8 hours ago, KJP said:

Actually, I took the photo in the morning before they opened. There's an outside deck above the restaurant that's open to the public. In the summer, it's used as an outdoor dining/bar area for Pier W.

By the way, from that vantage point  at Pier W, would Nucleus be located in the gap between The 9 and The Terminal Tower?  (I believe that it would be just about 35 shorter than The 9...) 

13 minutes ago, CleveFan said:

By the way, from that vantage point  at Pier W, would Nucleus be located in the gap between The 9 and The Terminal Tower?  (I believe that it would be just about 35 shorter than The 9...) 

 

On Google Earth, I drew a line from Pier W to the nuCLEus site. The One nuCLEus Place tower would be partially behind Terminal Tower with part of it sticking out from behind the right side of TT. BTW, the Ohio Bell Building is 365 feet. One nuCLEus Place is proposed to be 350 feet high.

 

In a few years, those skyline gaps will be filled in. ☺

On 12/3/2020 at 1:19 PM, KJP said:

 

The legislators are too busy with more important things like passing legislation which will result in more Ohioans dying from COVID and hiding from reporters asking pesky questions about the lack of any action relative to the repeal of the First Energy subsidy

Edited December 7, 20204 yr by Htsguy

Sounds like Ohio. Can't get out of its own way.

Maybe if we knew what  "was" or "is" going on it wouldn't be so exasperating.  Then again,  it might further exasperation.  As far as I know, there has been no significant media attention of any kind to shed light - please, correct me if I'm misinformed on that.  My thoughts - 1) Stark et. al. aren't paying off the right politicians.  (kidding). 2) it may be time for the first ever Urban Ohio petition!  (And folks, watch out for those holiday decorations - up top - it's easy to break a bulb.) 

Check this thread tomorrow.......

^Its 1135pm. I'm checking it in 26 minutes.

Hmmm hopefully Stark found a couple of shovels.

9 hours ago, Pugu said:

^Its 1135pm. I'm checking it in 26 minutes.

 

It won't be until sometime after 1 p.m.

 

But I'm going to pre-write as much as I can.

5 minutes ago, skiwest said:

 

"Remarkable"....sorry, Spanky.

this project is dead.  No amount of subsidy or special TIF is going to save it.  The only saving grace that Stark had was an anchor tenant in Benesch and they are in the midst of re-signing  at 200 PS.  Without an anchor office tenant, the rest of the deal is smoke & mirrors.  Retail?  Nah.  Hotel?  Nope?  Apartments?  meh.  Don't forget also, Stark's plan was to build this with a non-union construction company....  which was not going to fly.  

Did something suddenly change at Benesch? They told me this past summer they had no plans to extend their lease at 200 PS.

pandemic is forcing landlords to accept lower rents...  Benesch will probably renew at 200 PS for something like $33-$35/sf.  The rents at any new construction project in Cleveland are minimum $42/sf or more like $45 plus annual escalations.  Those are huge differences not to mention the buildout and relocation costs would cost millions.

32 minutes ago, gottaplan said:

pandemic is forcing landlords to accept lower rents...  Benesch will probably renew at 200 PS for something like $33-$35/sf.  The rents at any new construction project in Cleveland are minimum $42/sf or more like $45 plus annual escalations.  Those are huge differences not to mention the buildout and relocation costs would cost millions.

 

I think you're ignoring some benefits and other market factors, not to mention the fact that any new building is 2-3 years from seeing a tenant move in. The market can and probably will be very different then. But whatever. As I showed in a recent article, there are literally dozens of projects that may benefit from the TMUD tax credit. I'm reporting on it in this thread because Stark hatched it.

53 minutes ago, gottaplan said:

this project is dead.  No amount of subsidy or special TIF is going to save it.  The only saving grace that Stark had was an anchor tenant in Benesch and they are in the midst of re-signing  at 200 PS.  Without an anchor office tenant, the rest of the deal is smoke & mirrors.  Retail?  Nah.  Hotel?  Nope?  Apartments?  meh.  Don't forget also, Stark's plan was to build this with a non-union construction company....  which was not going to fly.  

 

 

well kjp has some news, but in the meantime we can play the guessing game a bit more.

 

i am going to say, as i have for quite awhile and based on what we do know -- that stark is overextended and cannot do anything now.

 

i am not going to say this project is dead. 

 

he has a prime piece of develop ready property and he'll eventually do something here when he can.

 

and benesch can re-up year by year for now -- tenents are in the drivers seat these days.

