Saturday, December 15, 2007

The Gibbons Annex Story

One of the puzzling sidebars in this most recent installment of the Arcade story is the involvement of the Gibbons Annex

The building was built at the same time as the Arcade, by one of the partners in the Arcade part of the Arcade. The building did have a physical connection to one of the Arcade stalls via large fire doors. It was apparently not included in the 1970s-era Arcade redevelopment.

Gibbons Annex and Arcade Centre.

The building was involved in some way with the Arcade Centre urban renewal , as the city was acquiring properties on Third and Main streets as part of a deal to build two twin towers and a parking garage to support the arcade.

Dayton’s private sector partner was Dudley Webb of Lexington (developer of a successful twin-towers scheme in downtown Lexington) in partnership with Henne of Cincinnati.

Webb-Henne did eventually build one tower and a parking garage, including a walkway through the Gibbons Annex. The tower was called “Arcade Centre”. According to online property records (which start in 1996) “Webb Henne Arcade Centre” was also the owner/taxpayer for the Gibbons Annex parcel, so Webb-Henne apparently acquired the property some time between 1986 and 1996.


After the closure of the Arcade the Arcade Centre tower is renamed One Dayton Centre. The last street level tenant of Gibbons Annex, Wendels Bootery, leaves in 1992-1993. Property taxes go unpaid on the property starting in 1997.

The City & Gibbons Annex

The city acquires the parcel, per this August 2005 news story:


DAYTON — The city is taking possession of the Gibbons Annex, a building that is part of the downtown Arcade block, in hopes of getting the empty building redeveloped. Dayton Arcade Centre Partnership, which owns the five-story Gibbons Annex at 18-22 W. Third St., is giving the deed for the building to Dayton in lieu of foreclosure.

The transaction will erase $212,000 in property taxes owed on the property.
The annex fronts Third Street just east of the entrance into the Arcade, sitting between the Arcade buildings and One Dayton Center, the modern office tower on the southwest corner of Third and Main.

The city will work with the owners of One Dayton Center to redevelop the Gibbons building, according to City Manager Jim Dinneen. The building's primary function now is housing an enclosed walkway that allows people to walk from a parking garage at Third and Ludlow streets to One Dayton Center.

The City Commission unanimously approved the transaction Wednesday

..which is validated by these two screen shots from the the 2005 and 2006 tax year, though the transfer apparently occurred in 2006..



The promised attempt at redevelopment never occurs, and the building remains vacant to this day.

Then, this Dec 2007 there was this mention in the Dayton Daily News, as part of a story on negations on the Arcade:

…The current offer would have settled back property taxes and more than 20 years of back rent the city of Dayton claims the charity owes on the Gibbons Building, 20 W. Third Street.

The city took ownership of the Gibbons in July 2006 in lieu of foreclosure, according to court records. Then in the fall of 2006, Dayton sued Brownfield Charities and Arcade Square Limited for $267,000 in default rent payments for the building located on the outer ring of the complex.

Staub said the city failed to make the property suitable for lease and he has countersued. That trial is set for May 8 in Montgomery County Common Pleas Court.

Parsing the News:

The 2005 article:


DAYTON — The city is taking possession of the Gibbons Annex, a building that is part of the downtown Arcade block, in hopes of getting the empty building redeveloped. Dayton Arcade Centre Partnership, which owns the five-story Gibbons Annex at 18-22 W. Third St., is giving the deed for the building to Dayton in lieu of foreclosure.

Is this the same as Webb-Henne, who own One Dayton Center? Tax records shown above indicate that it is.


The transaction will erase $212,000 in property taxes owed on the property.
The annex fronts Third Street just east of the entrance into the Arcade, sitting between the Arcade buildings and One Dayton Center, the modern office tower on the southwest corner of Third and Main.

The reporter doesn’t make the connection between One Dayton Center and the Gibbons Annex ownerhsip...

The city will work with the owners of One Dayton Center to redevelop the Gibbons building, according to City Manager Jim Dinneen. The building's primary function now is housing an enclosed walkway that allows people to walk from a parking garage at Third and Ludlow streets to One Dayton Center.

..which permits Dinneen to pitch this as the city working with an adjacent (implied unrelated) property owner, who, as we see, is the same group who owned the Gibbons Annex.

The 2007 Article

The current offer would have settled back property taxes and more than 20 years of back rent the city of Dayton claims the charity owes on the Gibbons Building, 20 W. Third Street.

Why is the city claiming this as there is no indication that Staub or Brownfield Charities owns or owned the property?

Note the street addresss. This is the same property as in the 2005 article The addresses asccoiated with the Gibbons Annex are 18, 20, and 22 W Third.

The city took ownership of the Gibbons in July 2006 in lieu of foreclosure, according to court records. Then in the fall of 2006, Dayton sued Brownfield Charities and Arcade Square Limited for $267,000 in default rent payments for the building located on the outer ring of the complex.

Why is the city suing for 20 years in back-rent? Webb-Hennes involvement did start 20 years ago via their participation in the urban renewal project, but news reports and records indicate the city acquired deed to the property in 2005-2006.

Arcade Square Limited appears to be the old holding company for the Arcade complex, formed by Aetna Insurance, Gem Savings, and 3rd National in 1984 or 85 when the aquired the bankrupt Arcade redevelopmen.

