June 19, 20195 yr I'm not concerned with this. They sold their building so they probably had to get out of there. NuCLEus, even if started in 2019, won't be ready to move in to until 2022 I'm guessing. It's hard to be hopeful on this project in general though... Edited June 19, 20195 yr by RE Developer In Training
June 19, 20195 yr Ah. I was in the National City building yesterday and saw a pull-up banner for Stark talking about something going on on the 13th floor. I failed to put 2 and 2 together and was wondering what it was about. My hovercraft is full of eels
June 19, 20195 yr 46 minutes ago, Eastside said: "Today is the last day at our office on West 3rd St here in downtown Cleveland. Come Monday morning the new headquarters for Stark Enterprises will be located on the 12th and 13th floor of the National City Bank Building at 629 Euclid Ave (above Marble Room for all of you foodies out there)." Stark no longer moving to the Nucleus site? Yikes https://www.starkenterprises.com/a-new-chapter-at-stark-enterprises/ I responded here: "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 19, 20195 yr 52 minutes ago, Eastside said: "Today is the last day at our office on West 3rd St here in downtown Cleveland. Come Monday morning the new headquarters for Stark Enterprises will be located on the 12th and 13th floor of the National City Bank Building at 629 Euclid Ave (above Marble Room for all of you foodies out there)." Stark no longer moving to the Nucleus site? Yikes https://www.starkenterprises.com/a-new-chapter-at-stark-enterprises/ I currently live in this building. They’ve been staked out for a while having their Beacon operations there. This is where they’ve been meeting with prospective tenants and such before showing them the building. Also, MRNs HQ is on the second floor (the Marons own the building, and one of them lives there).
June 19, 20195 yr WEDNESDAY, JUNE 19, 2019 Downtown's nuCLEus stalls with impasse, tiny Stark equity Another bump in the road has stalled the massive nuCLEus development in downtown Cleveland. This time it has stalled from an impasse over a city loan, even as the project has garnered more than 95 percent of its funding and was scaled down to two-thirds of its previous size. The last piece of financing seems to be eluding the joint venture of Stark Enterprises and J-Dek Investments Ltd. That's even more difficult to comprehend when considering Stark's equity contribution to the project may be no more than 1-2 percent, according to a source reportedly familiar with Stark's financing for the project, called the capital stack. MORE: https://neo-trans.blogspot.com/2019/06/starks-nucleus-stalls-with-impasse-tiny.html "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 19, 20195 yr 48 minutes ago, KJP said: WEDNESDAY, JUNE 19, 2019 Downtown's nuCLEus stalls with impasse, tiny Stark equity Another bump in the road has stalled the massive nuCLEus development in downtown Cleveland. This time it has stalled from an impasse over a city loan, even as the project has garnered more than 95 percent of its funding and was scaled down to two-thirds of its previous size. The last piece of financing seems to be eluding the joint venture of Stark Enterprises and J-Dek Investments Ltd. That's even more difficult to comprehend when considering Stark's equity contribution to the project may be no more than 1-2 percent, according to a source reportedly familiar with Stark's financing for the project, called the capital stack. MORE: https://neo-trans.blogspot.com/2019/06/starks-nucleus-stalls-with-impasse-tiny.html It seems weird to zero in on Stark’s equity. It might be small compared to some other projects but he’s a developer not a lender. Lenders provide equity that’s just how real estate works.
June 19, 20195 yr I'd be surprised if the city gave Stark $12 million to build a parking garage. The terms of the grant were that it would be "repaid" from income and other taxes generated onsite. That won't happen just from the garage and retail. The office space and residential are key components of that. P.S. I wish people would quit calling it a loan. Edited June 19, 20195 yr by Mendo
June 19, 20195 yr 9 minutes ago, bumsquare said: It seems weird to zero in on Stark’s equity. It might be small compared to some other projects but he’s a developer not a lender. Lenders provide equity that’s just how real estate works. If I remember my Accounting 121 class, a loan is considered debt not equity.
