City Club Apartments breaks ground for its first Cleveland project

Dignitaries break ground Dec. 10, 2021 for the new City Club Apartments high rise in downtown Cleveland.

Dignitaries broke ground today for the new 23-story City Club Apartments, 776 Euclid Ave. in downtown Cleveland. But City Club Apartments Chairman and CEO Jonathan Holtzman said it won’t be the Michigan-based company’s last project in Cleveland. Tossing dirt with golden shovels were, from left, lead project architect and Vocon Partners LLC Principal Denver Brooker, City Club’s Holtzman, Ward 3 Councilman Kerry McCormack, City Council President-Elect Blaine Griffin and Downtown Cleveland Alliance President & CEO Michael Deemer (KJP). CLICK IMAGES TO ENLARGE THEM

Downtown tower’s construction to start next week

It wasn’t just the sound shovels hitting the dirt at the City Club Apartments’ groundbreaking ceremony today in downtown Cleveland that was heard. It was also the news that the Farmington Hills, MI developer and owner of multi-family and mixed-use properties was just getting started in establishing a presence in Cleveland. But no one overlooked the importance of the latest residential high-rise being added to Cleveland’s main street, least of all the man most responsible for it.

“It’s your fault we are here, Cleveland; we love everything about this outstanding city,” said Jonathan Holtzman, Chairman and CEO of City Club Apartments. “We’re very, very excited to be here in Cleveland. There’s a second project in the city that we’re also looking at but we won’t get too ahead of ourselves.”

Two sources familiar with City Club Apartments’ next project in Cleveland cautioned that it’s still early on. But they noted that its second project won’t be downtown. Instead, the next is likely to be in University Circle after considering other locations that were limited to the city of Cleveland. It is not considering suburban locations, they said.

The sources also pointed out that City Club Apartments typically has more than one property in each city in which they establish a presence. It has 12 properties in Greater Detroit-Ann Abor, four in Chicago, two in Cincinnati, Minneapolis and Pittsburgh, plus one each in Kansas City and Louisville. City Club Apartments is doing business in Cleveland as CCA CBD Cleveland LLC, with CBD referring to central business district. The name underscored the unique identity and location of the first property.

Rendering of the new City Club Apartments building on Euclid Avenue.

An updated rendering of the 23-story City Club Apartment building, 776 Euclid Ave., shows greater resolution that brings out its mix of purple of white hues. This view looks generally south on East 9th Street. From the left, the buildings are the Schofield Building (apartments and Kimpton Hotel), the City Club Building (mostly offices and is no relation to the project that broke ground today), the City Club Apartments, and the Residences at 668 (Vocon).

At last report, site preparation and construction of the City Club Apartment’s concrete slab foundation is due to start Dec. 15, said Cleveland Construction Inc. Marketing Director Shawn Zbasnik. But he said that could change. If it does, this article will be updated early next week to reflect the change. Pre-leasing is scheduled to begin in the Fall of 2022 and apartments are expected to welcome their first residents in the spring of 2023, according to City Club Apartments spokesman Mark Winter.

The 304-unit, nearly 250-foot-tall apartment building that’s about to rise at 776 Euclid Ave. will have ground-floor retail spaces along the sidewalk including a doggy daycare, coffee shop and a two-story restaurant with speakeasy that Holtzman described its design as “spectacular.” He called the property an apartment hotel community where people can stay for a day or a lifetime. It will feature indoor and outdoor theaters and an entertainment Sky Club with a gourmet kitchen.

“The heated rooftop pool and hot tub will be wrapped with sun loungers and cabanas,” Winter said in a written statement. “A Sky Park will include fire pits, grilling stations, game areas, lounge seating, and a Bark Park and Zen Garden. A 24/7 whole body fitness center, multi-function yoga room, sauna and wellness room will also be integrated into the community.”

However, construction permits for the tower’s structure have yet to be approved by the city. Instead, Cleveland’s Chief Building Official Thomas Vanover sent an adjudication order to the building’s architects at Vocon Partners, LLC, denying those permits until 14 design issues or omissions in the plans are addressed or appealed. The denial will be appealed at an upcoming hearing of the city’s Board of Building Standards and Appeals, according to an entry on the building department’s Web portal. Vanover said adjudication orders are common for projects large and small.

