Columbus Monthly / May 2011 / Upper Arlington: Business

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Upper Arlington: Business

Fresh Look

 

It’s got to be the crepe cafe that’s packing the aisles with hungry customers. Or maybe it’s the Asian street-food station. Or the rosti bar, featuring the national dish of Switzerland, fried potato pancakes topped with all sorts of delicacies.

Then again, it could be the cheese, 400 varieties, including Manchego, a sheep’s milk variety from the La Mancha region of Spain.

Want some wine with that queso? No problem. There are 2,500 wines at the new Giant Eagle Market District—along with more than 600 different beers.

This foodie paradise has quickly become a destination and touched off a revival of the entire Kingsdale Shopping Center, which in turn has become a symbol of development in Upper Arlington. It’s one result of the master plan carved out 10 years ago by city officials that is finally—despite the recession—falling into place.

Kingsdale is relevant again; Lane Avenue, the city’s gateway boulevard to and from Ohio State and Columbus, is in the midst of a makeover; several small, upscale office buildings and complexes have been built in recent years, and new restaurants seem to be popping up everywhere you look in Upper Arlington, adding to the culinary climate created by the new Giant Eagle.

“The effect of the Market District has been amazing, and it has completely transformed and rejuvenated a shopping center that had faded into obscurity,” says Tim Rollins, CEO of City Brands, which opened Las Margaritas restaurant in Kingsdale. He’s also CEO of Metropolitan Partners, a developer that recently completed the Arlington Commons project, a block-long development on Lane Avenue that includes a JoS. A. Bank clothing store and the Wine Bistro restaurant, also owned by City Brands.

“It’s bringing so many customers to the shopping center and is one of the big reasons our lunches and dinners at that location are among the best of all our restaurant locations,” Rollins says of the Market District’s effect on Las Margaritas.

The Market District is a welcome addition to Upper Arlington, which was always a nice place to live, but no longer much of a shopping or dining destination. The city needed a dash of pizazz. And some rosti.

 

Build up, instead of out

“There is no question we are completely built out,” says Matt Shad, Upper Arlington’s economic development director. In other words, there are no huge, vacant lots in the city awaiting development, as there are in nearby Columbus.

Making things tougher for the city, revenue-wise, is the fact that Upper Arlington was built as a bedroom community for Columbus, Shad continues. While filled with beautiful and historic homes that have held their value relatively well during the economic downturn, Upper Arlington has no industry at all and a limited amount of commercial properties. “Only 5 percent of our community is not residential,” Shad says. “And probably 20 to 40 percent is more typical in the suburban environment.” As a result, “we have to maximize the areas that are already commercial,” he says.

The way to achieve this, he adds, is to redevelop existing commercial sites more densely and fill them with offices that offer higher-paying jobs. “We want better payrolls, and that means professional and medical offices,” Shad says. “A retail store with a manager and three clerks doesn’t have the same impact as an office suite with more employees making more money.”

One pathway toward this goal is to build up, and construct buildings that extend closer to the street—putting parking lots in the back creates a more downtown, pedestrian-friendly feel. A perfect example of this type of development is the three-story office complex at 1480 W. Lane Ave., home to Ohio State’s Office of University Development and its 100 or so employees. It was built with the help of a $450,000 forgivable loan from Upper Arlington, Shad says.

“This met our design principles—a multi-story building close to the street that brought in reasonably high-paying jobs,” he says. “The builder promised to pay back the loan in 10 years through new income taxes, and they’ve done it in four years.” This development model, including tax incentives that eventually pay dividends, is guiding Upper Arlington as it moves forward.

Another goal, Shad says, is to increase the number of dining options in Upper Arlington by helping potential restaurateurs secure liquor licenses through the state’s Economic Development Transfer program. This, too, seems to be working. All the renovations and new builds have helped keep Upper Arlington’s revenue stable during a time when many other municipalities have seen sharp declines.

“Everything we do is carefully planned out, and I think that’s what’s important for longevity and sustainability,” says Becky Hajost, president of the Upper Arlington Area Chamber of Commerce. “I think we’re a great fit for TechColumbus [a nonprofit whose goal is to promote and develop technology companies in Central Ohio] and the medical side and Ohio State, and are a natural fit for those types of employees who like to live close to where they work.”

