The city and its private partners have been heading for some sort of retail development at the site for several years. Along with Eagle Realty Group -- the arm of Western Southern Life Insurance Co. negotiating a deal -- the city's already spent several million dollars to buy the site's existing building, relocate its tenants and tear it down, among other expenses. But the previous goal of a Maison Blanche store evaporated when its parent company was sold in 1998.
Since then, Eagle Realty has been pursuing Nordstrom and other retailers for the site, with the focus switching to Nordstrom after Cincinnati City Council rejected riverfront development with a Nordstrom store as an anchor.
But to get the upscale, Seattle-based retailer downtown, the city will likely need to come up with half of the $50 million needed for the project -- which is $10 million more than the city previously allocated for the corner. The rest of the money would come from $10 million in private funding, $9 million in tax increment financing (bonds repaid through future tax revenues) and a $5 million state loan. Most of the city's money would pay for a 400- to 500-space parking garage, sidewalks and other building work that would probably be spent on any retail development there.
The Nordstrom store would complete a concentration of large-scale, mostly upscale retail surrounding the intersection of Fifth and Race, including Saks Fifth Avenue, Lazarus, Tiffany and Co. and Tower Place Mall.
So what will the city's non-upscale citizens -- whose taxes would partially pay for the project -- receive in return?
A stronger downtown with more retail following on the footsteps of Nordstrom, answered a couple of people with ties to the project
"I think it benefits everyone overall because of the things that it attracts," said Myron Hughes, downtown development manager for the city's economic development department. That might include other stores such as Crate & Barrel and FAO Schwartz vying for the disposable income of affluent shoppers.
"Downtown needs to be the heart of the city," said Tom Stapleton, senior vice president of Eagle Realty. "So we need to work to make it as strong as possible."
Nordstrom spokesperson Paula Weigand said the question should be answered by Stapleton and other third parties. When pressed further about why the tax money of non-Nordstrom shoppers should be spent on the location, Weigand said those questions are best dealt with at the city council level.
"The only thing that bothers me is whether it will influence city council ...," Stapleton said.
Several councilmembers, such as Jim Tarbell, are hesitant to spend the money on a Nordstrom store, according to a Cincinnati Enquirer report. Tarbell would rather invest the money in small businesses and downtown housing.
He, among others, is also fretting about competition from a recently announced Nordstrom store in Warren County. That store is the first anchor announced by the Rouse Co. of Maryland, which is developing a mall off of Mason-Montgomery Road with stores unique to the Cincinnati area, according to Warren Wilson, Rouse's vice president for new development.
The Rouse Co. isn't thinking much about potential competition from a downtown Nordstrom.
"There's such as distance between them," Wilson said. "We really haven't factored it in."
If Nordstrom is interested in building two stores in the Cincinnati area, they plan to succeed with both stores, says Evert Hauser, assistant director of development for the Indianapolis Bond Bank.
"The retailers aren't going to cut their own throats by building too many stores," said Hauser, who helped lure a Nordstrom to Indianapolis in the early 1990s when Nordstrom didn't have much of an interest in opening stores in the Midwest. That store now serves as the main anchor of the 800,000-square-foot Circle City Mall in downtown Indianapolis, which cost $314 million, including $178 million in city money, Hauser said.
Eli Lily, the Indianapolis-based pharmaceutical company, had to help secure foreign financing for the project because no American banks would lend money for it. Five years after it opened, it turned out to be a good investment, according to Hauser.
Wiegand said Nordstrom has a goal of two stores in Cincinnati.
"We think that we can serve the community with two stores," she said.
But if city council doesn't want the store and the Warren County store is built, that puts downtown at an increased disadvantage compared to the suburbs, Stapleton said.
When asked about Tarbell's idea to invest the money in small business development and housing, Stapleton said that needs to be done as well.
"It's not an either/or proposition," he said.
The city has yet to identify the money needed for the Nordstrom proposal, according to Hughes. But it's something the city will keep in mind during its 2001-2002 biennial budget process.
So, if efforts to lure Nordstrom downtown fail or are rejected, what will happen to the site?
Stapleton said there have been discussions about what the company would do but not at length, because they've been focusing on landing a Nordstrom store.
"We've tossed some ideas around, but quite frankly ... we haven't pursued them that far," Stapleton said.