The buildings will be turned into a 94-room Hilton Garden Inn hotel and a collection of first-floor retail spaces.
“By adding hotel rooms to the Arcade complex, we hope to invite locals and tourists to experience the strong food and entertainment scene that continues to grow here,” said Danny Nagar of Century Hotel Group, the hotel operator. “This felt like a great opportunity to preserve and revitalize an iconic area and remove some of the roadblocks that have previously reduced travel to downtown Dayton.”
The retail marketplace will offer 7,500 square feet of space for small businesses.
Roughly 15 small retailers could occupy those spaces, which are under an eye-catching skylight.
The second floor of the Third Street Arcade building is expected to house a hotel restaurant and bar.
Construction on the north Arcade should get underway immediately, now that the financial closing wrapped up this week, and work on the hotel is expected to last through the middle of 2024. Demolition activities are already in progress.
When the second phase of the rehab project is finished, a pedestrian connector will be restored that will allow visitors to walk through the complex, from the north end at West Third Street to the south end on West Fourth Street.
“It will be that concourse that was originally designed in the Arcade in 1902 (that was) completely altered in 1980, when they actually shifted it to the center of the rotunda,” said Dave Williams, vice president of Development for Cross Street Partners, the main Arcade developer. “We’ve brought it back to where it does become that major marketplace, that entertainment place.”
Like the rotunda, another one of the Arcade’s recognizable features is the building façade on the north end of the complex on Third Street. Developers say it was designed by Frank Mills Andrews in the Flemish guildhall style.
Williams said the second phase of the Arcade project, like the first, had a very complicated capital stack.
“It is a great finish to an amazing project and will be catalytic for the Main Street corridor, as well as providing much needed support for the convention center,” Williams said.
Williams said the north Arcade will be an asset that helps the nearby office towers, many of which have substantial vacancies and emptied out during the COVID pandemic. He said the Arcade project also will support efforts to remake Courthouse Square, just north of the property.
Many people have called the Dayton Arcade rehab the most complicated project in the city’s history, because of the many funding sources that were needed to revive the complex, which had been closed for more than three decades.
“Bringing the Dayton Arcade back to life has been a monumental task that’s required numerous partners and components,” said Dayton Mayor Jeffrey Mims Jr. “I’m thrilled that phase 2 of this project will receive the necessary financing to move forward. The Arcade is truly a one-of-its-kind innovation center that will drive future investment downtown.”
Funding for the north Arcade project includes senior debt, state and federal historic tax credits, New Market Tax Credits, Property Assessed Clean Energy program financing, special bonds, contributions from the city of Dayton and Montgomery County and money from other sources.
Seven of the Arcade’s nine buildings have been restored and remade into a variety of new uses, including apartments, offices, classrooms, co-working spaces, a theater and other parts of an “innovation” hub.
The Arcade welcomes about 500 college students each day, when the University of Dayton and Sinclair Community College are in session.
The Arcade has more than 535 business members and more than 130 companies have a presence at the property, Williams said.
The first phase of the Arcade project, which cost more than $90 million, also is creating a food incubator and restaurant and hospitality spaces.
Gather by Ghostlight café and Est! Est!! Est!!! Italian restaurant are expected to open in the Arcade in the second quarter of this year.
Table 33 restaurant and 6888 Kitchen (the kitchen incubator) are expected to open in the complex in the fourth quarter.
A new speakeasy and steak house are expected to open in the first quarter of 2024.
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