Ohio City buildings to be razed for Bridgeworks

Axiometric view of the proposed demolition plan for the Bridgeworks site, at the west end of the Detroit-Superior Bridge in Cleveland’s Ohio City neighborhood. But the pending demolition of buildings on the site doesn’t mean construction is about to begin. Instead, the demolition is sought because the developers could lose a state grant to aid in the demolition if they don’t use it soon (LDA/Mass). CLICK IMAGES TO ENLARGE THEM.

Bridgeworks’ project financing not complete

Two historic buildings are proposed to be torn down for a 16-story, mixed-use development in Cleveland’s Ohio City neighborhood, despite information that financing, including the use of air rights, for the high-rise is still being finalized. A demolition permit application was filed Aug. 4 by LDA Architects of Cleveland for Bridgeworks LLC with the city’s Building Department following recent approvals of the demolitions by the city’s Landmarks Commission and a design review committee. But the approvals by those two panels in the City Planning Commission were made with the presumption that the overall Bridgeworks development would be carried out.

The demolition is being sought as the clock ticks down on a state grant to Bridgeworks to cover most of the site’s clean-up costs. Bridgeworks is not merely the name of the planned $108-plus-million hotel-over-residential-over-retail development, it is also the identity of an incorporated partnership of M Panzica Development and Grammar Properties LLC, both of Cleveland. Most of the construction funding for the project was approved in the spring and the development’s partners said they hoped to start demolition and construction in June.

But two sources familiar with the project who spoke off the record say the development partnership is trying to close a “small funding gap” to start building on the site. Closure of that gap comes as a slowly developing credit crunch is hitting the finance markets and forcing lenders to tighten requirements for funding new projects, businesses and investments. The 2-acre site is the former Cuyahoga County Engineers’ laboratory and garage at 2429 Superior Viaduct.

City review boards in 2022 approved the developers’ razing those two structures, revising an earlier demolition plan that would have substantially retained a 1941-built, Art Deco-styled county garage. Instead, stonework and other decorative features from the demolished garage are to be stored and ultimately incorporated into the landscaping for the high-rise and to repair a mothballed, 1917-built subway station entrance/ticket booth on the site that will be preserved, according to the permit application submitted late last week.

Site plan for the planned demolition of buildings for the future construction of the Bridgeworks tower and neighboring parking garage. In addition to razing the vacated Cuyahoga County Engineer’s laboratory-office building and garage, the asphalt-paved parking areas on both sides of those structures will be removed, too. So will sidewalks, curbs and most trees. A public art display and a flagpole will be relocated. The former subway entrance/ticket ball and a half-dozen trees will remain (LDA/Mass).

The other structure to be demolished is a three-story laboratory-office building in good condition that is old enough and in a designated historic district that it would probably be eligible for historic tax credits, if desired. The development team says the lab-office building was constructed in the 1970s. But county property records show it was built in 1965. Either way, the developer had no intention of repurposing that structure in any variation of its plans. The Engineer’s properties were vacated by the county over a period of 10 years, ending in 2019 when the county put the property on the market.

Cost of demolishing, clearing and cleaning the property are estimated at $320,000, the permit application shows. Of that, $223,500 is due to be funded by an Ohio Brownfield Remediation Program grant from the Ohio Department of Development awarded to Bridgeworks in 2022 and which must be used in a timely manner or be returned. It is probable that the developer didn’t immediately sign an agreement with the state to receive the funding.

The reason why that is probable is because, under terms and conditions set by the Ohio Department of Development for the grants, “awarded projects should commence activities within six months of receiving a fully executed agreement. Funds may be reallocated for projects that cannot comply.” However, it is not known when or if the Bridgeworks partnership has signed an agreement to receive the funds.

Partnership principal Michael Panzica said he could not yet comment publicly about the project. He also declined to confirm information from the two sources who said construction is not imminent and that the demolition work was not an indication that construction was about to start. The development partnership is on the hook for nearly $100,000 of its own money in demolition and clean-up costs, not including permitting fees.

Aerial rendering of the proposed Bridgeworks mixed-use development at the northeast corner of West 25th Street and the Detroit-Superior Bridge in Ohio City’s Hingetown section (LDA/Mass).

That’s a lot of money to spend without any way to recover it from revenue-generating activities like a new development. So the developers and their investors would obviously like to start construction as soon as possible. Community officials said they support the demolition even though the last thing they want to see is an existing parking lot on that site get bigger, especially in such a high-profile location. It is at the intersection of West 25th Street and Detroit Avenue, across Detroit from the future Irishtown Bend Park.

“I’m really excited to see this corner transform from a surface parking lot to a vibrant and active use, especially on one of Cleveland’s most transit- and multimodal-connected corners,” Ward 3 Councilman Kerry McCormack added.

“It’s critical that site gets redeveloped to rebuild the street wall and activate the future Irishtown Bend Park,” said Tom McNair, executive director of Ohio City Inc., a community development corporation. “We’re not interested in preserving surface parking and low-density buildings on one of the best street corners in the city.”

In April, the Cleveland-Cuyahoga County Port Authority Board of Trustees authorized the issuance and sale of $80 million in taxable Lease Revenue Bonds plus $4.13 million of taxable Bond Fund Tax Increment Financing Bonds for Bridgeworks. Also in April, Cuyahoga County Council awarded Bridgeworks a $2 million Place-Based/Mixed-Use Economic Development Loan. The project includes 140 apartments, half of which will be priced as more affordable “workforce” units, plus a 132-room hotel provided by a new-to-Cleveland Motto By Hilton brand, a 120-seat restaurant and bar on the 11th floor, 12,000 square feet of office space, and the addition of a 210-space parking garage immediately east of the tower.

One way to increase revenue and financing capacity is create above-ground real estate — an air-rights space for sale or lease at the top of a proposed tower. In this case, a Motto By Hilton hotel would pay to occupy a new parcel use the top 68-feet of the 16-story Bridgeworks tower (McSteen).

The delay in wrapping up financing is likely due to the developers seeking to fill a financing gap in a unique way. The partnership filed documents with the county on June 29 to replat the site with air rights — a property interest in the “space” above the earth’s surface. In this case, that air rights space starts on and includes the 12th floor, at an elevation that’s 774 feet above sea level and extending 68 feet up to 842 feet above sea level, the plat filing shows.

The ground level at this location is at an elevation of about 660 feet, according to GoogleEarth, noting Bridgeworks’ final height would be about 182 feet. The cube-like air rights space, representing five floors, will be leased or sold to the hotel. Measuring 0.39 acres on the 12th floor, a floorplate of about 17,000 square feet, the air rights space became a new parcel on the county’s property map in July and will be owned, at least initially, by Bridgeworks LLC, according to county records.

The 12th floor of the air rights space includes a 2,644-square-foot “exception area for a residential section” — likely for an easement so the residents of Bridgeworks can share the hotel’s fitness center, hallway, elevator lobby and associated facilities. Additionally, the replat filed in June created a separate 0.53-acre parcel for Bridgeworks’ proposed multi-level parking garage which also offers leasing and other revenue opportunities from the hotel and existing property users nearby.

Bridgeworks had twice requested additional financing help from the state in the form of Transformational Mixed Use Development (TMUD) tax credits but was passed over each time. It is not known if it will seek TMUD credits a third time. The deadline for requesting up to $40 million from the next round of $100 million in TMUD credits is Sept. 8. Bridgeworks sought $9,299,608.90 from the TMUD program last year and $7,944,817.92 TMUD the year before.


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