The Chamber, which has about 500 members, is pitching in by promoting Upper Arlington businesses through a Community Market Place event and several new promotions on its website, including a holiday 100 Best Gift Ideas featuring local stores.

 

A historic mall awakens

Developer Frank Kass, president of Continental Real Estate Companies, has long had his eye on the Kingsdale Shopping Center. He knew its location made it a valuable piece of property, despite years of neglect and a dwindling number of tenants and customers.

“It’s an iconic center in Central Ohio, the home of The Limited’s first store,” he says, referring to Les Wexner’s global retailing empire, which got its start with a shop at Kingsdale in 1963.

Kass and his company, working with local developer Mark Catalano, purchased the center for approximately $20 million in 2009 and began a complete makeover and renovation that is in its final stages. The key was the Giant Eagle Market District, made possible by Continental’s long working relationship with the supermarket chain.

“We sat down with the city and the Giant Eagle folks and worked out a plan,” Kass says. “The city’s planning staff and zoning people and city council were sensational.” Giant Eagle has about 250 full-time and 600 part-time employees, city officials say.  

The entire mall seems to have been reenergized, and includes several new dining options. Without the Giant Eagle Market District, Rollins says, there would have been no Las Margaritas in Kingsdale.

“It was a transformational kickoff to what has become a compelling redevelopment,” he says, adding he sees Kingsdale as the new town square or city center. “It has retail and restaurants as well as outdoor public space, green areas. The magic of the equation is you have a lot of people coming for a lot of reasons, and that makes for a good commercial cluster.”

The cluster will increase in size with the expected addition of an Urban Active health club and one or two office buildings along Zollinger Road, Kass says. The office complex is something Shad and other Upper Arlington officials have pushed hard for, and they have offered Continental a $3.75 million inducement to build office buildings rather than add more retail space.

“Over 20 years it will easily pay back the subsidy,” Shad says. The office project could bring an additional $400,000 a year in property taxes and $400,000 a year in income taxes for Upper Arlington, he says.

Kass envisions a three- or four-story building that is about 60,000 square feet. “We have to get it two-thirds leased before we can start construction,” Kass says. “We’re plugging away at it, and right now it looks like it will be heavy with medical and doctors’ offices.”

 

Gateway to Upper Arlington

There are two components to the makeover of Lane Avenue: the renovation of the Shops on Lane Avenue on the south side of the street—including the expansion of Whole Foods, another foodie paradise—and the continued revitalization along the north side. The north-side upgrade includes the slow but inexorable purchase and demolition of existing houses and the building of two- and three-story commercial spaces in their place.

Projects on the north side include Arlington Commons and the Ohio State development office, as well as the new   roll: bicycle shop on the first floor of a two-story building that also includes Keller Williams Realty. Just to the east is a Trek Bicycle Store, which makes Upper Arlington both a foodie and bike-friendly city.

“We liked the overall look and feel of the building and the fact that it was right on the street, with parking behind that made it more pedestrian friendly than yards of parking right on the street,” says Stuart Hunter, owner of roll:. “It’s a really vibrant street—and once you get off Lane Avenue, there are plenty of quiet residential streets for safe test rides.”

This close proximity to street after street of upscale homes makes Lane Avenue and Kingsdale attractive to developers. “It’s an exciting area,” Hajost says. “It’s the natural entry and exit point and has that connection to OSU and Columbus. And there is some land to do some things with—and some developers creating some interesting mixed-use projects.”              

 

Don't forget The Mallway

Often overlooked—and hard to find—is The Mallway, located on Arlington Avenue between Guilford and Waltham roads, next to Jones Middle School and the fire station. Once the city center of Upper Arlington, this strip mall is a specific destination for consumers in the know, but not a place many outsiders happen upon by chance.

“A lot of people don’t realize we’re here, and we’re working hard to change that and really promote the Mallway,” says Stephanie Berland. She owns Stephanie’s Salon and is the unofficial leader of the Mallway Merchant’s Association, which includes 25 members.

The Park Creek Kitchen restaurant and Whit’s Frozen Custard have opened up shop in the Mallway in the past two years, adding a dining element to the upscale boutiques and shops housed in the beautiful brick buildings. The city has begun a construction project to redo the streets and sidewalks surrounding the Mallway. The upgrade, which will feature curb cutouts and paver bricks, is being done in phases, and there will be access to all the stores during construction.

