Dayton to pay for Schwind cleanup

Added $215,000 will get student housing project moving again.

By Cornelius Frolik
Staff Writer

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The city of Dayton will spend $215,000 more than it had originally planned to pay for the demolition and cleanup of the Schwind Building property, which officials said will help the roughly $18 million student housing project move forward.

A federal deed restriction on the Schwind property along Ludlow Street meant the Student Suites developer was unable to secure financing that would have covered the demolition and cleanup costs, said Aaron Sorrell, Dayton’s director of planning and community development.

The city is increasing its contribution to $1,215,000 from an original commitment of $1 million to fulfill its promise of fixing issues on the Schwind property, officials said.

“The reason we pushed this forward is because there was a shared sense of responsibility,” Sorrell said. “Our agreement with Student Suites is we’d deliver the Schwind property free of any liens and encumbrances: We have not been able to do that because of the deed restriction.”

Student Suites plans to build a 350-unit housing complex on the north side of Fourth Street by Wilkinson Street to serve Sinclair Community College students. The complex was originally planned for along Ludlow Street.

But the site plan included the Schwind property, which

has a deed restriction from the U.S. Department of Housing and Urban Development that limits the property to low-incoming housing, and the Students Suites project does not qualify.

The city is working to transfer the deed restriction to another eligible property, but HUD lost its authority to transfer deed restrictions when the federal government shut down last year, Sorrell said.

Student Suites’ financing for the housing project fell through last year because of the deed issues.

The city had already committed $1 million to help with demolition costs and the costs of removing liens from the Schwind property. Student Suites would have been responsible for demolition costs above that amount.

Dayton City Commissioners on Wednesday night approved using $215,000 from the Moving Ohio Forward Demolition Grant Program to clean out the Schwind property’s foundation as well as to cover the costs of grading and seeding the land, Sorrell said.

The expenditure is consistent with the goals of the grant program, and it helps the city fulfill its promise of delivering the Schwind property free of restrictions, he said.

“The nice thing is that it’s additional grant funds we received, so it’s not city general fund money,” Sorrell said. “Unfortunately, we have to put additional funds into this project.”

Sorrell said the money otherwise would have been spent removing blighted and abandoned homes.

Officials said the city will continue to work to get the deed restriction transferred, but Student Suites has redesigned its site plan and split the project into two phases to circumvent the HUD requirements.

The first phase would include construction of the student housing complex along Wilkinson and Fourth streets, featuring about 350 housing units and about 2,500 square feet of retail space.

The second phase would include the Schwind property and the adjacent former Dayton Daily News property. The development could feature housing exclusively or a mix of housing and retail, depending on market demand, said Steve Papa, the principal partner with Student Suites, which is based in Missouri.

The first phase “has just been re-laid out, and we’re not incorporating anything to do with the old Schwind building at this point,” Papa said. “Once we start phase two, we will go back to the city, talk with them and make sure they are on board with everything we want to do. ... We know there is market for phase one, and the market will drive phase two and the complexion of it.”

The city’s decision to pay to finish cleaning the Schwind property is important to the look and development of the site, Papa said. He said he is confident that his company will be able to quickly secure financing for the first phase of the project, which could transform that part of downtown.

“I think this could be a spark to create a whole new entertainment center, because you bring 350 kids to the downtown area, and with them living there, that brings all kinds of opportunities for other retail and other things,” he said.

The timeline calls for the student housing to open by the fall of 2015, Sorrell said.

Sorrell admits that footing the bill for the remainder of the Schwind cleanup means the city will not be able to remove as many blighted and abandoned homes as it could have otherwise. But the additional expense will help a project progress that will provide a boost to the revitalization of downtown, he said.

Contact this reporter at 937-225-0749.