Newport Pavilion nears capacity



When the homes in Newport's Cote Brilliante were demolished nine years ago to make way for the Newport Pavilion shopping center, the project might have seemed like a huge gamble.

But now, many expect Newport Pavilion will be completed this year and generating almost as much tax revenue as Newport on the Levee.

"The city took a gamble for the betterment of the entire city," said Newport City Manager Tom Fromme. "So far, it's paying off."

Many weren't so sure about the project at the beginning.

Large hills and 90 properties needed to be bought and leveled. Discontent over the plans to bring Wal-Mart and Sam's Club to the center led at least in part to then-City Manager Phil Ciafardini's resignation in 2005.

The fears didn't subside after the first store, Kroger Marketplace, opened in 2009. The economy sputtered, few stores opened for the first few years and the ownership of the 56-acre property changed hands.

A lot has changed since then. Wal-Mart never opened in Newport Pavilion but pretty much everything else has.

The shopping center will likely be 100 percent full by the end of the year, the Oak Brook, Illiniois-based owner Inland Real Estate Corporation expects. Inland partnered with a Dutch pension fund adviser to buy both phase I and phase II of the shopping center in 2014 for a total of $66 million.

"We wish there was enough land for a phase III," said Scott Carr, executive vice president and chief investment officer for Inland.

Five more stores on the way

There isn't enough land for more buildings. The development will be almost at capacity when five more stores open up this year, Carr said.

That will leave open just one 3,300-square-foot space by T.J. Maxx. Carr doesn't anticipate it will stay vacant for long. Other than Flipdaddy's burger restaurant opening this spring, Carr wouldn't name the other tenants that will open, saying he's leaving it to the individual stores to make their announcements.

"With the highway location like it has, there's a tremendous amount of customer traffic from Cincinnati and Kentucky," Carr said. "It's a regional draw. It draws more than just the weekly grocery crowd."

Look out Newport on the Levee

Newport Pavilion currently generates the second most tax revenue for the city of Newport among developments, just behind Newport on the Levee. It could overtake the Levee during it's first full year being fully operational, Fromme said. In 2014, Newport Pavilion brought in $532,000 in tax revenue for the city, compared with $693,000 for Newport on the Levee.

That means the city is netting more than $200,000 after the $300,000 in annual bond payments to pay for the public infrastructure the city put on the site. The city will pay that debt off in 20 years, Fromme said. By the time there's a full year of operation with all the tenants, the Newport Pavilion will be netting well over $300,000 for the city each year.

Becoming a melting pot of the Tri-state

"The cost of doing business – insurance, road repairs – those costs don't go down," Fromme said. "They keep going up. Having an additional $300,000 in revenue, it's put into our general fund, whatever the need may be at the time."

Since it opened in 2009, the Newport Pavilion shopping center has become a melting pot of people from Mount Adams, Walnut Hills, downtown Cincinnati and Northern Kentucky. In 2012-2013, an average of 7,000-12,000 cars each day clogged the Pavilion Parkway that runs through the shopping center, according to the last traffic counts from the state. Almost certainly that number has increased with the addition of more restaurants and shops.

The amount of customers from Ohio has doubled for Monmouth Jewelers since the 100-year-old business moved into the plaza four years ago, said Scott Levinson, manager of the store.

"We've seen a huge increase in our Cincinnati traffic because people that live Downtown, in Walnut Hills and Mount Adams go to this Kroger," Levinson said. "I definitely say it's an overall success. It's raised the level of businesses because it's nicer stores coming to the area."

Residents don't mind the traffic

Residents in the area also seem pleased with the shopping center.

Hurshell Vires doesn't mind the swarm of cars from all over the Tri-state that pass by his house each day. As he stood out on the stoop of his ranch house on a hillside in view of Target and Kroger Marketplace, Vires mused on how much the neighborhood has changed since he moved there 42 years ago.

Then, before I-471 was built, the Cote Brilliante neighborhood was a bunch of old homes nestled in woods.

But the homes in the neighborhood started falling apart.

Vires thinks it's changed for the better.

"It was better than what they had down there," Vires said. "The property they had down there wasn't going for much us. Most of it was rental property and property ran down. I think it's helped the community a lot."

He thinks it's also raised the value of his home, which he bought for $11,000 in 1973.

"I'd say it's worth $13,000 now, wouldn't you?" he said with a laugh.

What is Newport Pavilion?

Location: Off I-471 between the Memorial Parkway exit and Grand Avenue exit in south Newport.

Size: More than 300,000 square feet of retail space on 56 acres.

Who: Dozens of tenants include anchors Target and Kroger as well as Dick's Sporting Goods, T.J. Maxx, Chipotle, Buffalo Wild Wings, PetSmart, Michaels, Monmouth Jewelers, Panera and Chik-Fil-A