Different variations of plans for remaking the former Voss Industries plant on West 25th Street in Ohio City’s Market District have been considered by developer MRN Ltd. But none have advanced to the point where financial assistance has been request from Cleveland City Council — until now (LoopNet). CLICK IMAGES TO ENLARGE THEM.
$62M+ project to create 125 jobs in Ohio City
Legislation was introduced this week by several Cleveland City Council members to help finance the conversion of the abandoned Voss Industries plant, 2168 W. 25th St., in Cleveland’s Ohio City neighborhood into a mixed-use complex. The projected price tag to carry out the redo is at least $62 million. While the property’s owner and developer MRN Ltd. has been kicking around various ideas for reusing the property for the last couple of years, none of those concepts have advanced as far as this stage of nailing down its financing for a specific program.
The proposed program for the 237,136-square-foot complex includes 92 apartments, 24,000 square feet of rentable commercial office and co-working space, 25,000 square feet of general retail and restaurant space, and 50,000 square feet of anchor food/beverage, pickleball and indoor mini-golf use, according to publicly available documents from the city. Previously, the project was titled the Carriage Works owing to the aerospace factory’s origins as the Rauch & Lang (R&L) Carriage Co. which produced horse-drawn wagons, carriages and specialty vehicles in the late 1800s. In between making carriages and airplane parts, the factory built electric cars in the early 1900s.
“Along with what is happening across the street at INTRO, these projects will help to completely transform the commercial stretch south of Lorain Avenue and tie the neighborhood together,” said Ohio City Inc. Executive Director Tom McNair in a recent NEOtrans interview.
Legislation pending before City Council now refers to this project as the Carriage Company although a final name isn’t yet known. There is a smaller redevelopment nearby in Tremont called the Scranton Avenue Carriage Works. MRN, which redeveloped East 4th Street downtown and the United Bank Building at West 25th and Lorain Avenue in Ohio City, bought the 4-acre Voss Industries property and its structures for $7.5 million in March 2021, county records show. MRN created an affiliate 2168 West 25th Street LLC to acquire the property. In 2020, Voss moved its nearly 300 employees to a newer plant in suburban Berea.
Site of the proposed redevelopment of the Voss plant, referred to on this document that was included in with the proposed tax-increment financing legislation as the Carriage Company project (City of Cleveland).
“In order to assist with the project financing, the developer has requested the city impose a 15-year, non-school TIF (tax increment financing agreement),” the pending legislation reads. “The TIF will support debt service related to the project. The project will create and/or cause to create approximately 125 new W-2 jobs at the project site with an approximate payroll of $3,750,000. The total project investment is expected to exceed $62 million.”
The debt-issuing institution or authority wasn’t identified, but that’s common in TIF agreements. Once a TIF is passed, the borrower can secure a bond, loan or other debt to pay the construction costs of the project. That includes not only revenues from tenants and customers but also redirecting taxes that would otherwise go to local governments including the city and county — but not the school district — to pay down the principal and interest on the debt.
MRN Ltd., a family-owned and operated business run by Ari Maron and doing business as AJAPPJR LLC, estimates that $93,750 in new annual city tax revenues will be generated from residents and new employees resulting from the redevelopment project, according to the legislation. Sponsoring the proposed ordinance are Councilmembers Kerry McCormack of Ward 13 (in whose ward the project is located), Anthony Hairston of Ward 10 who is chair of council’s Development, Planning & Sustainability Committee, plus Blaine Griffin of Ward 6 and Council President. The legislation was requested by Mayor Justin Bibb’s Economic Development Department.
Maron did not respond to an e-mail sent by NEOtrans seeking more information prior to publication of this article. However, this article will be updated if he responds in the coming days.
In the several variations for redeveloping the former Voss plant, conceptual renderings were drafted to show what the buildings could look like post-renovation. This was one of them, suggesting how attractive the currently blighted property could become following its renovation (CBRE).
If passed by council, the ordinance will authorize the director of economic development to enter into a 15-year non-school TIF agreement with 2168 West 25th Street LLC and/or its designee. By passing the legislation, the city will have declared certain improvements with respect to the project to be a public purpose and exempt 100 percent of the improvements from real property taxes. The public purpose, according to the proposed ordinance, is that the redevelopment would clean up and repurpose a blighted property.
“AJAPPJR LLC (dba MRN LTD) plans to maintain the architectural character and highlight the history of the R&L Building while revisualizing, redeveloping and rehabilitating the now vacant property,” the city’s legislation continues. “Through its subsidiary, 2168 West 25th Street LLC, AJAPPJR LLC will redevelop the property into a mixed use development.”
Furthermore, after MRN makes improvements to the property, it would make payments in lieu of taxes (called PILOTs) equal to the taxes that would have been paid for the parcel but for the TIF. A portion of the PILOTs will be paid to the Cleveland Metropolitan School District in the amount the district would have otherwise received but for the TIF by Cuyahoga County. The balance of the PILOTS will be utilized to fund eligible project costs and project debt. The developer will be responsible for any shortfall of PILOT payments for project costs.
The TIF will be immediately effective on the residential portion of the project after the expiration of a 15-year, 100 percent tax abatement due to be awarded by the city. The city’s tax abatement policy will change at the end of this year for the city’s hottest neighborhoods development-wise, decreasing from a 100-percent abatement on newly built or renovated structures to 70 percent. Ohio City is one of the neighborhoods where the percentage will decrease.