To succeed, Dayton Arcade must reach out into neighborhoods, officials say

The Dayton Arcade developer is now working on the Third Street side of the complex. JIM NOELKER/STAFF

Credit: JIM NOELKER

Credit: JIM NOELKER

The Dayton Arcade developer is now working on the Third Street side of the complex. JIM NOELKER/STAFF
Local News
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June 27, 2023
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The city of Dayton and the Dayton Arcade developer and partners say they are taking steps to fulfill a promise that the $134 million project will provide benefits far beyond the complex’s walls and into city neighborhoods.

“The arcade, as lovely as it is, at the end of the day it’s a pile of bricks and glass and metal — it isn’t the community, it doesn’t do anything other than give us a place to centralize the community,” said Scott Koorndyk, president of the Entrepreneurs’ Center, which is one of the arcade’s anchor tenants. “But if that’s all we do — centralizing the arcade — then we’ve failed: We have to reach out into the neighborhoods, we have to reach out into the other parts of Dayton.”

The second phase of the arcade project is underway, which will create a new retail hub and marketplace and a new hotel.

Est! Est!! Est!!!, an Italian restaurant, and Gather by Ghostlight, a new café, are expected to open next month, which will provide the public with more opportunities to visit and enjoy the arcade.

The Dayton Arcade developer is now working on the Third Street side of the Arcade. JIM NOELKER/STAFF

Credit: JIM NOELKER

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Credit: JIM NOELKER

Community benefits

Four years ago, the city of Dayton approved a community benefits agreement that spells out financial commitments that will be made by the city, the arcade development team and its partners.

The 15-year agreement says the partners will create an Arcade Neighborhood Opportunity Lab Network to ensure new economic opportunities provided at the arcade innovation hub will be accessible to everyone in the Dayton community.

The agreement says there are likely to be five physical hub sites in each section of the city, and the network lab sites will provide technology access, flexible workspaces, workforce programs and staff support.

Here’s a look at the completed third floor expansion of The Hub Powered by PNC Bank in the Dayton Arcade’s Rotunda Building in downtown Dayton. This expansion builds on The Hub’s current presence on all three floors of the Arcade’s McCrory Building and second floor of the Rotunda, Fourth St. and Ludlow Buildings. The Hub, a joint venture of the University of Dayton and The Entrepreneurs’ Center, houses the UD Crotty Center for Entrepreneurial Leadership, The Small Business Development Center from the Entrepreneurs’ Center, co-working and private office spaces, meeting rooms, conference areas, pop-up retail opportunities and learning labs and classrooms including UD studios for creatives. TOM GILLIAM / CONTRIBUTING PHOTOGRAPHER

Credit: Tom Gilliam

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Credit: Tom Gilliam

Earlier this month, the Dayton City Commission approved an intergovernmental funding agreement that will provide $35,000 in city funding every year for the next decade and a half to help pay for a new community benefits coordinator.

The city will provide half of the funding for the new position while the developer will pay the rest.

The coordinator will develop and oversee the Arcade Neighborhood Opportunity Lab Network and will work to link the arcade innovation hub’s small business and entrepreneurial resources to community partners, educational institutions, neighborhood-based organizations and other partners, says a city manager report.

The city of Dayton has provided the Dayton Arcade project with millions of dollars in funding through grants and loans, plus other incentives like tax abatements.

Community benefits agreement activities will be funded in large part by a $1.25-per-square-foot charge on commercial-use space in what is called a New Community Authority District and a retail charge of up to 5% on all gross receipts of businesses operating in the district, Koorndyk said.

Work is underway on the Third Street arcade building in the Dayton Arcade. The building is being turned into a retail hub and a new hotel. CORNELIUS FROLIK / STAFF

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Under the community benefits agreement, the developer agreed to award arcade innovation hub scholarships to people or groups who cannot afford leases in the space; sponsor events benefitting the Dayton Public Schools; and provide entrepreneurial and arts programming for Dayton youth.

The new coordinator will be expected to establish relationships with key partners, develop and implement programs, direct counseling and training and promote the arcade, Koorndyk said.

“I think this is a key step,” said Dayton City Commissioner Darryl Fairchild.

Dayton City Commissioner Chris Shaw said, “We never looked at the arcade as being just a standalone building. It’s going to have tentacles reaching out into the neighborhoods.”

The first phase of the arcade project cost about $94 million, while the second phase is expected to cost about $40 million.

Dave Williams, senior development director with Cross Street Partners, stands in the Third Street arcade building in the Dayton Arcade. The building is being turned into a retail hub and a new hotel. Cross Street is one of the main developers of the arcade complex. CORNELIUS FROLIK / STAFF

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The first phase created new apartments and offices, arts and event spaces and an innovation hub offering classrooms and collaborative and learning spaces.

More amenities to come include a kitchen incubator, restaurants, retail spaces and hotel product.

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