City Club Apartments in Downtown Cleveland are now Skyline 776 after the development’s major lender bought the company that owned the property. The building, which is now mostly complete, has a new property management company starting this week (KJP). CLICK IMAGES TO ENLARGE THEM.
Detroit-based private equity firm steps up
Faced with a difficult financial situation involving multiple development projects nationwide, City Club Apartments of Farmington Hills has sold its interest in the nearly completed 23-story mixed-use tower at 776 Euclid Ave. in Downtown Cleveland. The buyer was its primary financial backer, Detroit-based Finance Michigan. And, as a result of the change, the building will be rebranded as “Skyline 776.”
Changeover to the new name will become more apparent this week as Finance Michigan has brought on a new building manager, Village Green Property Management of Southfield, MI. Village Green will take the reins of Skyline 776 on Aug. 1, said Stanley Dickson, Jr., managing director of Finance Michigan, a private equity firm founded in 1981.
“We have been involved in this project since the beginning, and in mid-June became the sole owner,” Dickson said in an e-mail to NEOtrans. “We believe in the growth of Cleveland and are excited to bring luxury living with hotel-style amenities to downtown. We have assembled a great management team and are confident this building will become a beacon of pride for the city.”
A side benefit of the new name is that it will avoid confusion with the historic venue of free speech, The City Club of Cleveland, founded in 1912. It moved last year from 850 Euclid, that was next door to the new apartment tower, to 1317 Euclid in the Playhouse Square theater district.
City Club Apartments aggressively pursued developments in the Midwest and Northeast in recent years. But with interest rates and construction costs rising after the pandemic, the company and its Chairman and CEO Jonathan Holtzman could no longer afford to pay all of its bills.
The official Skyline 776 logo by Adreena (99designs.com).
In May, a receiver is working to stabilize City Club Crossroads Apartments in Kansas City after Holtzman advised the holder of an $80 million loan it would be “walking away.” A month before, a bank began foreclosure proceedings against City Club’s 21-story apartment building on Chicago’s Gold Coast and forced Holtzman to sell.
In January, citing ongoing delays and complications, Target said it was backing out of a ground-floor retail space at a City Club apartment development on Woodward Avenue in Midtown Detroit but Holtzman said Target had a lease. Over in Detroit’s Elmwood Park neighborhood, City Club Apartments Lafayette Park went on the market in December 2023. City Club is seeking $35 million three years after it put $25 million worth of renovations into the aging building.
Disposition of City Club’s property in Cleveland’s central business district, owned by affiliate CCA CBD Cleveland LLC, was relatively drama-free. Rather than buy the asset through a deed transfer, Finance Michigan acquired City Club’s corporate affiliate through an entity sale. Such a deal offers tax benefits and masks the value of the transfer. Dickson declined to disclose the terms of the sale.
Residential leasing has only recently begun, but commercial leasing had been underway since last year. So far Dogtopia doggie day care has taken a 5,993-square-foot space, J’Adore restaurant has 5,891 square feet, Green Box speakeasy took 2,828 square feet, and Cafe Tartine coffee/wine bar has 975 square feet.
“The building is roughly 35 percent preleased and seeing a steady stream of interest,” he said. “We expect leasing to ramp up as the amenities and building’s interior quality really take shape over the next 30 to 45 days.”
This July 19 photo shows that exterior work is almost finished at Skyline 776, except for decorative panels on the top two floors which feature a curving façade. Rooftop amenities on the 23-story building are due to be finished this fall with the pool ready next May (photo by Ethan Molinar).
The City Club Cleveland Apartments has had its share of construction delays, like other major projects around town including the new Sherwin-Williams headquarters, Library Lofts in University Circle and Cleveland Clinic’s many buildings. City Club’s company’s Web site still shows its Cleveland project was due to be completed in “Summer 2023.” Instead, a topping-out ceremony was held in August 2023. Groundbreaking was in December 2021.
A time-consuming feature was the decorative tiles on the building’s exterior. They were custom-made and took more time to deliver. The top two full floors of the building have a curving façade which adds further complexity to the manufacture of the decorative tiles. Dickson said rumors that some of the tiles were installed incorrectly are untrue.
“The top few floors of panels need to be finished with custom artwork, but there aren’t any installed incorrectly,” he said. “We have a lot of special and methodical people completing those panels.”
That was backed up by Shawn Zbasnik, director of marketing at Cleveland Construction Inc., the general contractor of Skyline 776. He also said the sale of the building has had no effect on the progress of their construction work.
Over in University Circle, the former Stokes West Apartments were re-branded as Skyline On Stokes by the project’s primary financial backer, Finance Michigan (LDA).
“There’s been no stoppage of work on our team,” Zbasnik told NEOtrans. “We’re making great progress.”
On July 9, when Finance Michigan and its legal representative Trowbridge Law Firm Pc filed a tradename registration with the Ohio Secretary of State for Skyline 776, they also submitted one for “Skyline On Stokes.” That refers to a project previously called Stokes West Apartments, a 261-unit development now rising in the 2100-block of Stokes Boulevard.
“We are the primary investor in Skyline on Stokes, a project across the street from the Tudor Arms Hotel,” Dickson said. He added that the structure is due to be topped off “a few weeks from now.”
Developing Skyline on Stokes is Cleveland-based Brent Zimmerman Development and Rust Belt Development plus ACRE of Atlanta and New York City. The construction manager is Geis Construction of Streetsboro and Cleveland. Geis also designed the building along with LDA Architects and will manage the property once construction is completed in early 2025.
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