Bingo!

 

This has been an historic battle in the State of Ohio. As I have commented elsewhere on this blog, historically, the State has been very slow to support legislation that would benefit its urban centers. Ongoing issues with urban transit, gun legislation, urban development, even the utilization of disposable plastic bags, has fallen on deaf ears and been met with opposition; the Feds often times seem to be more likely to support urban development-related issues than the State. It's unfortunate, but it would appear that unless bills are written that also benefit the suburban/rural constituents, the likelihood of passage is nil. 

Edited December 12, 20195 yr by Frmr CLEder

I'm not sure that the historic tax credit for which they're raising for rural projects is the same as the TMUD tax credit. 

 

EDIT: I checked and it appears that the amendment is to increase the credit amount for the existing historic rehab tax credit as established under http://codes.ohio.gov/orc/149.311. Perhaps someone has found something different.

Edited December 12, 20195 yr by KJP

11 hours ago, Larry1962 said:

I agreed because it seems like both of the OHIO chambers is controlled by rural politics.

 

 

 

 

at least historically, it always seemed like suburban politics control the state more than rural or urban. that's how, for example, les wexner got I-270 bumped to the top of the list to be widened for his easton lifestyle mall when it wasn't even on the radar to be done. suburban mindset drives ohio state politics and overall suburbs get all the gains with roadbuilding and the like. they certainly do not care about things like downtown rehabbing when all new is preferred. i doubt the capitalista politicians as a whole care about the price of soybeans and tomatos or whatever other rural issues so much either. maybe its changing or changed, but i doubt it, that is just the way it is, or where the muscle is anyway.

This is becoming almost as fantasifull as cityblock.

11 hours ago, KJP said:

I'm not sure that the historic tax credit for which they're raising for rural projects is the same as the TMUD tax credit. 

 

EDIT: I checked and it appears that the amendment is to increase the credit amount for the existing historic rehab tax credit as established under http://codes.ohio.gov/orc/149.311. Perhaps someone has found something different.

YES they are different tax credits.

 

Thats what I meant, the rural districts are VERY UNLIKELY to get a 10% TMUD TAX CREDIT project thats qualified. 

 

AND so the sponsors of the TMUD BILL are trading tax credits via UPPING THE HISTORICAL TAX CREDIT FROM 25% to 35% for the rural historical rehabs to encourage those rural members to vote for the TMUD....

30 minutes ago, Larry1962 said:

YES they are different tax credits.

 

Thats what I meant, the rural districts are VERY UNLIKELY to get a 10% TMUD TAX CREDIT project thats qualified. 

 

AND so the sponsors of the TMUD BILL are trading tax credits via UPPING THE HISTORICAL TAX CREDIT FROM 25% to 35% for the rural historical rehabs to encourage those rural members to vote for the TMUD....

 

Or they just see an opportunity to boost areas that are losing jobs to the cities. Versions of the TMUD tax credit bill have already passed both houses by overwhelming margins.

On 12/12/2019 at 6:54 PM, Larry1962 said:

YES they are different tax credits.

 

Thats what I meant, the rural districts are VERY UNLIKELY to get a 10% TMUD TAX CREDIT project thats qualified. 

 

AND so the sponsors of the TMUD BILL are trading tax credits via UPPING THE HISTORICAL TAX CREDIT FROM 25% to 35% for the rural historical rehabs to encourage those rural members to vote for the TMUD....

 

 

now that sounds like a win win deal to me. and thats the thing, the urban and rural can usually work it out. its the massive suburban block that stops or slows things like this. they dont care about no historic.

Hearing rumors that Benesch, the major law firm that pledged to take 100,000 SF in nuCLEus, is getting impatient with the delays in this project. I haven't heard from anyone official at Benesch that they're pulling out, but their lease at 200 Public Square expires in July 2022. They're going to have to get another extension at this point, because even if the project had all of its financing right now, it would be hard-pressed to finish construction on the office tower by July 2022.

