New York Times – February 24, 2015
CINCINNATI — A rapidly growing sector for consumer research, coupled with a boom in construction and redevelopment, is renewing interest in Cincinnati’s downtown.
One measure of the city’s new relevance is the $85 million Global Operations Center for General Electric, with construction to be finished next year, in the Banks, an 18-acre Ohio riverfront development between the city’s baseball and football stadiums. The 12-story office building and the district will be served by a station stop on the 3.6-mile, $148 million Cincinnati streetcar line that is also expected to open next year.
G.E.’s operations center, one of five the company is developing worldwide, contains first-floor retailing, parking on the second floor and 10 stories of conference and office space, and can house up to 2,000 workers, 1,400 of them new to Cincinnati. The installation serves big development and manufacturing centers that G.E. operates in the United States, including lighting and aviation manufacturing sites in two Ohio cities.
The center is being built with the help of $101 million in city, county and state tax and investment incentives. In exchange, G.E. committed to employ at least 1,800 people in Cincinnati over the next 18 years, with an estimated total payroll of $142 million annually to start, or an average of $79,000 a year.
“Cincinnati was chosen due to G.E.’s longstanding presence in the state and southwest Ohio,” said Dominic McMullan, a company spokesman, “as well as a pool of local talent and skills required for the roles in the Global Operations Center. In addition, the state, county and city provided a competitive incentive package to G.E.”
Another big project that is competing with G.E. for attention is the Dunnhumby Center just a few blocks away. The $140 million, nine-story office building with 285,000 square feet opens in the spring, promising to restore the corner of Fifth and Race as one of downtown’s most prominent addresses.
Rising from a parcel that for more than a decade was a city-owned surface parking lot, the new building sits atop 29,000 square feet of ground-floor retail space and a six-level, 527,000-square-foot parking deck.
It is a joint project of DunnhumbyUSA and the Cincinnati Center City Development Corporation, the city’s nonprofit real estate development organization, known here as 3CDC. The building houses DunnhumbyUSA, a market analytics firm begun in 2003 that is jointly owned by Dunnhumby, a British data analysis company, and Kroger, the grocery store chain, which is based here.
Cincinnati’s recovery follows three nights of riots in 2001, and a plunge in the number of residents and businesses, after the death of an unarmed black man shot by police. A period of social and economic reckoning followed, with public meetings and a federal task force that investigated police relationships with the city’s black community and recommended significant changes. Thirty percent of the police force is black now, as is the chief of police.
The city’s big companies, in collaboration with Cincinnati and Hamilton County, also developed plans and investment funds for park reconstruction, business investments and new office and residential construction, all aimed at coaxing residents to live downtown and to establish more high-paying jobs.
In 2005, Fountain Square, Cincinnati’s deteriorated cultural and economic center, was rebuilt, prompting new office and retail development nearby. By then, Dunnhumby, housed in a downtown office not far from the square, had grown from four employees in 2003 to almost 100 employees. Some of the young workers moved into the first new apartments developed by 3CDC in the Over-the-Rhine district, the late-19th-century neighborhood where the riot started.
Dunnhumby achieved its rapid growth by inventing the algorithms and big data analytics to help Kroger understand consumer buying habits. The firm’s analysts, for example, found that men and women in two-income households with children typically spent about 16 minutes in a Kroger store. That piece of data prompted new designs in product displays — like one-stop sections for preparing school lunches — in stores that served upper-income single-family neighborhoods.
Dunnhumby’s clients include so many other big retailers and product companies, like Macy’s, which is also based in Cincinnati, that it now employs 750 analysts, programmers, software developers and marketing specialists, nearly 600 of them working in the city.
The company’s new office building, large enough to house 1,100 employees, joins a host of other new or renovated buildings near Fountain Square, including the $56 million, 156-room, 21c Museum Hotel that opened in 2012 two blocks away.
“We see applications for our work across so many industries. Big data really has no barriers,” said StuartAitken, DunnhumbyUSA’s chief executive. “We have 35 or 40 job openings right now we’re trying to fill. We couldn’t be in a better place than this city.”
The Dunnhumby Center is seen here as a kind of 21st century Kitty Hawk for a sector that Cincinnati executives call “consumer science.” According to REDI Cincinnati, a regional business development organization, hundreds of consumer science data analytics firms now employ more than 54,000 professionals in Cincinnati and its near suburbs.
Their work is related to some of the city’s core marketing companies, which include Procter & Gamble and other large consumer products companies that employ over 60,000 more brand professionals in and around the city, according to REDI Cincinnati.
“Consumer science developed very fast here,” said Johnna Reeder, REDI Cincinnati’s president and chief executive. “You can see it becoming visible in new offices, and in the demand for new apartments all over downtown.”
Much of the focus of that interest is in Over-the-Rhine where 1,100 to 1,400 new residential units are either under development or planned over the next two years, said Anastasia Mileham, vice president for marketing and communications at 3CDC, the neighborhood’s principal developer.
That surge in interest follows $335 million in investment by 3CDC to renovate or construct new buildings for 176 apartments, 17 restaurants, 23 new offices and 14 retail stores. The total includes $48 million to restore Washington Park and build a parking deck underneath, a project completed in 2012.
Additionally, 3CDC is supervising the $130 million restoration of Music Hall, a 136-year-old, 3,300-seat performing arts theater in the district and home of the Cincinnati Symphony Orchestra. The project is financed by tax credits, city investments, grants and donations.
Over-the-Rhine, which a decade ago had 500 vacant buildings and 700 vacant lots, has become one of Cincinnati’s choice residential neighborhoods for young professionals, and is now a busy downtown office, retail and entertainment district.
On Martin Luther King Day a year ago, the People’s Coalition for Equality and Justice, a civil rights group, organized a demonstration to attract attention to housing displacement fostered by climbing real estate prices in Over-the-Rhine. Property values climbed over 25 percent in 2014, faster than any other Cincinnati neighborhood, according to Hamilton County figures.
City officials responded that the 40-square-block neighborhood has 1,000 units of affordable housing. Executives from 3CDC added that their projects incorporated space for subsidized work force housing. For instance, 30 of the 67 rental apartments in the four-year-old, $55 million Mercer Commons project are designated for families earning $26,000 a year or less.
“There’s been some public discussion about gentrification,” said Randy Simes, an urban planner and editor of UrbanCincy.com, a news site that reports on the city’s development. “Early on, it was less of an issue because there were so many empty properties. Now developers are coming in to buy properties that have residents. We’re finding that some are upset because they need to relocate. Others welcome the opportunity to get out of the neighborhood.”
Ms. Mileham of 3CDC, a senior executive of a company that now employs 60 people and operates on a $5 million annual budget, said the city was “really changing.” “So much is happening and it’s happening now so quickly,” she said.
In December, 3CDC itself moved into a 28,000-square-foot, four story, 86-year-old brick manufacturing warehouse on Walnut Street, renovated at a cost of $7.1 million. The building is a microcosm of contemporary Cincinnati. Its new tenants — a consumer science marketing firm, a law firm, a bar and restaurant, and an urban development agency — form four of the important groups of the city’s new economy and culture.