This holding company (and its real estae) was sold to Danis in 1990, who then donated the property to Staub in 2003.

There is no evidence on the online records that this holding company owned the Gibbons Annex.

Staub said the city failed to make the property suitable for lease and he has countersued. That trial is set for May 8 in Montgomery County Common Pleas Court.

Staub’s remarks seem to imply he does have some interest in the building. What would that be? His statement about the city suggests his involvment came after the city aquired the property

@@@@

One also has to wonder what is going on with the city.

The city acquires the property in lieu of back taxes, promise to work with the former tax welchers to redevedelop the building, and then they sue entities apparently unrelated to the property for 20 years of back-rent.


Or so the DDN reports.

6 comments:

David Esrati said...

Jeffrey,
Great digging and fact finding. Something has stunk on the Arcade Tower project since day one. It was originally slated for completion before the "Citizen Federal Tower" (now the 5/3 rd tower) which was a Danis project. Then, Dayton's "Architectural Review Board" (of whom we've never heard from since) said the original design of the Arcade tower wasn't appropriate- throwing the tower's development back a year, and allowing the Danis project to get the plum tenants.
Later, Danis got The Arcade proper- for $36K, promptly shutting it down, and strangling the tower.
When the tower then went into foreclosure, Danis was too tied up with landfill issues to score the tower for pennies on the dollar, completing his domination of Class 1 office space downtown. As further proof that Danis was being assisted on all this by powers in City Hall- one must look at the 3.1 million the city paid to Danis for the Silver Wedge at the corner of Second and Jefferson (a building he had bought for $900k) as a way to offset his costs on tearing down the 2nd Street Historic district (of which the facades later ended up on the RTA hub at Third and Main).
This whole deal stinks from the ground up. Great reporting.

metromark said...

Jeff, great reporting. You really show up the media around this town, which are more interested in the arsons and shootings that they find out about from the police blotter. If the DDN was really smart (okay, I know that's a stretch), they'd be watching these blogs and devoting some investigative reporting on some of the leads that arise in blogs like yours. I wonder if Tony Staub's suit against City Hall in May could be the forum to air what's going on surrounding the Arcade.

Jeffrey said...

David, Mark, thank you for the compliments. I do wonder if anyone reads this stuff sometimes.

The only way I would have known to question this is due to my research into the history of the Arcade, which touches on peripheral properties.

I didn't do too much research on the Arcade Centre urban renewal scheme, but I can say it helped kill retail on that block. This is confirmed by the urban renewal documents, on file at the UD library.


News reports on Arcade Centre say that the Webbs didn't consider another tower opening downtown as competition when they ran their market numbers. Presumably if Webb knew about the CitFed tower he might not have entered into the urban renewal deal with the city.

So that begs the question as to what Danis was up to (and the city) with the CitFed tower, since it killed the city’s urban renewal project, intended to save the Arcade (and the Silver Wedge story is a fascinating aside to that. CitFed is probably a whole 'nother line of enquiry)

Arcade Centre was supposed to be fast track. One of the delays cane from someone called Gutman, who apparently had something to do with Elder-Beerman? He also objected to Webbs first proposal (part of the design objections noted by David), helping derail the fast track.

So another local player throwing up a roadblock.

I don't think the intention of the Danis Arcade takeover was to strangle the tower. CitFed coming on market first would to do that.

Danis probably acquired the Arcade as a bargaining chip to get the city to take Concourse 70/75 off his hands.

What remains unknown was Danis' relationship with Society Bank, AKA 3rd National Bank, and if there was a hidden agenda on the part of the bank.

@@@@

In any case this is all history now. The future is that lawsuit. Staub never mentioned any involvement in the Gibbons Annex during the FSA meetings, so I am really curious what's up with that lawsuit and countersuit.

David Esrati said...

Jeffrey, Cit Fed had killed off the tower. In fact, the tower shouldn't have been built, because they didn't have the 35% pre-lease that was the theoretical make or break number. Of course, Freund Freeze and Arnold, pledged to move in (they do a ton of City work, including the Ninja mask Federal case) so it could move forward (probably with a kickback or low rent deal). Max Guttman was running ElderBeerman at the time. Supposedly- Arthur Beerman demanded that there be no retail on the Sinclair campus, so as not to compete with his store (which is now owned by Citywide and leased to Reynolds and Reynolds). There have been more backroom deals involving these properties than we can shake a stick at. Come up with any other reasonable reason why Danis took the arcade? If he could have bought the arcade center for pennies- why not?

Anonymous said...

The piece you guys are missing is the walkway that runs between all four buildings. I bet there are leases or easements that connect them, which would explain the rent issue and the lawsuits.

Jeffrey said...

The question of the walkway might be tied in to who owns the parking garage at Third and Ludlow. I had thought that might have been a Webb-Henne property as it looks like it was built at the same time Arcade Centre was, in a similar style.

I can see some sort of rental arrangement for the right-of-way as it crossed through the Arcade and the Gibbons Annex from the office tower to te garage. In that case the owner or leasee would be the one possibly paying rent.

I don't see how this would be Staub, given his relatively late involvment with Arcade, unless the entire right-of-way was assigned to the Arcade complex. Even then, his liability would go back to 2003, not 20 years.

I would expect whoever leased an easement or right-of-way would be whoever owned the tower or garage.