“It was built in the 1930s and is an important part of the history of Upper Arlington,” Berland says of the Mallway. “It’s a treasure, and if people have never been here or haven’t been here in a long time, they should come and check it out.”

 

Arlington Falls

While the redevelopment of existing commercial and retail properties is important, new builds are golden—but few and far between in Upper Arlington.

The biggest new build in years is Arlington Falls, which began about 10 years ago when Don Lee purchased the old DeSantis mansion at the intersection of Riverside Drive and West Henderson Road. Lee owns Horizons, a successful film and video company, and housed his business in the mansion and outlying barn.

“I needed space and lived in Upper Arlington and literally drove by and called the number on the For Sale sign,” says Lee, who has since sold off chunks of the land, which have been developed as an office campus by Arlington Falls LLC and Bedrock Group.

Five office buildings totaling 82,000 square feet have been built, and the occupancy rate is 85 percent, says Julie Stein, marketing director for PSB Realty Advisors, the leasing agent for the property.

“The location is the key,” Stein says. “It overlooks the Scioto River and is close to Dublin and Hilliard and Columbus, and not far from the airport.” This, by the way, is true of all of Upper Arlington.

Arlington Falls, which opened in 2007, is an office condominium project. Current owners include UBS Financial Services, Raymond James Financial, PSB Realty Advisors and World of Travel.

          

The loss of the anchor

Despite all the gains in Upper Arlington, the loss of the city’s largest office complex and potential revenue source is an ongoing problem, and one that includes a lawsuit.

In November 2009, Tree of Life Christian Schools announced it intended to purchase the old CompuServe and AOL/Time Warner office complex at 5000 Arlington Centre Blvd. to consolidate its current operations. At that time, according to city officials, the city advised Tree of Life that the wrong application had been filed and it should file a rezoning application in order to operate a school on the site. Tree of Life appealed the decision and countered that the site would be used primarily as a church. In the midst of an ongoing appeals process, Tree of Life purchased the property in August 2010 for $6.5 million.

The city’s position, spelled out in a recent fact sheet, is that the existing zoning prohibits a school and that Tree of Life never submitted an appropriate application for review by the city. If the ministry elects to submit a rezoning application, the fact sheet says, “the city would be in a position to give this issue full consideration pursuant to its development review and approval process.”

The building—which once housed as many as 1,000 employees—has been vacant since June 2009. The area is zoned as an office research district, Shad says, and this designation does not permit a school. The city, he adds, is not opposed to churches and schools, but believes                 it is important to best utilize the area’s largest commercial building for a denser commercial usage that generates higher income taxes to support the community’s quality of life.

The Tree of Life project, if it goes through, would no longer generate property taxes, as schools—and churches—are exempt. Property taxes for the site were $636,000 in 2009 and “the shortfall would have to be made up by all other existing commercial properties in the community,” Upper Arlington city manager Virginia Barney, who is retiring at the end of the year, has stated. “Additionally, conservative estimates indicate that if used to its potential, the office building could generate in the range of $550,000 per year in income tax revenues. If repurposed as a school by Tree of Life, income tax revenues would be significantly less, at approximately $50,000 per year.”

In January, the Alliance Defense Fund filed a federal lawsuit against the City of Upper Arlington on behalf of Tree of Life Christian Schools. “No city should use its zoning code to keep a Christian school’s students in inferior and overcrowded facilities,” says ADF attorney Erik Stanley in a statement. “A city’s zoning code cannot give preferential treatment to non-religious institutions that function similarly to a Christian school.”

The eventual outcome and development of the site will play a big role in determining Upper Arlington’s development and financial future—and there’s no telling how long the lawsuit could take to be settled or decided in court.

“Every town needs an anchor, and it’s no secret that we’ve needed one ever since CompuServe [and AOL/Time Warner] left,” Lee says, adding he envisions the site as the home to a high-tech campus.

“The people who live in this area are well educated and all have at least one college degree, if not two; household income is high, and our location [in relation] to downtown and OSU is unchallenged,” he says. “I think we could be a think tank, the education capital of the state.” 

 

Steve Wartenberg is a freelance writer.