We finally know what's been happening inside the former Terrace Plaza Hotel in downtown Cincinnati− and why plans to redevelop it have seemingly stalled.
It turns out that the one-time modernist marvel is a "rancid shell" and a "dystopian" nightmare inside, according to legal filings. The huge cost of repairs needed to remake the building has led to a court battle over how much the building is actually worth, slowing progress on efforts to redevelop a key part of downtown.
At issue: is Terrace Plaza building worth millions? Or basically nothing?
For over two years, crews have "painstakingly" removed asbestos and mold from the interior of the 78-year-old brick building, and the owner's attorney, Steven P. Goodin, says it will likely take another
year to finish.
During this period, Goodin and the owner, Carmel, Indiana-based Tony Birkla, have also been in a legal fight with Hamilton County and Cincinnati Public Schools over the market value of the International Style-structure at 15 W. Sixth St.
Why does this matter? The valuation dispute affects Birkla's current property tax bill, which is already the subject of a separate lawsuit over more than $550,000 in unpaid taxes. That case is on hold while the valuation dispute plays out.
More broadly, the fight could influence whether the long-vacant eyesore in the middle of Downtown finally gets redeveloped as 180 apartments, a $160 million project Birkla says is dependent on securing the right future incentives.
So how exactly did the Terrace Plaza end up in court, and what happens next? Here's what you need to know.
Three years total of asbestos removal
One of the lawsuits tied to the vacant structure stems from early 2023, when the Hamilton County Auditor's office valued the three parcels that make up the building at a combined $8.2 million. The county's Board of Revisions backed the decision in 2024.
In a later appeal, a magistrate in the county's Common Pleas Court recommended a value of $7.7 million, a number proposed by a Cincinnati Public Schools' hired-appraiser. (The school district heavily leans on property taxes for its operating revenue.)
Birkla has continued to challenge the valuation in court, arguing it should be substantially lower. Why? Because the Terrace Plaza is so deteriorated that it can't be compared in value with other Downtown buildings, per his attorneys.
"The only true 'comp' for this building could be found in a dystopian science fiction film from the 1980s, and a particularly frightening one, at that," Goodin wrote in a court brief.
When Birkla bought the Terrace Plaza for $9.5 million in late 2022, the roof was largely gone. The elevators didn't work. It was infested with rats and pigeons, and people were squatting in it, per legal records.
"Every section of plumbing was wrapped in asbestos," Goodin told The Enquirer.
To keep the building from falling apart even more, Birkla secured a $2.9 million loan via tax increment financing from the city of Cincinnati for a "make-safe" plan, an emergency effort to stabilize, waterproof and secure the structure so workers and firefighters could safely enter to begin remediation.
"It was way more work than we anticipated," Goodin said.
Birkla's external appraisal found asbestos remediation would cost between $10 million and $13 million alone. The project also qualified for state brownfield remediation funding, which is reimbursed to the developer at the end of a project, not the beginning.
Starting in 2024, Green City Demolition began asbestos removal floor by floor. That work is expected to wrap sometime next year.
Is an iconic Downtown building worth millions or $1?
The entire lawsuit revolves around a single question: How much is a dilapidated building worth, even if it has redevelopment potential?
In a filing with the Hamilton County Court of Common Pleas, Goodin argued that the building was effectively worth nothing prior to remediation. Years of neglect from a foreign owner led to a credit bid, a type of bankruptcy auction, which is how Birkla bought it.
Records show the county auditor originally assessed the Terrace Plaza Hotel's value by comparing it with similar buildings rather than using a "cost-to-cure" method, which subtracts how much money it would likely cost to fix up a distressed property from its market value.
It's not uncommon for property owners to appeal the auditor's initial valuation of a building, which is adjusted every three years, but this is what Goodin calls an "extraordinary" case.
Birkla's appraiser decided that the property's taxable value should be $1 based on the fact that remediation costs exceeded acquisition costs. But Goodin said the developer's broader argument wasn't about valuing it that low, just not at the original $8.2 million assessment.
"We expected the county to come back somewhere around $500,000 to $1 million," he said. "We could have worked with $2 million."
What the county, CPS say
Hamilton County and Cincinnati Public Schools fundamentally disagree that the building's poor condition rendered it worthless. Their attorneys argued that there is an active market for distressed Downtown buildings, as seen in over a decade's worth of completed conversion projects, with sophisticated investors buying properties knowing they can get incentives to rehab them.
County attorney Eric A. Munas also wrote that because Birkla bought it, the Terrace Plaza inherently has value: "It is a data point which unequivocally shows that a market participant would, in fact, purchase the property, despite its condition, for $9 million."
"The buyers aren't paying for a rancid shell to keep in a constant state of decay forever," CPS attorney Matthew DiMuzio added in one court brief. "They are purchasing an asset that will profit the owner greatly over a long period of time."
The school district's appraiser highlighted four Downtown projects as comparable sales, while the county's appraiser highlighted 18 nearby. They also claimed Birkla's appraiser didn't sufficiently prove the building's $1 taxable valuation to begin with.
A spokesperson for the county prosecutor's office declined to comment. DiMuzio also didn't respond to multiple requests for comment.
Could the tax fight stall the Terrace's redevelopment?
Goodin said the legal dispute could harm the project's financing, but Birkla hasn't abandoned his plans.
He's redeveloped two other buildings in downtown Cincinnati into housing, the 580 building and 830 Main St. Birkla has also publicly discussed his plan for The Terraces, an Enquirer 2023 top project to watch.
City leaders also want the building to be revived: "The City administration will continue to work with the property owner to ensure that the property is clean and safe while working with the owner on his redevelopment plans for this incredibly important site in the heart of the central business district," spokesperson Mollie Lair said in a statement.
Goodin said the county's recorded value of the building affects The Terraces project long-term because Birkla needs a lower valuation to attract the right incentives. Those include project-based tax increment financing.
Many Downtown towers have been redeveloped and converted into something new using project TIFs, the abbreviated name, which are managed by the city and use future property tax increases for property-related public infrastructure. In 2025, Victrix Investments received roughly a $33 million tax exemption to convert Carew Tower, a project of similar cost. The developer will still have to pay Cincinnati Public Schools annually.
As of Oct. 6, the First District Court of Appeals dismissed Birkla's latest appeal on a technicality, saying the prior trial court did not issue a proper final judgment. The case will likely return to the higher court once that issue is corrected.
This article originally appeared on Cincinnati Enquirer: The $160M plan for former Terrace Plaza Hotel crippled by court battle
