Eight historic buildings on Cleveland’s Flats East Bank could be redeveloped if the developer, the George Group, receives an Ohio Transformational Mixed Use Development tax credit by fall. It is one of 36 applications announced today for the $100 million megaprojects incentives program (LDA). CLICK IMAGES TO ENLARGE THEM
No new-construction applicants in downtown Cleveland
When real estate developer Bob Stark thought up the Ohio Transformational Mixed Use Development (TMUD) tax credit several years ago, he envisioned it as a means to transition from tapping historic tax credits for renovating old buildings in downtown Cleveland to affording the construction of new ones. His rationale was that, with the supply of obsolete commercial buildings dwindling to provide new residential inventory, a new financial incentive would be needed to overcome Cleveland’s high construction costs and low rents to satisfy downtown housing demand.
But after two years of the four-year TMUD program, no new-construction applications have yet been sought for properties in downtown Cleveland. Stark’s own company, Stark Enterprises, didn’t submit an application last year for its high-rise nuCLEus project just north of the Gateway sports/entertainment complex after a major pledged tenant could no longer wait and walked away. Unfortunately, no one else has filled that void this year either. That is not to say that there aren’t large new-construction projects happening downtown; there are — Sherwin-Williams new 616-foot-tall headquarters and the new 23-story City Club Cleveland Apartments.
Today, the Ohio Department of Development released its round-two, fiscal year 2023 list of TMUD applicants. The state’s fiscal year starts July 1. There were 36 applicants statewide requesting $318 million in TMUD credits with $93.6 million worth of requests coming from Northeast Ohio including Cleveland’s suburbs, plus Canton and Youngstown. Applicants had until July 8 to submit their projects to compete for roughly $100 million in credits — up to $80 million for major city projects (within 10 miles of cities having a population of 100,000 or more) and $20 million or more for general projects for the rest of the state.
In the first round there were 42 TMUD applicants statewide and 13 won credits. Only one received a partial award, meaning most applicants either won everything they wanted or entirely missed out. To be eligible for a major-city TMUD credit, a project must be valued at $50 million or more. It must also rise 15 stories or taller or measure 350,000 square or more among all buildings in connected parcels whose construction or renovation has not yet been completed. In the second round, some of the repeat applicants are seeking more financial help to overcome the rising costs of construction and materials.
Erieview Tower is downtown Cleveland’s fourth-tallest building right now, but will soon by eclipsed by the new Sherwin-Williams headquarters. Even so, the building offers great views of downtown and Lake Erie be they for office tenants now or possibly office workers, residents and hotel guests in the future (KJP)
There are two downtown Cleveland TMUD applicants in this second round plus two new-construction applicants nearby that are also on the list. In fact, the list isn’t substantially different than what NEOtrans reported on the application deadline July 8. The two downtown Cleveland applicants are:
Erieview Tower — Erieview Tower, LLC, an affiliate of the Kassouf Co., is seeking $13,089,149.90 to help offset more than $100 million in costs to renovate and partially convert the 40-story Erieview Tower, 1301 E. 9th St., from offices to 220 apartments and a W Hotel. The 1964-built tower has been losing office tenants to newer buildings with greater amenities. Last year Kassouf sought but did not win $9,339,623 in TMUD credits for the same project.
Historic Flats East Bank — 1285 Old River Road LLC, an affiliate of the George Group and GBX Group, has requested $2,935,000 to renovate and repurpose eight historic properties on both sides of Old River Road on the Flats East Bank. The first phase is a $41 million redevelopment of the five-story Samsel Supply Co. and adjacent Samsel structures into apartments and ground-floor retail. Properties included in this application are 1198, 1204, 1220, 1235, 1285, 1294-1310, 1316 and 1322 Old River Rd. This is George’s first attempt at a TMUD credit.
Two other applicants from the city proper are desirous of of TMUD credits. And both are seeking the tax credits to support their new-construction projects for the second round after being passed over last time. They are:
Bridgeworks — Bridgeworks LLC comprised of M Panzica Development and Grammar Properties is seeking $9,299,608.90 in the second round of the TMUD program for a 15-story mixed-use project with 140 apartments, 130 hotel rooms, mid-tower restaurant and ground-floor retail at the northeast corner of West 25th Street and the Detroit-Superior Bridge. The addresses for the $60+ million development are 2429 W. Superior Ave. and 1379 W. 25th in Ohio City’s Hingetown section. Last year, the project requested $7,944,817.92.
