Trouble brewing at Market Square: Confidence wanes as partners bail

Keywords Sports Business
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Deciding who will build and pay for a new sports stadium and expanded convention center has drawn plenty of scrutiny in recent months, diverting attention from the redevelopment struggle in our midst: the so-far illfated attempt to erect housing and retail space at the former Market Square Arena site.

Though the stadium drama is yet to play out on the west side of downtown, it’s time for some answers regarding this high-stakes east-side project.

The project team picked
by the city in February 2004 to develop the one-block site that straddles East Market Street has unraveled in the 16 months since. This after a ubiquitous marketing campaign and an announcement that demand for the project was hot enough to warrant expanding the pro
ject’s two residential towers from 23 to 29 floors.

The Market Square Partners pitch seemed too good to be true from the start. With more than 400 condominiums, 75,000 square feet of retail space and a $140 million price tag, the project was the most ambitious of the six proposed. Adding to the allure was the development team members’ insistence that they’d need virtually no public participation.

Not long after the group was chosen, it broadened the potential scope of the project by purchasing an adjacent garage and operations center from Bank One Corp. A sales center opened in a building adjacent to the site and project representatives made public appearances touting the condos.

But cracks started to appear long before the developer and the city acknowledged the December 2004 ground breaking wasn’t going to happen on schedule. Brookline, Mass.-based Diamond & Co., which had been touted as the experience and money behind the project, quietly ended its involvement. And the 41 condos sold fell far short of the 113-unit threshold required to begin construction.

In January, Market Square Partners acknowledged the layout and pricing of units wasn’t right and said it had hired Chicago-based Mesa Development LLC to revamp the plan to invigorate sales. This spring, former project participant Consoer Townsend Envirodyne Engineering Inc., based in Chicago, filed a $3.2 million lien against the project to collect money it said it’s owed for service rendered. CTE wasn’t an equity partner in the project but had served as its public face during the bid and project-agreement phases.

What’s left of the group is its two original equity partners: Columbus, Ohio-based Smoot Construction Co. and Crossroads Development, a local firm headed by former deputy mayor William Shrewsberry. Representatives of the team promise new condo designs and a fresh marketing plan will be released shortly.

We hope the project succeeds. As envisioned, it could bridge the gap between downtown proper and historic neighborhoods to the north and east, and could house the resident-oriented retailers downtown lacks.

Unfortunately, evidence is gathering that the project really was too good to be true. It’s hard to understand how the project team could lose its major players so quickly and how the product mix could have been so far off the mark.

Until those questions are answered or a new developer arrives, it will take more than another slick marketing campaign to make this important redevelopment project happen.

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