Sep. 9—Beavercreek and Fairborn are no longer the sole local hot spots for defense and government services contractors.

In three years, downtown Dayton has proven to be an increasingly strong magnet for such companies, especially companies led by younger people.

The pull is particularly strong in downtown's "Innovation District" near and around Day Air Ballpark. But it goes to the core downtown area, as well.

Advocates say downtown offers a blend of location, walkability and proximity to like-minded entrepreneurs and clients.

"There's such a strong sense of community down here that we didn't experience in Beavercreek necessarily," said Carly Cox, president of JJR Solutions, whose company moved to the Avant-Garde building off East Third Street from Beavercreek in the spring of 2019.

And the community creates opportunities, company officials said.

"It is good to be downtown, because we have so many other companies our size — a little bit larger, a little bit smaller," said Mike Engle, executive vice president of Barbaricum, a company found in The Manhattan building next to the Avant Garde.

"It really creates a lot of opportunities for us as smaller businesses to find where we can complement one another, where we can support one another and where we can better compete for business together."

Stratacache Tower (the former Kettering Tower) signed cybersecurity firm Tenant3 late last year. The business took the tower's entire 23rd floor.

"The center of that creative class is downtown," said Chris Riegel, owner of downtown's Stratacache Tower and chief executive of Stratacache digital signage company. "The younger people seek to move away from the boring concrete campuses into the more urban vibrant spaces."

Riegel believes future lease announcements may confirm the trend toward downtown.

"There's a different vibe downtown," he said.

'Somebody's got to do it'

Setting up shop in Beavercreek might have been the "path of least resistance," said Jeff Graley, founder of software developer and Dayton defense contractor Mile Two.

"I lived in Beavercreek," Graley said. "You're exceptionally close to your peers, your frenemies, your colleagues and collaborators — potentially your clients as well."

But fundamentally, downtown Dayton was and is a good choice for Mile Two, he said.

Mile Two's decision to anchor The Manhattan, a 55,000-square-foot building at 601 E. Third St., in September 2019 was a step forward for the Innovation District.

"The density downtown, where you can just walk to coffee, to lunch, to walk and talk was important to us — and it remains important to us," Graley said. "We just walked over to lunch with our new neighbors from Henny Penny."

In June, Preble County food service equipment manufacturer Henny Penny told the Dayton Daily News it is leasing and preparing an office in The Manhattan. Henny Penny remains committed to its historic location in Eaton, but work on the new downtown office is ongoing, it said.

Graley said colleagues at Wright-Patterson Air Force Base or Air Force Research Laboratory don't express misgivings about the company's place downtown.

You can find the same parking and traffic issues downtown as any other urban center, Riegel said. But he and others say those issues are far less prominent in Dayton.

"You're not dealing with long commutes, you're not dealing with huge traffic problems," Riegel said. "It's a lifestyle choice."

It's also a resources choice. While companies are returning workers from full remote status, they don't need as much space, Riegel said.

"They might say, 'I don't need 200,000 (square feet), I want 50,000 (square feet),'" he said. "They want smaller but better. I want a more creative, employee-centric environment downtown."

Graley acknowledged that parking sometimes can be a challenge. But if employees are willing to walk short distances the issue is hardly felt. And he agreed that compared to larger cities, Dayton's parking situation is easy.

"I can't tell if it's a Midwestern thing or what, but there's a lot of parking down here," he said. "And you don't have to walk terribly far to get anywhere."

Mile Two was an anchor tenant twice. The business created a working space in the the 444 building, a block north along Sears Street from The Manhattan.

"Somebody's got to do it," Graley said. "The first one is always the hardest."

But Graley is quick to credit JJR Solutions, next door in the Avant-Garde, with being first in establishing an expansive, distinctive suite of offices downtown.

'It's about being a part of the larger community'

Dave Judson, JJR founder and chief executive, remembered the moment well.

The company had been operating in Beavercreek for years when Cox and Dan Marion, chief marketing officer at JJR, approached him and said, "We need to be downtown."

By November 2018, the news was out, thanks in part to the company's Montgomery County development grant application. JJR intended to occupy nearly 14,000 square feet and two floors at the Avant-Garde in a move the company said at the time would create about 100 jobs with an average salary of $90,000 in coming years.

JJR was one of the first to take a chance with downtown Dayton developer Jason Woodard on his quest to bring businesses in defense and IT to this part of the community, Cox said.

"It was pretty cool in terms of what was happening with the building," Judson said. "The walkability, things like that. It was the right time for us to do that."

"We were rethinking our culture," Marion said. "We wanted to be part of a new vibe, right?"

Instead of sitting in cubicles, JJR employees would move pieces on a giant chess board. JJR's space features original wood floors, exposed brick walls, strings of hanging lights and an industrial metal slide to quickly move people downstairs.

The office has a gym, a shower and a break room with an outdoor-like vibe, featuring tables, chairs, yard games, hanging swings and Adirondack seating.

More importantly, JJR — a VA-verified, service-disabled, veteran-owned small business — is close to the downtown non-profit entities the company supports, Cox said. Ten percent of JJR's gross operating margin goes toward non-profits serving minorities and at-risk groups.

Being close to those organizations was important.

"It's about being a part of the larger community, the larger picture," Cox said.

"It's not just in the work we do, but it's in how we support the other local non-profits who are doing that kind of work."

'An immediate attraction'

Mike Engle is executive vice president of Barbaricum, a defense and government services company. The company chose The Manhattan building for 80 jobs and more than $7.2 million in annual payroll.

For a defense-oriented company, the location was perfect, Engle said.

"Essentially, you don't get a lot more Dayton defense than either Wright-Patterson, the old NCR with its code-breaking activities or obviously, supporting the Manhattan project the building was named for," he said.

The Manhattan was built in 1912 as the J.K. McIntire Building, but Woodard's rebranding of the building pays homage to its 1940s work as one of several Dayton-area locations dedicated to the development of the nation's nuclear arsenal.

"It was an immediate attraction," Engle said of the building's little-known history.

In both Washington, D.C. and its office near Tampa, Barbaricum has chosen historic areas to locate offices.

"We redevelop it so the inside is modern but the outside still maintains and respects the local history,' said Alicia Davidson, a Barbaricum executive who has been with the company for 10 years.

"I think the company really is very wedded to the downtown vibe," Engle said.

Engle had a 35 year-civilian career at Wright-Patterson, at the Foreign Technology Division, the organization that became the National Air and Space Intelligence Center, better known as NASIC.

"It is good to be downtown, because we have so many other companies our size — a little bit larger, a little bit smaller," Engle said. "It really creates a lot of opportunities for us as smaller businesses to find where we can complement one another, where we can support one another and where we can better compete for business together."

John Owen is program manager for Parallax Advanced Research in The Hub in the redeveloped downtown Dayton Arcade.

"I think it comes back to the density of the start-up community," Owen said.

Density, or being able to figuratively rub elbows with like-minded entrepreneurs and similarly situated start-ups, matters to younger businesspeople, he said.

Before the creation of The Hub, Parallax would often schedule special pop-up and networking events to bring people together.

"Now that we're in the Hub, we have that density in one location," Owen said.

JJR's Cox recalled that as a young girl she used to dream of working in a big city like Chicago. That's where professional dreams came true — or so she thought.

Now, she believes the example of JJR and companies like it demonstrate to young people today that businesses can thrive in smaller and medium-sized cities like Dayton.

"They can dream big and do it here in Dayton," Cox said.