June 19, 20195 yr Generally, developers have 10% equity in most deals but this equity often comes from investors other than the developer. The developer builds the stack and manages the project. Edited June 19, 20195 yr by freefourur
June 19, 20195 yr 19 minutes ago, Htsguy said: ^OUCH...KJP remind me to ALWAYS respond to any e mail you send me. Why would you assume someone is so petty? I don't write articles a certain way depending if, how or whether someone responds to me. That's not what the pursuit of truth is about. I would still like to talk with Ezra Stark but I do understand why he didn't/couldn't respond to my questions. I probably wouldn't have responded either if we had traded places. Doesn't mean I shouldn't have to try to reach out to him and report that I made the attempt. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 19, 20195 yr 2 minutes ago, freefourur said: Generally, developers have 10% equity in most deals but this equity often comes from investors other than the developer. The developer build the stack and manages the project. Yes, exactly. The way this project benefits from the opportunity zone is limited partners with capital gains to shelter investing through an OZ fund. That's where much of the equity is coming from I suspect.
June 19, 20195 yr Incidentally, the "right" way to get more money in this project is for Stark to tell his future office tenants that their rents will be higher. If we're really facing a shortage of Class A space, and those tenants really want new space, they won't have much choice in the matter. Not sure if that's necessarily the case, though.
June 19, 20195 yr 2 minutes ago, StapHanger said: Yes, exactly. The way this project benefits from the opportunity zone is limited partners with capital gains to shelter investing through an OZ fund. That's where much of the equity is coming from I suspect. I'd be willing to bet that Stark/J-Dek had most of the equity already lined up before the tax bill passed. But I'd also be willing to bet that Stark et al were willing to scale down the project rather than terminate it when the tax bill was passed with the Opportunity Zone program included. I'm sure it gave the project, albeit smaller, a new boost. So I hope that there's a couple more investors willing to take advantage of the OZ program and bring this project across the goal line. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 19, 20195 yr 3 minutes ago, KJP said: Why would you assume someone is so petty? I don't write articles a certain way depending if, how or whether someone responds to me. That's not what the pursuit of truth is about. I would still like to talk with Ezra Stark but I do understand why he didn't/couldn't respond to my questions. I probably wouldn't have responded either if we had traded places. Doesn't mean I shouldn't have to try to reach out to him and report that I made the attempt. Just trying to be funny (I clearly failed). My point is that it is a pretty hard hitting blog article. I certainly don't believe Ezra Stark's failure to respond had any impact on your writing (although I bet now he wishes he said something...hope he read it).
June 19, 20195 yr The Scene article from mid-may had a snapshot of the project sources reported to the city, and it suggested $100M of the the total $354M construction budget would be from equity: https://www.clevescene.com/cleveland/cleveland-is-prepared-to-hand-over-a-12-million-loan-to-the-nucleus-project/Content?oid=30501801
June 19, 20195 yr 25 minutes ago, StapHanger said: The Scene article from mid-may had a snapshot of the project sources reported to the city, and it suggested $100M of the the total $354M construction budget would be from equity: https://www.clevescene.com/cleveland/cleveland-is-prepared-to-hand-over-a-12-million-loan-to-the-nucleus-project/Content?oid=30501801 My blog had the same info. But the equity came almost entirely from non-Stark sources, like 98-99 percent....at least, according to my source. 1 hour ago, Htsguy said: Just trying to be funny (I clearly failed). My point is that it is a pretty hard hitting blog article. I certainly don't believe Ezra Stark's failure to respond had any impact on your writing (although I bet now he wishes he said something...hope he read it). Edited June 19, 20195 yr by KJP "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 19, 20195 yr 3 hours ago, Htsguy said: If I remember my Accounting 121 class, a loan is considered debt not equity. Yep, I’m stupid. I immediately jumped to my tax credit experiences where LLCs are formed between the developer and equity provider with the developer only having a nominal stake. I’m any case, developers don’t generally provide the capital.
June 19, 20195 yr 7 hours ago, KJP said: WEDNESDAY, JUNE 19, 2019 Downtown's nuCLEus stalls with impasse, tiny Stark equity Another bump in the road has stalled the massive nuCLEus development in downtown Cleveland. This time it has stalled from an impasse over a city loan, even as the project has garnered more than 95 percent of its funding and was scaled down to two-thirds of its previous size. The last piece of financing seems to be eluding the joint venture of Stark Enterprises and J-Dek Investments Ltd. That's even more difficult to comprehend when considering Stark's equity contribution to the project may be no more than 1-2 percent, according to a source reportedly familiar with Stark's financing for the project, called the capital stack. MORE: https://neo-trans.blogspot.com/2019/06/starks-nucleus-stalls-with-impasse-tiny.html "But it has already been substantially scaled down from a $500+ million project that would have put the city's second-tallest skyscraper on downtown's second-biggest parking crater, across Huron Road from the Rocket Mortgage FieldHouse." Hey @KJP - wasn't the original plan set to be the fourth-tallest building downtown? (And fifth tallest in the state, LOL.) Did I miss something? When is the last time I-71 turned a profit?
June 20, 20195 yr The original plan was smaller. But I seem to recall it was only a massing. Then it was increased to a 54 story skyscraper which would have made it Cleveland's second tallest. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 20, 20195 yr 10 minutes ago, KJP said: The original plan was smaller. But I seem to recall it was only a massing. Then it was increased to a 54 story skyscraper which would have made it Cleveland's second tallest. I did some internet digging - here's the article I was remembering: https://www.cleveland.com/business/2015/01/first_look_nucleus_project_ren.html#incart_m-rpt-1 By Michelle Jarboe, The Plain Dealer CLEVELAND, Ohio -- A residential tower at the nuCLEus project in downtown Cleveland could stand 54 stories -- or 647 feet -- high, making it the city's fourth-tallest building. ****** Side note for those less familiar (I know you know this, Ken), current tallest in CLE are: Key Tower 947 ft, Terminal Tower 771 ft, 200 Public Square 658 ft (so the original NuCLEus plan was only a bit shorter), Tower at Erieview 529 ft. All of which will slide down a slot once SW builds their new HQ. Hopefully. ? When is the last time I-71 turned a profit?
June 20, 20195 yr Ah, now I understand. You're counting feet, not stories. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 20, 20195 yr I'm thinking about this prevailing wage impasse as a project cost issue. Wondering if anyone on the forum has any ballpark idea what is the number of man-hours involved in a project of this magnitude. Number of hours times (prevailing wage rate minus the wage that Stark can contract for) would equal the cost impact to Stark's bottom line on the project.
June 20, 20195 yr In a market that’s as busy as it is, I don’t know that the gap is that significant between open shop and prevailing wage right now.
June 20, 20195 yr 6 minutes ago, Klingaling87 said: In a market that’s as busy as it is, I don’t know that the gap is that significant between open shop and prevailing wage right now. I don't know if it's just about the wages but having to keep track of all payrolls and submit them for approvals. This is fairly time consuming and requires a lot of resources.
June 20, 20195 yr 8 minutes ago, Klingaling87 said: In a market that’s as busy as it is, I don’t know that the gap is that significant between open shop and prevailing wage right now. That's interesting to know. How might this play out with the fact that Stark has his own construction company? Could the prevailing wage requirement upset whatever arrangements he has set for Arbor? http://www.construction-today.com/sections/commercial/3442-stark-enterprises-arbor-construction "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 20, 20195 yr The Beacon is being built with all union labor, I.e. prevailing wage. This isn’t foreign to them. The majority of Crocker and Eton were as well.
June 20, 20195 yr 2 hours ago, marty15 said: The Beacon is being built with all union labor, I.e. prevailing wage. This isn’t foreign to them. The majority of Crocker and Eton were as well. I’ve heard that the beacon had some non-union subcontracts involved, albeit a majority were union.
June 20, 20195 yr @KJP any sense of how your article is being received in development circles? Lots of clicks on it I hope.
June 20, 20195 yr @jeremyck01 No reaction. Clicks are at routine numbers...about 400 so far. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 21, 20195 yr I'm not sure if it relates, but the port authority did pass a requirement this past October to require a prevailing wage on projects. https://www.cleveland.com/business/2018/10/port_of_cleveland_ups_inclusio.html
June 27, 20195 yr SB39 was passed in the Senate yesterday and introduced in the House today: https://www.legislature.ohio.gov/legislation/legislation-status?id=GA133-SB-39
June 27, 20195 yr How was it introduced last year? I think the other way around House First Then senate. House Passed and it ran out of time at the Senate level.
June 27, 20195 yr Yeah, that's right. It is going in reverse order this year. I'm hopeful that it proceeds quickly in the House given it was passed there just a few months ago in the prior cycle.