 

it's just more of the old 'nothing development-wise happens in cle very fast' type issues unfortunately.

local leaders are finally starting to understand that it no longer makes sense to subsidize a project like this, UNLESS it's luring a major employer from out of the area.  Why spend money on a project like this to pull a major tenant out of an existing building that is also critical to the City's success?  This is nothing but a shell game.  Pulling tenants from one building to put them in another.  It doesn't work.  Flats East Bank has been much closer to building a small office building on adjacent parking lot, but hasn't because tenants aren't there.  Now add in the pandemic and how many people are permanently in "work from home".....   there's just not any data to support building new developments with significant office component.   Look how many large existing office buildings are sitting empty now in downtown Cleveland.  55 PS, nearly empty and the handful of users are on month to month leases, could flee at a moment....  Tower at Erieview, pretty much the same...   45 Erieview is completely vacant now.  And then factor in how many floors are actually leased but completely unoccupied.  Cleveland market won't be in a position to build new office space for a couple years.

 

Might as well subsidize the existing office buildings to allow them to make improvements to their facilities, more energy upgrades, etc.  Still get the benefit of construction jobs and update the buildings overall for long term.  The apartment market for new construction is juuuuust about tapped out also.  

1 hour ago, KJP said:

 

I think you're ignoring some benefits and other market factors, not to mention the fact that any new building is 2-3 years from seeing a tenant move in. The market can and probably will be very different then. But whatever. As I showed in a recent article, there are literally dozens of projects that may benefit from the TMUD tax credit. I'm reporting on it in this thread because Stark hatched it.

the gap is just too large on this project - no amount of tax credits or subsidy is going to get it to a point where lenders are ready go support it.    It might sit on the shelf for a couple years and come back in some modified version again but I think there's other deals also sitting on the shelf which hold more promise than this.  Like Centennial....

You used some crappy buildings with crappy owners as your examples of why office buildings are empty. Downtown doesn't have many trophy-class office buildings except for Key Tower and Ernst & Young. Those are the two most expensive buildings downtown and also two of the most fully leased. Tenants want their names on the building. They want trophy-class finishes and technology. Downtown doesn't have many of these.  The Chagrin-Interstate 271 market does, and that's why it's doing well. There are office tenants who are outgrowing their spaces and more new tenants coming from the suburbs and other metros. I've reported on these in recent articles, especially my piece from October: https://neo-trans.blogspot.com/2020/10/cleveland-area-offices-shrinking.html

 

Frankly, I couldn't care less if nuCLEus gets built. I do care if those Gateway parking lots get built upon. And I do care if other megaprojects happen. That's why I'm closely following the TMUD tax credit bill. If another development takes nuCLEus' place and the TMUD helps make that happen, awesome.

 

BTW, my article is done. Just waiting on the vote.

 

TUESDAY, DECEMBER 8, 2020

Ohio lawmakers pass skyline-altering bill

 

Today, Ohio lawmakers passed legislation for Gov. Mike DeWine to sign into law, creating a real estate megaprojects tax credit. DeWine is expected to sign the bill, Substitute House Bill 39, creating $100 million in tax credits in each of the next two years that encourage insurance companies to invest in Transformational Mixed-Use Developments, or TMUDs.

 

Members of the Ohio House of Representatives passed Sub. SB39 by a vote of 82-1. It followed the  passage of a similar bill by the Ohio Senate earlier in the 133rd General Assembly's two-year session. The Senate voted 32-1 in July 2019 to support the bill as introduced by State Senator Kirk Schuring (R-29, Canton).

 

MORE:

https://neo-trans.blogspot.com/2020/12/ohio-lawmakers-pass-skyline-altering.html

 

Lets Goooo!!!!!!! 😁

^ hahaha yessss!

 

the overwhelming support for the bill all along in state gov is really heartening to see.

 

not sure i expected that given ohio politics these days.

11 minutes ago, NR said:

 

Lets Goooo!!!!!!! 😁

Time for Nucleus 4.0?  (I never warmed up to that Borg- like design anyway).  I think we’ll be very fortunate to see the 3.0 version - Stark still has a battle ahead - but  beyond Nucleus I’m just hoping Cleveland is the big state-wide winner.  Great news today as broken in @KJP’s story. 

2 minutes ago, CleveFan said:

Time for Nucleus 4.0?  (I never warmed up to that Borg- like design anyway).  I think we’ll be very fortunate to see the 3.0 version - Stark still has a battle ahead - but  beyond Nucleus I’m just hoping Cleveland is the big state-wide winner.  Great news today as broken in @KJP’s story. 

 

I just mainly want that size and height!!!  I don't mind the look, its unique and will mix things up, but I don't mind if they change it either.

 

It would be awesome to add this to the CLE skyline along with the SHW tower, not to mention the others that could join the list. 

 

I hope Stark(nuCLEus) is one of the TMUD winners and that he gets enough to build something the size of nuCLEus 1.0

4 hours ago, NR said:

 

 

Lets Goooo!!!!!!! 😁

 

If TMUD doesn't allow nuCLEus 4.0 to transform into the toy from Big the entire program is a failure. 

