Dayton Arcade: Legal fight with neighbor has caused costly construction delays
Cornelius Frolik, Dayton Daily News, Ohio
5 min read
Mar. 29—One of the developers of the Dayton Arcade says that construction on the north part of the complex has experienced delays and could face further setbacks because of a legal fight with the owner of an adjacent office building and parking garage.
RLR Investments LLC claims the redevelopment of the Arcade led to the improper closure and elimination of a walkway connecting an office building the company owns to its parking garage.
The company has asked the courts for relief, claiming its easement rights, plus rights to have the matter handled in court were violated by the removal of the hallway.
Representatives of Cross Street Partners, one of the Arcade developers, say they followed the rules of an easement agreement and did nothing wrong. They say the walkway is only closed temporarily and will be far nicer when it reopens.
Dave Williams, vice president of development with Cross Street Partners, expressed frustration that RLR took legal action rather than working with the Arcade's ownership and development team to try to address its concerns. He said construction delays could put tax credits and other funding for the Arcade redevelopment at risk.
"It's already cost us six months plus," Williams said. "It's a lot of money ... I can tell you it's definitely in the seven-digits."
The dispute
RLR Investments LLC owns the Fifth Third Center building at 1 S. Main St. and the Fifth Third Center Parking Garage, which sit on the same block as the Arcade property in downtown Dayton.
Fifth Third Center is about 20 stories tall, while the parking garage has seven floors. Fifth Third Center has about 11 tenants, including Fifth Third Bank and Wright-Patt Credit Union.
RLR says that Cross Street Partners blocked and later "destroyed" pedestrian access to a walkway that connects the parking garage and office tower, which runs through the second floor of the Gibbons Annex building, at the north end of the Arcade complex.
The Arcade consists of nine interconnected buildings, and construction ramped up on the northern section of the complex last year. This part of the Arcade is being turned into a new hotel and a retail marketplace.
The pedestrian pathway had to be closed temporarily to allow for construction, Williams said. He said when construction is complete, it will reopen in improved form.
In court filings, RLR claims Cross Street Partners violated the terms of its easement agreement by restricting and inhibiting use of the pedestrian walkway.
RLR said the Arcade developer did not take steps to minimize interference with pedestrian traffic, did not provide an acceptable alternative walkway and did not provide proper notice of alterations to the easement.
RLR said its tenants now have to walk outside on the street through a construction zone to get from the parking garage to the office tower, which means they are exposed to traffic, the weather and a "high-crime area,", according to its legal filings.
A couple of tenants of Fifth Third Center were not happy about the closure of the walkway and raised concerns about the safety of their staff and visitors, according to their testimony. RLR says the alternative walkway is "treacherous" and jeopardizes its business relationships.
Last fall, RLR was granted a temporary injunction that said the Arcade developers could not close or restrict access to the easement area until Jan. 6. But work resumed on the new hotel project after the injunction expired, and the enclosed hallway was demolished.
The court fight is ongoing, and an appellate court last month issued a decision saying it could not reasonably order the Arcade developers to reconstruct the previous walkway after it was eliminated.
RLR has asked the Ohio Supreme Court to hear its appeal, arguing that the Arcade developers destroyed the walkway and the company's property rights deliberately to try to make its appeal moot.
RLR claims the developer's actions violated its constitutional rights to court access and to having its grievance decided by the courts.
Williams said construction activities typically result in the temporary closure of areas inside and around construction zones.
The easement ensures there will always be a pedestrian passageway that goes from the parking garage to the office tower — it does not have to be an enclosed hallway, said Toby Henderson, an attorney with Sebaly Shillito + Dyer, which represents Arcade ownership and the development team.
"We complied with the law whenever the court said we had to stop our construction, and then as soon as the court said we could start our construction, we complied," Henderson said.
RLR's litigation has delayed construction on the project, which Henderson said ends up hurting RLR's tenants because that means that the work is taking longer than it should.
"Construction of this magnitude is inherently inconvenient to people — there's no question about it," he said. "We recognize that and we're doing all we can to reduce, minimize and eliminate the inconvenience not just for RLR's tenants, but everyone in that area."
Henderson said the redevelopment of the Arcade will benefit Fifth Third Center and the parking garage. Supporters of the Arcade project say the property's transformation will help revitalize nearby properties in that part of downtown, including underutilized office towers.
Dayton City Manager Shelley Dickstein said the current Arcade phase that is being delayed is "critically important" to the viability of the entire project, which includes low-income housing and the HUB entrepreneurial ecosystem.
Attorneys for RLR Investments did not return requests for comment this week. Requests for comment directly from RLR and the general manager of Fifth Third Center were not immediately returned on Friday.
