- CDA closes two major downtown projects 09 17 12
Cleveland Development Advisors closes two major downtown projects
Monday, September 17, 2012
Cleveland, Ohio—Cleveland Development Advisors, (CDA) the Greater Cleveland Partnership’s real estate and business development finance affiliate, closed two major projects last week: the Hanna Building Annex and the 800 Superior Avenue project.
Hanna Building Annex: CDA provided a $7 million Federal New Markets Tax Credit allocation, as well as a $2 million loan to bridge Ohio historic preservation tax credit equity in an effort to finance the adaptive reuse of the Hanna Annex office building in PlayhouseSquare. The historic renovation of this 120,000 square-foot, nearly vacant office building is the first housing development in PlayhouseSquare and is part of a larger neighborhood redevelopment plan being implemented by PlayhouseSquare Foundation.
“The benefits to financing residential housing units in Cleveland go beyond providing dwellings,” said CDA President Yvette Ittu. “We know that in order to make Downtown Cleveland a more attractive place to spur greater retail and business development, we have to attract more residents.
“With a 96 percent occupancy rate, there is significant demand for new, attractive housing downtown. The strategy of repurposing older, Class B office space into housing is a great way to fill that demand leading to a more vibrant, attractive and productive city."
The Hanna Building Annex project includes 64 market-rate and 26 affordable rental housing units, 12 corporate housing units and 10,000 square feet of ground-floor retail that is master leased to PlayhouseSquare, which hopes to keep the some existing tenants and bring in other stores and service businesses to cater to residents and the neighborhood.
The financing was a collaborative effort from several of parties and includes conventional financing, federal and Ohio historic tax credits and new markets tax credits. PNC is providing $9.8 million in construction financing, as well as more than $7 million Federal New Markets and Federal Historic Tax Credit Equity. PNC also provided an additional $2.3 million NMTC allocation.
The $2 million loan provided by CDA will bridge a portion of the $3.7 million Ohio Preservation Tax Credit equity that will be received by the property owner as a tax refund for the tax year in which the project is completed and gains approval from the National Park Service. The projected is scheduled to be completed by September 2013. The project is expected to create nearly 80 construction jobs and 60 permanent jobs.
800 Superior: CDA provided a $10 million New Markets Tax Credit allocation to finance the $24 million 800 Superior project. The building was purchased by AmTrust Financial Services, a publically-traded Insurance company with offices throughout the United States. The once nearly vacant building will now be home to at least 1,000 new employees of AmTrust and its affiliated companies. Located in the NineTwelve District, an area with designated as a development priority by the City of Cleveland, civic and business leaders, the creation of at least 1,000 new jobs will serve as a catalyst for future development of a number of other buildings in the District in need of investment and occupancy.
Several other parties assisted in making this project a reality. Key Bank provided an additional $10 million New Markets Tax Credits, while the City (TIF designation), Cuyahoga County ($3.0 million loan), the State of Ohio ($5.0 million loan and Job Creation Tax Credits) provided much needed assistance that made it attractive for AmTrust to make this major Cleveland investment.
About Cleveland Development Advisors
Cleveland Development Advisors is a real estate and business development finance organization that invests privately-funded capital and New Markets Tax Credit allocations into catalytic projects designed to advance economic and community development projects throughout Cleveland. www.clevelanddevelopmentadvisors.com
About the Greater Cleveland Partnership
The Greater Cleveland Partnership mobilizes private sector leadership, expertise and resources to create attractive business conditions that create jobs, grow investment and improve the economic prosperity of the region. www.gcpartnership.com.
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