 

Edited December 9, 20204 yr by ASP1984

11 hours ago, gottaplan said:

this project is dead.  No amount of subsidy or special TIF is going to save it.  The only saving grace that Stark had was an anchor tenant in Benesch and they are in the midst of re-signing  at 200 PS.  Without an anchor office tenant, the rest of the deal is smoke & mirrors.  Retail?  Nah.  Hotel?  Nope?  Apartments?  meh.  Don't forget also, Stark's plan was to build this with a non-union construction company....  which was not going to fly.  

Well...that aged well lol

Hold off on the excitement., according to crain's it is going 

back to the Ohio Senate. I guess what the Senate signed earlier was an

earlier version.

 

The Ohio House signed off Tuesday, Dec. 8, on a bill to create a new state tax credit for "transformational" real estate projects, nearly three years after the proposal first surfaced.

Substitute Senate Bill 39 would establish a nonrefundable tax credit designed to offset premium taxes paid by insurance companies that invest in large, mixed-use developments. It's now headed back to the Senate, which approved an earlier version of the language 18 months ago.

 

9 hours ago, gottaplan said:

local leaders are finally starting to understand that it no longer makes sense to subsidize a project like this, UNLESS it's luring a major employer from out of the area.  Why spend money on a project like this to pull a major tenant out of an existing building that is also critical to the City's success?  This is nothing but a shell game.  Pulling tenants from one building to put them in another.  It doesn't work.  Flats East Bank has been much closer to building a small office building on adjacent parking lot, but hasn't because tenants aren't there.  Now add in the pandemic and how many people are permanently in "work from home".....   there's just not any data to support building new developments with significant office component.   Look how many large existing office buildings are sitting empty now in downtown Cleveland.  55 PS, nearly empty and the handful of users are on month to month leases, could flee at a moment....  Tower at Erieview, pretty much the same...   45 Erieview is completely vacant now.  And then factor in how many floors are actually leased but completely unoccupied.  Cleveland market won't be in a position to build new office space for a couple years.

 

Might as well subsidize the existing office buildings to allow them to make improvements to their facilities, more energy upgrades, etc.  Still get the benefit of construction jobs and update the buildings overall for long term.  The apartment market for new construction is juuuuust about tapped out also.  

 

Pre-pandemic, my employer was already moving towards more teleworking to reduce its office space requirements downtown.  As the work-from-home situation has gone on longer and longer, there have been overtures from management to expand teleworking.  We have been surveyed for what our teleworking plans will be once we return to the office.  Co-workers who minimally teleworked have already stated they will telework significantly more or do it to the max.  Our results and service has not suffered while nearly everybody has been working from home.  Staffing for my company will not be reduced, but our office space needs will be.  This situation is not unique and it will cause a big transformation in the business world.  

13 minutes ago, LifeLongClevelander said:

Our results and service has not suffered while nearly everybody has been working from home. 

 

 

Maybe not. But a competitor of yours may find that face-to-face collaboration spawns new ideas and energy and outplace you in the market with greater profits. Then your company may pivot and return to more people in the office. I'm not convinced yet that the office is dead and that business is 'just as good' with so many units remote than having people work in the same location.  Its way too early to see where the chips may fall as we have yet to even give the first vaccination injection in the US.

It's probably going back to the Senate because of this last-minute Shenanigans by Rep. Tom Brinkman Jr. who added the amendment about restoring a tax credit for campaign contributions. The reason he chose this bill to add his amendment to is because it has a very strong chance of becoming law.

 

Regardless, I also amended my article accordingly.

30 minutes ago, Pugu said:

 

 

Maybe not. But a competitor of yours may find that face-to-face collaboration spawns new ideas and energy and outplace you in the market with greater profits. Then your company may pivot and return to more people in the office. I'm not convinced yet that the office is dead and that business is 'just as good' with so many units remote than having people work in the same location.  Its way too early to see where the chips may fall as we have yet to even give the first vaccination injection in the US.

When face-to-face collaboration has been deemed as needed, it has happened.  Most of the time, it is not.  Conference calls and zoom meetings frequently filled the need.  Never stated that the office is dead or won't be needed.  It has already been proven in our line of business pre-pandemic that downsizing our office footprint resulted in no loss of quality or service.  It did save substantial leasing costs and the pandemic has further driven home the fact that things did not suffer. 

 

If top management saw problems with the way things were going, especially when some of the kinks had yet been worked out, they would have never started down the path of increasing teleworking when things do "return to normal".

Does anyone know whatever happened to those lease agreements they'd signed a few years back? Shake Shack, Starbucks Reserve and Hopcat had committed. Obviously time has dragged on and Shake Shack have opened elsewhere Downtown since.

