The Light Up the Square event draws patrons to Cincinnati’s Fountain Square over the Thanksgiving holiday weekend.

Since 2004, over $1 billion has been invested in redevelopment and new construction in downtown Cincinnati and the adjacent Over-the-Rhine neighborhood. Representatives from Erie, Pennsylvania; St. Louis; and Atlanta have visited the city in the last year to see how a combination of nonprofit redevelopment, historic preservation, land banking, and strategic acquisitions, funded by tax credits and corporate investments, have turned things around.

Cincinnati’s Over-the-Rhine (OTR) neighborhood, just north of the downtown core, was a troubled but architecturally rich, 300-acre (121 ha) neighborhood. In the past 16 years, an amazing turnaround–generally attributed to the nonprofit, private real estate development firm Cincinnati Center City Development Corporation (3CDC)–has transformed a crumbling neighborhood into a thriving test lab for bringing economic development to a distressed inner city neighborhood.

Although OTR has both the history and the “hipsters,” 3CDC’s primary focus is on the central business district (CBD). Joe Rudemiller, senior communications manager for 3CDC, says, “Our mission is to revitalize Cincinnati’s downtown urban core. We’ve renovated vacant historic structures, redeveloped civic spaces, filled vacant buildings with unique commercial tenants, and enlivened the civic spaces with interesting, family-friendly, free programming, all with the goal of creating vibrancy.”

The area of interest includes Fountain Square, the centerpiece public space of downtown that 3CDC has been programming since 2007. The “Central Parkway” that used to be the Miami & Erie Canal separates the CBD from OTR. The German population who settled in the area at the turn of the last century referred to the canal as “the Rhine,” which eventually spurred the neighborhood’s name.

3CDC is still working on reconnecting the two neighborhoods. The addition of a streetcar line that has somewhat underperformed on the whole doubled its ridership during a recent four day “Blink Cincinnati” arts festival. Ridership also tends to be higher on the weekends. A new grocery store planned for a location near the intersection of the two neighborhoods is expected to serve as an anchor.

While work on improving the connection continues, other cities are focusing on the clearly successful aspects of Cincinnati’s model for improvement. The Westside Future Fund (WFF) is a privately funded development entity created in Atlanta in 2013 that is focused on four neighborhoods adjacent to the recently opened Mercedes-Benz stadium, home of the Atlanta Falcons.

The neighborhoods have experienced a drastic depopulation despite an increase in city dwellers. According to the Atlanta Regional Commission, the city of Atlanta added nearly 10,000 new residents from April 2016 to April 2017, a doubling of its average yearly growth rate. But the trend is the opposite in English Avenue, Vine City, Ashview Heights, and the Atlanta University Center.

John Ahmann, the executive director of the WFF, went to Cincinnati after hearing about the turnaround via one of his board members, who used to live there. He says, “The big story for us is that in 1960, 50,000 people lived in these neighborhoods. It was all African American because of the segregation of the time.  Now fast-forward and there’s only 15,000, so we’re two-thirds depopulated.”

Depopulation and crime reduction were major concerns in the early days of the OTR turnaround as the area struggled to recover from the riots of 2001. 3CDC worked with the local police to reduce petty crime and also identified a number of package stores (stores that sell alcoholic beverages in sealed containers for consumption elsewhere) that were hot spots for nefarious activities. The developer bought the stores, closed them, land banked the property, and eventually converted them.

The Over-the-Rhine neighborhood of Cincinnati has become well known for its vibrant restaurant scene.

In Atlanta, the WFF is also looking for ways to make the troubled neighborhoods safer by working with the Atlanta Police Foundation on moving police officers into neighborhoods with financial help coming from local businesses, including Pulte Homes and the Arthur M. Blank Foundation. Blank owns Home Depot and the Atlanta Falcons. The WFF has started construction on 20 new homes for police officers in the troubled neighborhoods.

Cincinnati leaned on historic preservation tax credits to stop the destruction of vintage buildings and to finance their renovation. Historic buildings are big in Missouri and hold a valuable key to the Downtown Community Improvement District, a 180-square-block area located in the center of downtown St. Louis. Improvements in the district have been partially financed by the U.S. Bancorp Community Development Group, a development subsidiary of U.S. Bank.

Stephen Kramer is a senior vice president at Bancorp; he is based in St. Louis and has been to Cincinnati more than once. Kramer says, “Missouri led the nation and St. Louis specifically in historic tax credits used in the early 2000s. There was in excess of a billion dollars invested. We have an amazing inventory of historic buildings that were converted to mixed use.” Since then, employing historic tax credits has become a political issue in Missouri as some argue about market distortion.

Tapping private funding from corporate partners with national headquarters in downtown Cincinnati including Procter & Gamble and Kroger was another driving force. Kramer says, “The support from the major employers’ deep pockets that gave the initial support to start them up was key. 3CDC is now more or less self-sustaining.”

In Atlanta, the WFF has been focused on simultaneously developing a land use plan by working with new urbanist Dhiru Thadani, and fundraising, which has logged over $200 million in commitments. Contributors and partners include the city of Atlanta, the Atlanta Housing Authority, a HUD Choice Neighborhood Grant, the Chick-fil-A Foundation, the Georgia Power Foundation, Cox Enterprises, Delta Airlines, and Georgia Pacific.

Atlanta has also come up with an answer to concerns about gentrification. Ahmann says, “We have a real focus on resident retention—if the revitalization is successful, taxes will rise and they won’t be able to afford the taxes, because appraisals will go up. So, we announced an antidisplacement tax fund that says if you’re a resident in the neighborhood right now, the WFF will pay future tax appreciation.”

Nonprofit development is also a key ingredient to the mix. Ahmann says, “When you’re looking to maximize dollars, especially when you’re raising social impact dollars with philanthropy, people want that to go as far as it can.”

Beyond everything else, strong leadership may be the secret sauce. Kramer says, “The city’s willingness to step aside and let 3CDC do their thing and provide support where needed was another key to success.”

Additional Resources: