Ohio Awards Tax Credits To 7 Cleveland-Area Redevelopment Projects
Eight development projects in Northeast Ohio will receive tax credits from a highly competitive state program that aids historic rehabilitation, including seven sites in Cleveland and one in Ashtabula.
Many of the buildings are currently vacant or generate little economic activity for the area, according to a release from the Ohio Development Services Agency. The projects will drive further investment and economic interest once complete, the release said.
“Working with local community and business leaders, we’re removing blight in neighborhoods and transforming these buildings into new places for Ohioans to live and work,” said ODSA Director Lydia Mihalik.
The largest award for the region, $5 million in tax credits, went to a project at Erieview Tower in Downtown Cleveland.
Redevelopment plans there call for turning 20 of the building’s 40 floors into a hotel and apartments, with a total projected cost of more than $81 million.
“The reality is that oftentimes building a ground-up project is more efficient and less expensive than rehabilitating and converting to an adaptive reuse,” said Anthony Delfre, a managing director at investment bank Brown Gibbons Lang & Co. “So the tax credits are critical as it relates to being able to implement the conversion.”
The Cleveland area lacks mixed-use space that includes office, hotel and residential space, Delfre said, and this project would help bridge that gap. The mixed nature of the project also provides some protections, he said.
“COVID has had a pretty significant impact on hotels, and it’s a global issue just given the travel restrictions,” he said, “so we think the other uses — multi-family, office — provide some protection against some of the challenges related to hotel capitalizations right now.”
Erieview Tower is listed on the National Register of Historic Places. The redevelopment project is projected to be complete in late 2022, Delfre said.
A project from the Dalad Group to redevelop the former West Side YWCA in Ohio City also received tax credits. The nearly $2 million will aid a project meant to turn two buildings, previously a mansion and a dormitory, into apartments.
“We thought it was an opportunity to take a great site, a lot of history, and turn it into something new, provide some life,” said Dalad Group Vice President of Development and Construction Andrew Iarussi.
The building previously housed a Catholic organization and served as a home for people with developmental disabilities, Iarussi said. The redevelopment plan also includes the construction of a new apartment building and parking on the property, with a total project cost of nearly $20 million.
A former grocery store on Madison Avenue in Lakewood’s Birdtown neighborhood also received state tax credits. The proposed $4 million development to turn the property into storefronts and residential units received nearly $670,000.
The building has served a variety of commercial uses, said Historic Preservation Group owner Heather Rudge, but the residential portion has been vacant for years.
“The plan is to remove the non-historic alterations,” Rudge said, who is working on several of the restoration projects in addition to the Lakewood building. “The storefronts have been altered, there’s a metal-pent roof where the signs historically would have been, so all of that will be removed.”
Five other local projects were awarded tax credits through the program:
- A former industrial complex on Superior Avenue, which previously housed users ranging from women’s clothing manufacturers to wood furniture and paper, is slated to become 47 apartments. It is getting $1.65 million in tax credits.
- American Savings Bank on Huron Road in Cleveland’s Gateway District will become a restaurant and short-term rental property. It’s receiving $168,000 in credits.
- First Methodist Church on Euclid Avenue in Midtown was awarded $250,000 in credits for a project to turn it into an event space and offices. The church, built in 1905 with an addition in 1965, is currently vacant.
- The Switzer Building in Cleveland’s Glenville neighborhood has been vacant for 10 years and is currently in disrepair. A redevelopment plan to preserve and restore the building for residential use was awarded $100,000 in credits.
- The Carlisle-Allen Co. Complex and Masonic Temple in Ashtabula is receiving $2 million in credits. The project includes four buildings in downtown Ashtabula, which has been vacant for more than two decades. It will be redeveloped into senior apartments and restaurant space.
In all cases, the tax credits will not be issued until project construction is complete.