundation ($1 million each). About $3.3 million combined has been donated to the strategic property fund by the City of Hamilton and the foundation. The foundation contributed an additional $625,000 to the residential redevelopment fund, according to Dingeldein.
Purchased properties will be readied for development — cleaned-up, with some restoration work, liens settled and environmental studies completed, Dingeldein said.
The fund provides lower-interest capital with lengthier payback terms than traditional business loans to applicants that qualify. CORE Fund loans are meant to cover up to 10 percent of a project’s cost, and not be the sole source of financing.
No loans have been made yet.
CORE Fund building tenant rents pay for property taxes and utilities, for example, Dingeldein said.
“What I’m hopeful they can do is some of the same kinds of projects they’ve been able to do on High Street, which is redevelopment of buildings and success attracting tenants to buildings,” said Greater Hamilton Chamber of Commerce President and Chief Executive Officer Kenny Craig.
“When the momentum builds we’ll see some of the both small business and large businesses taking another look at Main Street for locations for their businesses, which is similar to what’s happened downtown,” Craig said.