19 minutes ago, KJP said:

Hearing rumors that Benesch, the major law firm that pledged to take 100,000 SF in nuCLEus, is getting impatient with the delays in this project. I haven't heard from anyone official at Benesch that they're pulling out, but their lease at 200 Public Square expires in July 2022. They're going to have to get another extension at this point, because even if the project had all of its financing right now, it would be hard-pressed to finish construction on the office tower by July 2022.

Hopefully Benesch gets an extension and the TMUD tax credit passes and the original nucleus gets built. 

Given that SHW is a conservative company, it is more likely to design its HQ in a manner that it can add on to it to accommodate future growth than build excess capacity and lease it out, especially since office lease revenues per square foot don't cover construction costs per square foot in downtown Cleveland.

 

Why would anyone invest emotional energy in a project over which they have no control? Doesn't seem like a wise investment. 

^Except that you can't build an extra 20-30 stories on a skyscraper after its built. I agree SHW is a conservative company, but with their acquisition of Valspar, they not sitting idly by either. Here's hoping that they have concern for image as well and want to build a very tall tower, even if it means renting out some floors for the first decade or so, as what they might lose in rent is offset by gains in stature.  Afterall, it must at least outshine the HQ of one of their primary competitors, PPG in Pittsburgh (which now owns Cleveland-founded Glidden Paints):

 

https://www.lera.com/ppg-industries-corporate-headquarters

 

PPG HQ: "The project consists of a 40-story central office tower with a glass-enclosed winter garden, a set of 5 smaller office buildings and a central courtyard and included a below-grade 700-car parking facility."

 

 

No but you can build a short building that can be added onto or, more likely, a parking deck you can build on top of, or leave a greenspace that can be developed, etc.

19 hours ago, simplythis said:

Hopefully Benesch gets an extension and the TMUD tax credit passes and the original nucleus gets built. 

The original nuCLEus included a hotel.  Not sure there is a need for additional hotel rooms downtown currently.  I wasn't too fond of the "Jenga" tower, but I would rather see one tall tower instead of the revised version with two smaller towers.

On 12/26/2019 at 11:34 PM, KJP said:

Given that SHW is a conservative company, it is more likely to design its HQ in a manner that it can add on to it to accommodate future growth than build excess capacity and lease it out, especially since office lease revenues per square foot don't cover construction costs per square foot in downtown Cleveland.

 

Why would anyone invest emotional energy in a project over which they have no control? Doesn't seem like a wise investment. 

 

It happens everyday on these boards! ?

 

WEDNESDAY, JANUARY 15, 2020

Ohio real estate megaproject tax credit may advance in February

 

Legislation that would aid Ohio real estate megaprojects and create thousands of jobs could advance in the Ohio House of Representatives next month, according to a spokesman for State Rep. Paul Zeltwanger, chair of the House's Workforce & Economic Development Committee.

The committee is scheduled to meet again on Feb. 5 to vote on whether to accept a substitute Senate Bill 39 which contains multiple amendments. News and details about those amendments were exclusively reported here at NEOtrans in December.

Six amendments to a proposed Transformational Mixed-Use Development (TMUD) tax credit bill were accepted Dec. 11, 2019 by the House's Workforce & Economic Development Committee. The committee then adjourned for the holidays.

 

MORE:

https://neo-trans.blogspot.com/2020/01/ohio-real-estate-megaproject-tax-credit.html

With everything going on development-wise in Cleveland I had almost forgotten about this!  Thanks for keeping us up to date.  I do hope this can progress- as NuCleUs, even in its revised state, will be a significant change to an otherwise woefully inactive deadzone.   The only thing I wish is that they would modify the design of that parking garage ?

Edited January 16, 20205 yr by mrclifton88

Looking at that design, I'm wondering if they are building the Huron Road side of the parking garage to add a second residential tower at some point.  It certainly looks like a second tower and expanded amenity deck could fit there nicely.  Like a space was intentionally left for it.  But, then again, I may be reading too much into it.

 

Also, I really wish they would wrap this parking garage all around.  Whenever I see huge unadorned parking pedestals like this I think of Florida.  I don't want Cleveland to look like Florida!!!!

Hypothetically, if the TMUD legislation is passed with the house amendments and there is a limit of 4 projects per year, how does this impact the timeline of a project like NuCLEus? Assuming that there is one round of credits awarded per year, would the deadline for the first round likely be a year out from whatever date the bill becomes effective, or would it possibly be a shorter deadline for the first year's credits?

Assuming the legislation is passed in March or April with no further changes, then the Ohio DSA overseeing the tax credits has to develop draft agency rules based on the newly passed law for the issuance of the credits, have a public comment period, then adopt the rulemaking. That will take months, perhaps up to a year, depending on how fast they get around to it. There would be a public notice of the availability of the credits and a notice of the rules governing the applications (including deadlines). The tax credit awards would then follow. Insurance companies would start to invest right away in the development that wins the award, so those developments would likely see construction start soon thereafter given the timelines.

 

So if everything went quickly, it's possible that the first tax credit awards could be made as early as November or December of 2020. But nothing in government works quickly. So we're probably looking at sometime in 2021 before the first awards are made. If nuCLEus wins the first round (a big "if" considering their potentially extensive competition; that their office building anchor would produce no new income taxes to the city since it's a relocation from 200 Public Square; and Stark's HQ is also an intra-Cleveland relocation), then nuCLEus might see construction starting by the end of 2021 or early 2022.

If Nucleus competed against 925 Centennial for the tax credit in the same round ,

Wouldn't 925 Centennial be more transformational?

2 minutes ago, simplythis said:

If Nucleus competed against 925 Centennial for the tax credit in the same round ,

Wouldn't 925 Centennial be more transformational?

 

I don't expect a competition. And I don't expect we'll have to wait long to understand why.

So hypothetically, Nucleus, City Club Tower, and SHW construction could be starting and going up at the same time. Wow, would that be an awesome sight to see. 

Edited January 16, 20205 yr by marty15

6 minutes ago, marty15 said:

So hypothetically, Nucleus, City Club Tower, and SHW construction could be starting and going up at the same time. Wow, would that be an awesome sight to see. 

 

 

 

29 minutes ago, KJP said:

 

 

 

I think Nucleus would start construction much later than SHW and City Club

1 hour ago, KJP said:

 

I don't expect a competition. And I don't expect we'll have to wait long to understand why.

So you say 925 Centennial is close to starting construction and will not be needing the TMUD.

Why can't Nucleus find financing to close the gap?

59 minutes ago, simplythis said:

I think Nucleus would start construction much later than SHW and City Club

 

If it starts at all.

 

56 minutes ago, simplythis said:

So you say 925 Centennial is close to starting construction and will not be needing the TMUD.

Why can't Nucleus find financing to close the gap?

 

I don't know. I guess Stark doesn't know the right people nationally.

 

Correction: if Stark wasn't building offices, this project might already be underway with O-Zone money. Office rents are so low in Cleveland, there would have to be a lot more subsidies to make the new-construction office building happen. There's enough subsidies for renovating old buildings into modern office spaces but not enough for building new multi-tenant office buildings. 

Edited January 16, 20205 yr by KJP

1 hour ago, marty15 said:

So hypothetically, Nucleus, City Club Tower, and SHW construction could be starting and going up at the same time. Wow, would that be an awesome sight to see. 

that would be about 6-7 tower cranes.

7 hours ago, marty15 said:

So hypothetically, Nucleus, City Club Tower, and SHW construction could be starting and going up at the same time. Wow, would that be an awesome sight to see. 

I hope the Geis condo tower gets developed soon as well. It would extend the skyline south on 9th in the way Lumen extends Euclid east. 

On 1/15/2020 at 8:12 PM, X said:

Looking at that design, I'm wondering if they are building the Huron Road side of the parking garage to add a second residential tower at some point.  It certainly looks like a second tower and expanded amenity deck could fit there nicely.  Like a space was intentionally left for it.  But, then again, I may be reading too much into it.

