Backers of a proposed $55 million hotel for Cleveland’s Ohio City neighborhood continue to push ahead for the project but are fighting financial headwinds in the hotel and hospitality market (DLR). CLICK IMAGES TO ENLARGE THEM.
Offer of state bonds keeps project alive
A state panel this week extended its offer to help finance construction of a new 129-room boutique hotel in Cleveland’s Ohio City neighborhood. While that doesn’t guarantee the hotel will move forward, the developer leading the project said construction can’t start without the state’s financing.
The board of the Ohio Air Quality Development Authority (OAQDA) on Wednesday passed a resolution to extend the timeline in which its staff is authorized to “issue revenue bonds of the state of Ohio to assist in the financing of the costs of the acquisition, construction, equipping and installation of air quality facilities for the use of 2600 Lorain, LLC.”
Offered until Jan. 31, 2027 are $35 million worth of state bonds for the roughly $55 million project that would build a Marriott Tribute Portfolio boutique hotel plus several food-beverage venues at the northwest corner of Lorain Avenue and West 26th Street.
The firm 2600 Lorain LLC is an affiliate of Cleveland-based Places Development which is spearheading the hotel project. The air quality facilities noted in the resolution include the seven-story building’s proposed use of mass-timber in its construction.
“The air quality facilities which constitute the project include all buildings, facilities and property set forth on Exhibit A hereto as are necessary for the operation of the project,” as noted in a resolution passed by OAQDA’s board one year ago but had expired two weeks ago.
The presence of wood-timber construction above a first-floor reinforced concrete deck is noted in this axonometric view of the proposed Ohio City Hotel (DLR).
Through a public records request, NEOtrans secured a copy of last year’s resolution as well as the one passed this week. However, no exhibits or other attachments were included in the public records release to NEOtrans. “The authority will consider this request closed,” said an OAQDA spokesperson.
The use of mass timber instead of reinforced concrete can save up to 40 percent in ongoing heating and cooling emissions for a building’s user as well as reduced emissions, according to Dan Whalen, principal at Places Development. Only the frame of the building’s first floor will be constructed of reinforced concrete.
Whalen also says mass-timber harvesting, preparation and transport are more environmentally friendly than manufacturing and transport of steel and concrete for traditional structures. Letters from the city, school district and Cuyahoga County expressed support of OAQDA’s bond financing of the hotel project.
While Whalen says the state financing is essential for the project to move forward, the fact that it’s been available to the developer for the past year doesn’t guarantee that the project will advance. His hotel project, as well as others, have faced financial headwinds in getting construction underway although Whalen declined to discuss financial details.
“The borrower (Lorain 2600 LLC) remains committed to the project as demonstrated by the considerable investments in the project, but is requesting an extension to allow for additional time to secure and finalize project investment based on the continued complexities in the financing market for the hotel and hospitality industry and to finance the technical design of the project subject to validation by the authority,” the OAQDA resolution reads.
The main entrance to the planned Marriott Tribute Portfolio boutique hotel will be on West 26th Street, opposite of Market Avenue. A restaurant with outdoor dining along West 26th also is planned (DLR).
Two local projects have checked out early from the construction pipeline. A proposed 132-room Motto By Hilton was designed out of the long-planned Bridgeworks project at the north of Ohio City. Similarly, the former Holiday Inn in Midtown was to be renovated as a Delta by Marriott Hotel but now will be converted into 198 apartments.
Other hotel projects in Cleveland are advancing. They include an AC Hotel in the former Holiday Inn Express in Downtown Cleveland, a new but as-yet unidentified hotel in the former Cleveland Milling Company four mill in the Flats, a W by Marriott hotel in the Erieview Tower, and a hotel in Bedrock’s proposed Rock-And-Roll Land hotel-theater.
But no hotel exists in Ohio City, a fact that Whalen noticed when he was in charge of hospitality business at Northbrook, IL-based Harbor Bay Ventures. Harbor Bay developed, owned and managed the mixed-use, mass-timber Intro complex at the southeast corner of Lorain Avenue and West 25th Street.
The nine-story building, which has a rooftop event center called Truss, has attracted more than 150 events per year. But Whalen said it could have attracted even more if there was a hotel close by in Ohio City’s bustling Market District.
“This neighborhood desperately needs and would benefit from a neighborhood-driven boutique hotel,” Whalen said in 2024. “There’s so much activity in this neighborhood, yet there’s no hotel west of the (Cuyahoga) River until you get to the airport.”
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