The $60-plus million Bridgeworks high-rise at the west end of the Detroit-Superior Bridge from downtown Cleveland is making its second attempt at winning a TMUD tax credit. The project’s developers undertook some cost-cutting measures in the project’s design in response to inflation but are still seeking a larger tax credit than before (Mass/LDA).
Circle Square — UC City Center, LLC led by Midwest Development Partners is requesting $8 million in TMUD credits for Phase 1 of its multi-structure development of apartments, parking garages, public spaces, hotels, offices, ground-floor retail and institution use. The University Circle development is already rising along Stokes Boulevard between Chester Avenue to the north and Euclid Avenue to the south. In the first round, the developer asked for $19 million in credits.
In the suburbs, four projects within 10 miles of Cleveland are seeking Major City TMUD credits. All involve new construction. The applicants are:
Brecksville/Valor Acres — VA LAND LLC led by DiGeronimo Companies has requested $16,249,000 in TMUD credits for its mixed-use Valor Acres development on the former site of the Veterans Administration Hospital at Brecksville and Miller roads. The anchor for this 100-acre project is Sherwin-Williams’ new research and development facility but there will also 200 living units, an upscale 120-room hotel and 150,000 square feet of retail & entertainment. This is its first TMUD request.
Lakewood/Studio West 117 — West 117 Development Fieldhouse, LLC, a consortium of Gaslamp Capital and Your CFO Resource, wants $6,229,062.07 in credits to continue its LGBTQ+ friendly Studio West 117 development at the border of Lakewood and Cleveland. Although the application lists a project address of 1384 Hird Ave., multiple existing and proposed buildings are included in the plan heralded by the Phantasy Theater, originally the Homestead Theater. Physically, its biggest component is a proposed seven-story, 212-unit apartment building over a parking garage at Detroit and Coutant avenues. Last time, the developer sought $8,687,615.20 from the TMUD program.
Shaker Heights/The Van Aken District — Applicant Van Aken Shopping Center, Ltd., an affiliate of RMS Investment Group, is requesting $7 million from the TMUD program to help it build out later phases of its mixed-use Van Aken District. The developer recently said city incentives may allow it to move forward on two high-rise apartment buildings and possibly an office building. But additional phases to redevelop the former Shaker Plaza retail strip on the south side of the Blue Line rail station aren’t funded. The project had previously sought $11 million in TMUD credits.
Brecksville’s Valor Acres is under construction, starting with Sherwin-Williams’ new research and development center. It will also add residential, retail, hotel, greenspace and large surface parking lots (DiGeronimo).
Solon/Downtown Solon — JJJ Real Estate LLC is asking for $2 million from the TMUD program to help it build its Downtown Solon development at the former Liberty Ford site, 32811 Aurora Rd. The development team includes RHM Real Estate Group, Pride One Construction, The Krueger Group and The Passov Group. Much of the 8.9-acre site was rezoned by voters in 2019 to support mixed-use development. Downtown Solon is a proposed gathering place for the residents of Solon and surrounding suburbs that will include apartments above retail and restaurants, a food hall, a hotel and a public plaza for hosting community events. The total investment is estimated to exceed $90 million. It’s this project’s first try at a TMUD credit.
Three Northeast Ohio applicant projects are seeking TMUD incentives but are more than 10 miles from a major city. Thus they are requesting tax credits from the “General” category. Those projects are:
Canton/Hall of Fame Village — HOF Village NEWCO, LLC, an affiliate of the Hall of Fame Resort & Entertainment Co., plans to build at 2014 Blake Ave. an indoor waterpark, The Eleven-a Hilton Tapestry Hotel, 100,000-square-foot Center for Performance exhibition hall and athletic performance space, a retail promenade and Play-Action Plaza. It will join the Pro Football Hall of Fame, Tom Benson Hall of Fame Stadium, National Youth Football & Sports Complex and 75,000-square-foot Constellation Center for Excellence office building. In its first-ever TMUD submission, the applicant is seeking $15,886,612.
Painesville/Downtown Painesville to Grand River Corridor — Vic Place LLC, an affiliate of Renew Partners, seeking to redevelop four structures in Victoria Place in downtown Painesville. The former shopping center turned office complex will be developed into commercial and retail spaces along with apartments for $25 million. The targeted addresses in this $5,449,076.30 TMUD application are 100 South Park Place plus 113, 177 and 257 Main St.
Youngstown/20 Federal Place — Owner 20 Federal Place LLC, a partnership led by Pittsburgh firm Desmone Architects, seeks to redevelop the former Strouss department store at 20 W. Federal St., now an eight-story office and retail building, into apartments, an innovation space for businesses and a rooftop restaurant for about $60 million. The developer is seeking $7,471,528 in TMUD tax credits.
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