 

Also, I really wish they would wrap this parking garage all around.  Whenever I see huge unadorned parking pedestals like this I think of Florida.  I don't want Cleveland to look like Florida!!!!

From what I read in regard to the foundations for the Nucleus project the Huron Garage foundation is NOT designed for adding a tower in later years unfortunately.

Edited January 31, 20205 yr by KJP

I thought 925 Centennial was almost ready to go without the TMUD.

That was the conversation in that thread last month.

1 hour ago, simplythis said:

I thought 925 Centennial was almost ready to go without the TMUD.

That was the conversation in that thread last month.

 

That's my understanding. But until I hear officially from them that their capital stack is complete, I'm going to continue to go with their last official statement which is that Millennia needs the TMUD tax credit for 925 Euclid.

3 hours ago, KJP said:

 

That's my understanding. But until I hear officially from them that their capital stack is complete, I'm going to continue to go with their last official statement which is that Millennia needs the TMUD tax credit for 925 Euclid.

And of course they will never say that until they have decided for sure they won’t pursue the TMUD. Because admitting they don’t need it would disqualify them for it.

 

WEDNESDAY, FEBRUARY 5, 2020

Ohio mega-project bill gets more complex, more backers

 

The Ohio House of Representatives' Economic and Workforce Development Committee today could accept major changes to a bill designed to create a Transformational Mixed Use Development (TMUD) tax credit to kick-start real estate mega-projects.

If accepted, the committee could take testimony on Substitute Senate Bill 39 at the following hearing, tentatively scheduled for Feb. 12 before moving the bill to the House floor for a vote by the 99-member legislative body.

As reported here last month, if the House passes the bill, it would set up a conference committee to iron out differences from an earlier version of the legislation that passed the Ohio Senate 32-1 last summer.

 

MORE:

https://neo-trans.blogspot.com/2020/02/ohio-mega-project-bill-gets-more.html

I'm very surprised this bill has $100 million in tax credits available BEFORE June 30th of this year. And whatever isn't used doesn't roll over into the next state fiscal year. It's gone. The powers-that-be apparently seem to think that they can get this implemented very quickly. And I'll bet that Stark is already polishing their tax credit application for $35 million.

As far as the 10 mile rule, it would appear that if any developer wants to build something

in an inner ring or outer ring suburb then they have a chance at a TMUD tax credit.

So this might spur some development in Srrongsville, Brecksville, Solon, Mayfield ETC.

51 minutes ago, KJP said:

I'm very surprised this bill has $100 million in tax credits available BEFORE June 30th of this year. And whatever isn't used doesn't roll over into the next state fiscal year. It's gone. The powers-that-be apparently seem to think that they can get this implemented very quickly. And I'll bet that Stark is already polishing their tax credit application for $35 million.

So if Stark won that $35 million  tax credit would Nucleus suddenly be on the fast track to construction? Or does implementation just refer to the designation of the funds? 

Probably. They have to show they're under construction to get all of the tax credit.

 

EDIT:  But I wonder if Stark can get this tax credit based on the new criteria for a winning them. They have to show new tax revenues to the city of Cleveland. Their only two tenants for the office building so far are relocations within Cleveland. However, they can show new tax revenues from construction workers, retail workers (if new to Cleveland) and more residents. They are going to have some tough competition.

Edited February 5, 20205 yr by KJP

7 hours ago, KJP said:

I'm very surprised this bill has $100 million in tax credits available BEFORE June 30th of this year. And whatever isn't used doesn't roll over into the next state fiscal year. It's gone. The powers-that-be apparently seem to think that they can get this implemented very quickly. And I'll bet that Stark is already polishing their tax credit application for $35 million.

Also very surprised.  I would have thought such complicated legislation would take 6-8 months to implement.  If the legislation is not passed and signed until say, the end of Feb.,  it will be interesting to see how the application, review and award process is completed so quickly.

