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OHIO STATE USES RETAIL TO MAKE CAMPUS SAFER

BY LEE KESSLER

One of the central Ohio’s largest mixed-used projects is not the work of a retail developer. Rather, it is Ohio State University that is undertaking construction of the $120 million South Campus Gateway, a six-block development of stores, homes and offices on its doorstep in Columbus.

The project is long overdue in this economically distressed area that has grown more dangerous over the years. Four students were murdered off campus in 1999, three in 2000 and another three in 2001. In July yet another student was among the victims of a triple homicide.

“Some of the areas adjacent to High Street have the highest levels of poverty and highest levels of crime in the city,” said Terry D. Foegler, president of Ohio State’s nonprofit Campus Partners for Community Urban Redevelopment. “The area was very distressed, very high crime, with an associated drug culture.”

Interestingly, the neighborhood’s decline has been accelerated by the closure of bars along High Street — an ironic contrast to the usual perception of bars being the culprit in an area’s downfall. It’s been more than a decade since the legal drinking age in Ohio was raised from 18 to 21, wiping out overnight a major chunk of business for the High Street bars that used to cater to Ohio State University’s 50,000-strong student body.

“At one point there were 30 liquor licenses along that area of High Street,” said Foegler. “But when the drinking age went up, the area became rougher and rougher.” Buildings fell vacant and began to fall apart, and criminals stalked the streets below them.

This time around, planners will build upon a broader and more substantial economic platform than bars. Scheduled for completion in 2005, South Campus Gateway will comprise five buildings containing 200 residences and 70,000 square feet of office space, all occupied by the university staff. One of the housing units will be devoted to students at the university’s Moritz College of Law, located on campus next to the site. The retail component will include a seven-screen cinema, restaurants, clubs and an all-night diner, rounding out the mix for what is designed to be a 24-hour neighborhood. There will also be a 1,200-car parking garage whose $4.5 million construction cost is being borne by the state. Federal assistance has come through the New Markets Tax Credit program, which awarded the project a $35 million tax credit allocation.

In January 1995, partly as a reaction to the murder of a student, the university formed Ohio State’s Campus Partners to prepare and implement a revitalization program for the neighborhoods around the university. Though controlled by the university, the group includes the city of Columbus, local civic leaders and merchants.

An artist’s rendering showing how Ohio State plans to revitalize the run-down area surrounding its campus with new stores, homes and offices.

The city of Columbus (Ohio’s largest, with 1.4 million people) has begun infrastructure work at the site of South Campus Gateway, at a cost of $5.7 million.

Foegler was named to lead the organization in the fall of 1996, having previously served as assistant city manager and director of development for the city of Dublin, Ohio. He spent his first 18 months on the job gaining the support of local community groups, making it clear that this project was for the benefit of all neighborhood stakeholders, not just the university. He also directed a nationwide search to identify a developer and, in May 1999, the job was awarded to the Druker Co., Boston, which became an equity partner in the project. Shortly after that, Campus Partners began acquiring properties.

“We made over 30 different acquisitions and 25 business relocations,” said Foegler. “The area was over 50 percent vacant when we started to buy and businesses were failing at a fairly high rate.”

The city helped propel the project, using its powers of eminent domain to force property owners to sell. Nevertheless, it took four years to secure the 7.4-acre parcel at a cost of $20 million, with the money coming from the university’s endowment fund. Campus Partners brought in Jones Lang LaSalle in September 2002 to replace Druker, after concluding it no longer needed an equity partner (the risk had become substantially reduced by the signing of a 20-year lease with Barnes & Noble and the decision by the university to occupy all the offices and a substantial part of the housing).

JLL, whose involvement in the project is on a fee basis, has substantial experience with developing multiuse projects for urban universities. It has completed such projects for the Georgia Institute of Technology (Technology Square) and the Indiana University of Pennsylvania (Sansom Common). On the latter project, Jones Lang teamed with the architectural firm of Elkus/Manfredi, Boston, which is designing South Campus Gateway.

The retail component of South Campus Gateway will be a quarter-million square feet, comprising a mixture of national, regional and local retailers. In all, there will be about 40 stores. About half of the project will be taken up by the housing and office space.

“Within the retail portion we do want to have distinctive national players at the table,” said Foegler, “but we’ll make a strong push to get regional and local tenants too — conceivably over 50 percent of the retail occupancy.” To enhance the search for local retailers, Campus Partners has brought in Greg Hanner of Dublin-based CEG Development, a company under contract with Jones Lang to provide leasing services.

Ohio State is not alone among urban universities in using retail development to reverse the deterioration of its neighborhoods. Others include Yale University (SCT, July 2003), the University of Pennsylvania, Georgia Tech and the University of Maryland, among others.

JLL says it likes to anchor its projects with bookstores, as it has done at the University of Pennsylvania and Georgia Tech.

“The bookstore not only serves as a gathering place for students, faculty and staff, particularly with the added amenities of food and drink,” said Herman E. Bulls, who leads the Public Institutions branch of Jones Lang, “but it also serves as branding for the university to the community and gives the community an opportunity to become a part of the university.”

At South Campus Gateway, Barnes & Noble has taken 50,000 square feet. As yet, no other retail signings have been announced, though Foegler said at press time that he expects to announce 10 more tenants by the fall. Campus Partners generated momentum with a presentation of the project at this year’s ICSC Spring Convention in Las Vegas.

“One thing we were a little bit concerned about,” said Bulls, “[was that] the project had been out on the street awhile and you heard of things maybe going stale. It’s been talked about for so long. … I would like to think that our firm’s reputation brought some legitimacy to the table.”

Retailers on Main Street, shown here in a rendering, will benefit from the approximately 30,000 people who pass by it each day and the 3 million visitors the university attracts each year.

Campus Partners says it expects the project’s benefits to extend well beyond the six blocks it occupies, something Bulls says happened in Philadelphia with Sansom Common.

“Our goal is to improve the neighborhood quality of life,” Foegler said. “Right now, very few of their goods and service needs are being met in and around High Street. Surveys indicate that there is a significant demand that is not being met. We think the value of the areas in and around this project will have a significant ripple effect.”

To that end, Campus Partners is creating a Business Improvement District for High Street merchants located outside the Gateway project. One immediate goal is to close the gap between the University District neighborhoods and the nearby, popular Short North neighborhood that has undergone a renaissance in recent years.

Foegler says that the university attracts about 3 million people a year and that nearly 30,000 people move along High Street every day. The five-mile trade area’s 562,000 people in 238,000 households boast an average yearly income of $56,159.

“We think the density that exists in and around Ohio State is an incredible asset to provide the kind of urban, mixed-use projects that can be so successful in adding vitality to an area,” said Foegler. “We’re working to meet the needs of all the stakeholders.”

Columbus Mayor Michael B. Coleman agrees. “Our partnership on South Campus Gateway is not only a great investment in the future of the University District,” he said, “it’s a major improvement for the neighborhood and the entire city.”

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