NE Ohio wins two transformational tax credits

Playhouse Square Foundation was Cleveland’s only applicant for a Transformational Mixed Use Development tax credit. It won nearly $2 million to pay for recent and ongoing redevelopment projects in the theater district (Google). CLICK IMAGES TO ENLARGE THEM.

State awards $12 million total to NE Ohio

Out of eight Northeast Ohio development projects that applied for Transformational Mixed Use Development (TMUD) tax credits from the state, only two of them received the awards, the Ohio Department of Development announced today. This was the third year of the four-year TMUD program with $100 million available in TMUD tax credits each year.

The TMUD winners were the Playhouse Square Foundation which received a $1.95 million award for redeveloping Downtown Cleveland’s theater district while DiGeronimo Companies got a $10 million tax credit for developing Valor Acres in suburban Brecksville. Unfortunately, the announcement from the state is vague as to what exactly the TMUD awards will pay for. A complete, statewide list of TMUD award winners is available here.

For big-city applicants, the TMUD program funds new construction or renovation “megaprojects” valued at $50 million or more and includes buildings that measure at least 350,000 square feet in connected parcels or has at least one building that’s at least 15 stories or taller. It also allows applicants to include buildings that are already under construction or renovation.

According to the state, Playhouse Square’s application counts buildings constructed or renovated that have a total development cost $185.9 million. From past information, it appears that the Playhouse Square Foundation plans to use the TMUD to renovate three downtown Cleveland buildings that, while not contiguous, are all part of a continuous row of buildings it owns along the north side of Euclid Avenue.

The smallest of those buildings is the two-story, 30,000-square-foot 1317 Euclid which will have all-new base building infrastructure to potentially support a vertical addition of up to eight new stories. The other buildings included in the application are the 243,035-square-foot Idea Center and the 172,362-square-foot Bulkley Building which is being renovated with apartments and modernized offices.

Nearly a year ago, Playhouse Square Foundation announced projects it is undertaking in two buildings it owns. The first was the renovation and partial conversion of the Bulkley Building into apartments. The Bulkley, immediately left of the chandelier, will also gain a new office tenant, Dix & Eaton. Across Euclid Avenue is the Hanna Building which had its fourth floor converted to co-working spaces called Backstage at PSQ (Google)

But Playhouse Square Foundation identified in the TMUD documentation approximately 463,000 square feet of residential units, 353,750 square feet of office space, 18,800 square feet of restaurant space, and parking facilities. Not identified is where these would be built or if they include buildings already under renovation versus new construction. Not identified is if the proposed Greyhound redevelopment is counted in this or other as-yet unknown structures.

Interestingly, today’s announcement from the state refers to past Playhouse Square projects like the 34-story, 600,000-square-foot, 318-unit Lumen apartment tower that was completed in 2020 but doesn’t include its square footage. The state says the TMUD-supported project is expected to result in approximately 699 construction jobs and 525 permanent jobs directly at the project site.

“The project, which is considered ‘worldʼs largest theater restoration project,’ includes the construction of the Lumen, and renovations of the Bulkley Building, Idea Center, and 1317 Euclid Avenue buildings in the Playhouse Square Campus, is key to preserving and enhancing one of the strongest regional tourism assets in Ohio,” the announcement reads.

The other TMUD winner in Northeast Ohio, the Valor Acres development, clearer information in its application. The overall, new-construction development has a total estimated cost of $678,723,702. The first phase will develop a portion of the former Veterans Administration Hospital site with a mixed-use complex featuring the headquarters of the DiGeronimo Companies, to be relocated from Independence.

Valor Acres also includes the new Sherwin-Williams research center. The rest of the development will have a hotel, four mixed-use buildings totaling 368 residential units, 8,000 square feet of co-working space and structured parking with 9,300-square-feet of ground-floor retail. One 106,000-square-foot mixed-use building will have office, retail and parking.

This aerial view of Valor Acres, looking northward from Miller Road between Interstate 77 at left and Brecksville Road at right, emphasizes the mixed-use portion — residential and retail — of the proposed development as well as the portions that are under construction (CBRE).

Another mixed-use building at Valor Acres will offer 45,360 square feet of office and 11,340 square feet of retail space. The project is expected to result in approximately 677 construction jobs and the creation of approximately 784 permanent jobs at the project site, today’s announcement from the Ohio Department of Development says.

There were scant few Northeast Ohio applicants. Other major-city project applicants located within 10 miles of the city of Cleveland missed out on requested TMUD awards totaling $18.1 million. They include the Cain Park Village Transformational Mixed Use Development in Cleveland Heights. This project, sought by an affiliate of WXZ Development of Fairview Park, had the largest dollar-amount TMUD request in Northeast Ohio — $14.6 million.

Also missing out was the Downtown Solon redevelopment of the former Liberty Ford dealership, 32811 Aurora Rd. RHM, the Krueger Group, Passov Group and others who teamed up as JJJ Real Estate LLC requested $2 million to help it build apartments, a hotel, retail, food hall and public plaza. It was the group’s second time it came up short for a TMUD.

RMS Investment Group, which is leading the Van Aken District development at the east end of the Blue Line rapid transit in Shaker Heights, did not win a $1.5 million TMUD. It sought a TMUD in the prior round for the high-rise Raye Apartments but got their public financing from the city. Projects that are already under construction are eligible for TMUD credits but not those that are completed.

Elsewhere in Northeast Ohio, three general projects located more than 10 miles from a city having at least 100,000 people (ie: Cleveland and Akron) missed out on TMUDs. They were 20 Federal Place in Downtown Youngstown which sought $6,252,872, the Harter Bank Building/Key Bank Annex in Downtown Canton requested $660,750, and the Jefferson Medina Redevelopment on Pearl Road in Medina Township sought $2 million.


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