...and how quickly Stark moves his project forward. It's been sitting on the shelf for what, five years?

If this is in deed what he's been waiting for, they should be ready to flip the switch upon approval.

Edited February 5, 20205 yr by Frmr CLEder

1 hour ago, Frmr CLEder said:

...and how quickly Stark moves his project forward. It's been sitting on the shelf for what, five years?

If this is in deed what he's been waiting for, they should be ready to flip the switch upon approval.

 

Curious how far they are with plans & specs, given how many iterations we've seen of the design.  Assuming foundations/site plan have at least been static but wondering about the rest of the plans & budgeting.  Gilbane likely has their hands full with the SHW project.  Maybe Turner or Higley or someone else is working on this for Stark?  It was Walsh Group for a while...  when construction was "imminent"...  2+ years ago...

1 hour ago, KJP said:

Probably. They have to show they're under construction to get all of the tax credit.

 

EDIT:  But I wonder if Stark can get this tax credit based on the new criteria for a winning them. They have to show new tax revenues to the city of Cleveland. Their only two tenants for the office building so far are relocations within Cleveland. However, they can show new tax revenues from construction workers, retail workers (if new to Cleveland) and more residents. They are going to have some tough competition.

Income may and sales should be there from retail. What about real estate taxes though?

14 minutes ago, gottaplan said:

 

Curious how far they are with plans & specs, given how many iterations we've seen of the design.  Assuming foundations/site plan have at least been static but wondering about the rest of the plans & budgeting.  Gilbane likely has their hands full with the SHW project.  Maybe Turner or Higley or someone else is working on this for Stark?  It was Walsh Group for a while...  when construction was "imminent"...  2+ years ago...

 

Their CM is Cleveland Construction.

Does anyone know, maybe you @KJP , how far off financially Stark was of meeting the original towers cost?  I feel like the difference was 100mil(the cost of the 54 story tower was like 500mil and he had gathered 400mil), was that it?  If that's accurate, I wonder if Stark could get the whole 100mil offered for this year and move forward with the original plan.  Or is there a limit to how much one project can receive from this tax credit?

 

Thoughts? inside info?

4 minutes ago, NR said:

Does anyone know, maybe you @KJP , how far off financially Stark was of meeting the original towers cost?  I feel like the difference was 100mil(the cost of the 54 story tower was like 500mil and he had gathered 400mil), was that it?  If that's accurate, I wonder if Stark could get the whole 100mil offered for this year and move forward with the original plan.  Or is there a limit to how much one project can receive from this tax credit?

 

Thoughts? inside info?

 

Most of the info is here: https://www.clevelandmetroschools.org/nucleus

6 hours ago, KJP said:

 

Most of the info is here: https://www.clevelandmetroschools.org/nucleus

After re-reading the proposal to the Board, and remembering the indignation of some that said the Stark proposal wasn’t fair to the school district - I still don’t understand how  “nothing” was better than “a whole lot”.  It feels like a real lost opportunity - both for the schools - and for the city.  Imagine Cleveland with the original Nucleus rising- back-to-back with the new SW HQ.  Wow. 

4 hours ago, CleveFan said:

After re-reading the proposal to the Board, and remembering the indignation of some that said the Stark proposal wasn’t fair to the school district - I still don’t understand how  “nothing” was better than “a whole lot”.  It feels like a real lost opportunity - both for the schools - and for the city.  Imagine Cleveland with the original Nucleus rising- back-to-back with the new SW HQ.  Wow. 

 

Original NuCLEus...and Pesht!  Except it's Stark, so none of that was ever going to happen as originally planned.

Does anyone know if anything happened wednesday regarding Sub SB 39.

AND please don't tell me they didn't meet.

2 hours ago, simplythis said:

Does anyone know if anything happened wednesday regarding Sub SB 39.

AND please don't tell me they didn't meet.

 

I'll have an article about it over the weekend.

 

 

Edited February 7, 20205 yr by KJP

Probably meaningless, but I noticed this exchange on Twitter.