Avondale churches also benefited from loans

• Four churches in Avondale received %241.65 million to renovate Avondale Town Center in 1997.
• Pastors wanted to redevelop blighted center%2C bring in grocery store%2C reduce crime.
• Parties of loan call deal a success even though %241.45 million yet to be paid back.

The city of Cincinnati also gave generous real estate loans to a group of unlikely borrowers: Four neighborhood churches that wanted to redevelop Avondale Town Center.

Two loans worth a combined $1.65 million were issued in 1997 for 21 and 26 years. Seventeen years later, $1.45 million remains outstanding. The shopping center, meanwhile, is nearly fully occupied with several businesses and retail shops, having hosted a grocery store for 10 years until 2008.

"There would have been no way four churches could have pulled this off using just private banks," said Rev. KZ Smith, pastor at Corinthian Avondale Baptist Church. His church is one of four members of the Avondale Coalition of Churches, a nonprofit that now oversees management of the building.

Those involved say the goals were never about making money. Instead, the churches were looking for a grocery store to help the community. They also wanted to improve the building, which had become blighted and overrun with crime in the 1980s and early 1990s.

So the newly created coalition crafted a deal in 1997 for a $1.3 million loan that's backed by federal funds at 4.1 percent interest and expires in 2023. Another federally backed loan was issued for $350,000 at 3 percent interest and due in 2018.

"I've been in this business a long time, and I can say this is one of the most fabulous success stories involving a public-private partnership that you will ever see," said John Rickert, a real estate manager who helped craft the deal for the churches. He's now executive managing director for Sperry Van Ness/RICORE Investment Management Inc., which manages the shopping center for the coalition.

"Yes, this was done more for social reasons than for financial ones. But it worked, and there would have been no way it would have happened without the city's participation."

Aldi's grocery occupied space at the town center for 10 years until its lease expired in 2008. Now, leaders in the community of 12,000 are planning an expansion in hopes of attracting another grocery. A new store is part of the city's master plan as revealed by Mayor John Cranley in his state of the city speech earlier this year.

Meanwhile, crime is down in the area, and a Burger King has replaced the notorious Wendy's that had burned down and was a notorious drug hangout. More importantly, the property is now worth at least $1.8 million, according to Rickert and Cincinnati officials. Because the property is worth more than what's owed, the city would be in line to receive any profits from a sale, in accordance with the loan terms.

Coalition members, including Smith, say they have not yet decided how to pay back the loans when they come due/ Options include selling the center or refinancing through a private bank and paying off the city.

"A key in a lot of these deals is finding the right organization to carry out what we're trying to accomplish, which in this case was changing that area," said Eric Denson, who manages the city's loan program for the department of trade and development.

"In this instance, we found a great organization. They took the steps to get the place fixed up, and it is in much better shape than it was before, and the community is better for it."■