City Club Apartments Chairman and CEO Jonathan Holtzman.

Jonathan Holtzman, chairman and CEO of City Club Apartments, addressed a group of about 50 business and government officials plus a small contingent of media at today’s groundbreaking ceremony. The event was held in a parking garage next to the Euclid Avenue surface parking lot that will be ripped up next week for the new high-rise (KJP).

“Downtown Cleveland is a thriving community,” said Ward 3 Councilman Kerry McCormack. “The project that you see here is killing a downtown parking lot. We left holes in the middle of our downtown neighborhood and that’s taken away some vibrancy. So we’re excited to add another vibrant community to our downtown neighborhood (with City Club Apartments). Just a few blocks down on the street, we’re killing huge surface parking lots for the future home of Sherwin Williams which will double down on their investment in the city of Cleveland and keep thousands of employees in our downtown neighborhood. The future is bright in the city of Cleveland.”

Financing for the City Club Apartments project closed three weeks ago. Holtzman said it has been difficult to get financing for major development projects in Cleveland and other Midwest cities outside of Chicago. Demand for urban housing among young professionals has been strong in places like Cleveland, Detroit, Pittsburgh and Cincinnati. But lenders are hyper-focused only on job growth in metropolitan areas — especially in Atlanta, Dallas and other hot markets, Holtzman said.

“The pension funds and the life insurance companies (that invest in real estate) look at these Midwest cities with not a lot of excitement,” he said. “You look at it from the standpoint of the people who want to live here and are they important? Absolutely, yes. They (investors) are just obsessed with Texas and Florida, the East Coast and the West Coast and yet they’re starting to realize that they’re wrong.”

One factor that may be changing that is Ohio’s creation this year of the Transformational Mixed Use Development (TMUD) program to primarily promote major development projects in or within 10 miles of cities having more than 100,000 people. For the highest-scoring projects valued at at least $50 million and measuring either 350,000 square feet or 15 stories or more, TMUD awards a credit against an entity’s Ohio insurance premium taxes, so it would ultimately be claimed by insurance companies.

A parking lot on Euclid Avenue in downtown Cleveland that's about to die.

Looking out from the parking garage at the parking lot on Euclid Avenue where construction is about to begin for the new City Club Apartments high-rise. The City Club Building, at right, has no affiliation to the apartment developer and operator. The parking lot and garage are on the site where the Hippodrome Building and Theater stood from 1907-1981 (KJP).

The City Club Apartments project in downtown Cleveland hasn’t submitted a TMUD application as the project is benefitting from using an existing parking garage owned by the Goldberg family. That’s similar to the 28-story Beacon Apartments built in 2019 just down the street at 515 Euclid Ave. that’s using an existing garage. City Club Apartments’ use of the adjacent garage will reportedly save the project at least $10 million in construction costs. A TMUD credit may be sought for City Club Apartments’ next Cleveland project.

Speakers at today’s event noted other amenities that will be offered by the new building, including the latest and fastest connectivity technologies. Overlooking the lobby will be a mezzanine business center, conference room and the indoor theatre. Activated with weekly social programming resident events, the building will provide personalized hospitality and 24/7 time saving concierge services.

“We have opened three communities during the pandemic,” said Holtzman. “When asked how we have adapted, I tell them that we have always had abundant outdoor dining, thoughtful workspaces in every unit, 24/7 business centers and comfortable and flexible City Club Co-working areas designed to accommodate residents that work from home. Construction has certainly been more complicated, but the uniqueness of what we are building has remained unchanged.”

Ranging in size from studios to penthouses, the units will have 22 unique floor plans and four distinct finish packages including work-from-home spaces, granite countertops, movable islands, custom closets, exclusively designed CCA kitchens, furniture and fixtures, plank flooring plus what Holtzman calls “sexy bathrooms” including oversized bathtubs, bay windows, balconies and French balconies.

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