“A powerhouse quadrant.” That’s how John Royer of Kohr Royer Griffith Inc. describes the area that’s home to a major new project he represents, UA Gateway. “We are very excited about the quality of the tenant roster we’ve been able to land so far,” Royer said recently to Business First. KRG partnered with developer Continental Development Ventures and Arcadia Development on the project and is involved with the leasing. UA Gateway is the result of a decades-long effort to bring a large, mixed-use building to a community that is 95 percent residential.
“Upper Arlington is landlocked and raw commercial development land is non-existent,” says Finance Authority President Patty Huddle. “Communities like UA usually deal with this challenge through annexation or higher density development.” The project was not new to Huddle; when she worked for the City of Upper Arlington in the early 2000s, she worked with the location’s property owners to annex it into the City of Upper Arlington. “The City knew how critical commercial property was needed for generating revenue for the primarily residential community,” adds Huddle. “Twenty-plus years later, I’m pleased to support the City’s much-needed commercial development from a different capacity.”
UA Gateway is one of several recent (and unusually large) developments in or around the suburb. The building is located on the corner of Lane Avenue and North Star Road. It includes approximately 134,000 sf class A office space, 26,000 sf of ground floor commercial/retail space, and 230 market-rate, multi-family housing units (branded as Lane Lofts). According to project architect MA Design, the project made the most of the tight, three-acre L-shaped location to achieve the developer’s goals of true live/work/play mixed use.
The project is part of the city’s efforts for economic development within its Lane Avenue Planned Mixed-Use District. Proximity to schools, neighborhoods, Route 315, and Ohio State’s emerging Innovation District makes it an attractive destination for residential and commercial tenants alike. The 12-story building includes five floors of apartments (which share the floors with 866 parking spaces) and office space on floors 8 through 12, many with striking views over Ohio State’s west campus and the downtown skyline.
Parking, as is often the case, is one part of the project supported by the Finance Authority. Several of its programs helped provide financing to the ambitious project:
Garage Ownership: The Finance Authority will own the structured parking, which is currently owned by the City of Upper Arlington and leased to Continental. The benefit of our ownership of the garage provides public parking to the area and, with incentives, lowered the overall cost of the project.
Capital Lease: The Finance Authority issued Capital Lease Revenue Bonds on private improvements.
Central Ohio Regional Bond Fund / Property Assessed Clean Energy (PACE): The Finance Authority financed eligible energy improvements including building envelope, HVAC, windows, lighting, roofing, boilers and insulation with PACE financing from our Central Ohio Regional Bond Fund.
The use of the Finance Authority’s investment-grade bond fund (S&P Global Ratings A-) enabled the developer to obtain attractive, long-term fixed rate financing. The project’s total investment was around $120 million.
“The Finance Authority is a crucial development partner in a rising-cost environment,” says David Royer, Senior VP of Finance and Development for Continental Development Ventures. “These projects would not have been possible at the time they were developed without the support from Patty Huddle, Rose Roman, and the entire team.”
Meeting a Need for Business Space
“The Gateway building has been an incredible success for the community,” says Upper Arlington City Manager Steve Schoeny. “The office space was almost fully leased before the building opened. Adding five stories of class A office, in the amenity-rich corridor of Lane Ave, lets us capitalize on the business demand to locate in Upper Arlington.”
The largest tenant is Northwestern Mutual, which takes the entire 12th floor and a portion of the 11th floor. AssuredPartners and First Merchants Bank also each occupy a full floor. Other tenants include Keller Williams Realty, GAD Insurance, Mix Talent, and DiPerna & Co., the Finance Authority’s financial advisory firm.
A number of factors influenced First Merchants’ decision to move its local headquarters into the Gateway’s 8th floor. Location was a big plus; just five miles from their previous location, the move offered little disruption for their employees. The developer/owner was a major influence as well. “We are big fans of the quality, management, leadership, and execution of the Continental team,” says Jennifer Griffith, Market President of the bank. “We knew the combination of the location and developer was a homerun. When we learned the space would be available to us, the rest fell into place quickly.”
Sixty-five First Merchants employees occupy the space currently, and there’s room for up to 110. The bank signed a 10-year lease, Griffith says, with the intent to grow into the full utility of the suite. “The space elevates our brand and experience for everyone that uses it,” she adds. “We are extremely proud to share our conference rooms with community partners and clients. The work experience for our staff is exceptional and everyone is proud to show it off. We love the space and we’re excited to keep filling it up.”
Gateway’s ground floor commercial spaces are expected to be occupied by retail and restaurants. A Half-Price Books, which partially occupied the site prior to the development, has returned to the building.
Other Partnership in UA
In addition to the Gateway project, the suburb has seen a transformation of the Kingsdale shopping center, with the construction of The Kingston (325 apartment units), a senior living center, and the city’s long-awaited Bob Crane Community Center.
A 550-space public parking facility was essential for serving guests to the Community Center as well as the nearby Market District grocery and other businesses. The Finance Authority owns the parking structure, which is a separate condominium parcel from the 300 market-rate apartments built above the parking facility. The public ownership provides the public access to the parking for the various amenities on the site.
“As we start to work on other projects, we expect that the Columbus-Franklin County Finance Authority will be a great partner at the table, as they have been in the Gateway Building and Kingsdale Center redevelopments,” says Schoeny. “The Finance Authority’s participation has closed gaps to move projects forward and maintained free public parking at these projects. We hope this project is catalytic and demonstrative of what Upper Arlington can accomplish, as we look for our next mixed-use, office project.”