June 27, 20195 yr 6 hours ago, Sapper Daddy said: That’s great news! Curious how many preleased are not currently living in downtown or Cleveland proper. Hope it casts a wide net attracting new residents. Anyone pick the Stark rep’s brain regarding NuCLEus? Nope. No questions were asked about nuCLEus. 5 hours ago, Mov2Ohio said: I heard from a source at the city that construction on NuCLEus will start in August. However since the project has been announced comments on when it would start have proved wrong, so we will see. I wish I would have heard that this morning. I would have asked the Stark rep (Brian Weisberg, VP of residential operations) about it. So I'm asking around to the usual suspects. EDIT: I would have heard that this morning at the CRE summit if I had answered my phone! Someone called me but didn't leave a voicemail, but called me later in the evening with some good news.... Blog article coming. ? Edited June 28, 20195 yr by KJP "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 28, 20195 yr FRIDAY, JUNE 28, 2019 NuCLEus gets financing, possible August groundbreaking To paraphrase Mark Twain, the reports of the nuCLEus development stalling were greatly short-lived. For those of us who welcome investment in downtown Cleveland, we're grateful for the news. Just last week, sources said all signs indicated that the $354 million project to build two 24-story towers between Prospect Avenue, Huron Road and East 4th Street had stalled. The delay apparently was the result of complications surrounding a $12 million loan from the city. It was among the final pieces of financing for the project. But this week... MORE https://neo-trans.blogspot.com/2019/06/nucleus-gets-financing-possible-august.html "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 28, 20195 yr @KJP I’m guessing this is the big news you hinted at posting earlier in the week? Very good news indeed.
June 28, 20195 yr 1 minute ago, jeremyck01 said: @KJP I’m guessing this is the big news you hinted at posting earlier in the week? Very good news indeed. No. This article popped up in the last minute. The other one is still coming. ? "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 28, 20195 yr Just get some dang shovels in the ground already! I've only lived here a handful of years I can't imagine how annoying this start/stop game has to have been with the UO community over the past 10!!
June 28, 20195 yr 2 minutes ago, KJP said: No. This article popped up in the last minute. The other one is still coming. ? Nice, sounds like a good news overload.
June 28, 20195 yr Guess I'm having crow for lunch today. I really thought this would be Warehouse District 2.0: Electric Boogaloo. Good to see another crane in the sky in the near future.
June 28, 20195 yr Don't change your lunch order until you see shovels in the ground. And not the ceremonial kind. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 28, 20195 yr 9 minutes ago, Mildtraumatic said: Hopefully no phases either.. Thinking of Avenue district. Got some movement going on over there, too. Hopefully it pans out. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
June 28, 20195 yr Great news! - looks like the recent streak of big projects will continue with Lumen and Nucleus overlapping - I just wish the Nucleus apartment building wasn’t so - how should I say it...unattractive...
June 28, 20195 yr 33 minutes ago, KJP said: Got some movement going on over there, too. Hopefully it pans out. Are you like talking Avenue District Tower Phase 2
June 28, 20195 yr 58 minutes ago, CleveFan said: Great news! - looks like the recent streak of big projects will continue with Lumen and Nucleus overlapping - I just wish the Nucleus apartment building wasn’t so - how should I say it...unattractive... Unattractive based off of a rendering? How many times have we - on this very site - said something was "ugly" or "unattractive", yet love it once constructed AND completed?. Although style/taste is subjective to each individual, lets give the project a chance to get off the ground before we start labeling and nitpicking. I for one love the rendering. If they convince others in my tax bracket to like it, and rent, this could be another successful game changing development. I'm hoping for the best as once this project is nears completion as rents in downtown will increase. People who want a more urbane lifestyle will now have additional housing choices. This could possible have an impact on employment. As the 24 population increases, employers again will look to DT as the best to locate to from inside the county/region and outside. That will make DT CLE more self serving and self reliant closer to 24 hours a day. Completion of this project will also make property on Carnegie, Prospect, Chester, Payne, Rockwell and Superior all ripe for development, with a mix of new builds and conversions. Lastly, we could see a more robust "for sale" market to emerge. I ??AM??HERE??FOR??ALL??THIS??!
June 28, 20195 yr I think its attractive. Maybe he meant not attractive in stature. Love to see this get built and keep momentum going downtown making it a better place to work play and live. What will downtown be like with 30.000 residents? Cleveland will be a player in attracting companies nationally. Edited June 28, 20195 yr by Mildtraumatic
June 28, 20195 yr happy friday indeed -- its great to see this getting resolved and soon underway. the pre-leased agreements with nucleus and the beacon to date are also highly encouraging. stark's long running pr efforts and jockeying with the city are paying off.
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