Hi,

 

most of this conversation is exciting, and I love to read it, but i think TMUD's should have it's own thread

 

I wanted to create a new "Ohio Transformational Mixed-Use Development Projects" thread so we can all discuss potential projects before any are granted a TMUD credit, but I figured that @KJP should have the honor since he has been following and updating the rest of us on this bill for years.

 

Then someone can create the same topic for each of the regional construction threads and pin it so it appears at the top so we can post pics of the Cleveland projects in the other regions and brag😝.

 

Speculation aside and ignoring stipulations from any forms of financing, what codes and stipulations are actively in effect and enforceable on the Herold building, and what would Stark have to change in the design to get it too pass landmarks, design review or city council? 

 

Or, what are the building code differences between Cleveland and Columbus that allows vertical additions to historic structures there? or are those buildings not land-marked or in historic districts?

Except that we're almost done with the legislative process involving TMUD. The Senate will probably vote on SB39 today. If we want to discuss which projects could be considered TMUDs, that could probably be done in the Random Developments thread.

 

As for the Herold Building, it can get federal or state historic tax credits. Here is what I wrote about each earlier this year.....

____________________

 

the Herold was designed to accommodate only two more stories above its existing four stories, according to its historic registration. Internal structural supports would have to be added to the building. And, if historic tax credits are used, they limit how the existing building can be altered, said historic preservation consultant Steve McQuillin.

"While I don’t hate plans to add floors to the top of (the Herold Building), it’s hard to see how that will meet the (historic) standards and thereby qualify for state and federal preservation incentives," he said.

For example, a non-competitive federal historic tax credit would likely require any vertical expansion of the Herold Building to be set back from the original facade so as to not be visible from the street.

There is a post-construction review and inspection by the National Park Service. If the building is changed in any way within five years after completion so that it doesn't meet federal standards, the project could lose the tax credit.

State tax credits, which have no post-construction review and pull-back provisions, could be used instead. But they are competitive and therefore more difficult to get, McQuillin said. If the state tax credit was used to repair and renovate the Herold Building, Stark could then sell the air rights post-renovation to Huron Gateway LLC for $1 for an expansion of the Herold.

While the National Park Service reviews projects seeking federal historic tax credits, the Cleveland Landmarks Commission reviews projects seeking state historic tax credits. That's another reason why Stark may want to apply to the state even though it wouldn't be guaranteed to receive its state tax credits, McQuillin said.

@KJP...I hate to keep cross examining you on this topic but do you have a best guess as to when the first credits might be awarded.  I would imagine there is a whole bureaucratic process in order to set up the program within the appropriate government agency and then the application and award process would take some time as well.

8 hours ago, KJP said:

It's probably going back to the Senate because of this last-minute Shenanigans by Rep. Tom Brinkman Jr. who added the amendment about restoring a tax credit for campaign contributions. The reason he chose this bill to add his amendment to is because it has a very strong chance of becoming law.

 

Regardless, I also amended my article accordingly.

This is exactly why we need legislative reform.

 

Why attach a totally unrelated item to a bill that could potentially be a poison pill?

Edited December 9, 20204 yr by Frmr CLEder

30 minutes ago, Htsguy said:

@KJP...I hate to keep cross examining you on this topic but do you have a best guess as to when the first credits might be awarded.  I would imagine there is a whole bureaucratic process in order to set up the program within the appropriate government agency and then the application and award process would take some time as well.

 

No problem. I can only use my experiences with new federal rail programs and the agency rulemaking that followed the passage of legislation. As you might imagine, it would depend on the agency (Ohio Tax Credit Authority) and how busy they are with existing programs as well as new programs that the legislature has asked it to implement. So with the feds, it took anywhere from four months to a year to implement new programs. The one that I recall took nearly a year was a complex program and didn't have annualized spending amounts. In other words, the funds would go away if there were no satisfactory applications. And fhe Federal Railroad Administration first needed to hire more people to implement the program and then to administer it. And I don't recall if SB39 stipulates a turnaround time from the notice of funding available (NOFA) to the award. If there is none, they'll probably imitate similar tax credit programs (historic, multi-family low-income) and their turnaround times. I seem to recall those have three-month turnaround times, but I really don't remember. Perhaps someone else here does.

 

One thing that could expedite the process is the fact that the program has two years of credits and the current fiscal years end June 30. Actually it has three years, but the first fiscal year in the bill has already passed -- it ended June 30 -- unless this bill can issue credits retroactively. And considering it was passed by the House on emergency, it might -- if the Senate does the same. I'm checking on that.

 

BTW, Sub. SB 39 is scheduled for a concurrence vote on the Senate floor today. It is expected to pass easily unless someone else adds another stupid rider. 

 

 

38 minutes ago, KJP said:

As for the Herold Building, it can get federal or state historic tax credits. Here is what I wrote about each earlier this year.....

I know this is Stark, and unlikely, but assume that Stark doesn't apply for any tax credits, so there are none of the stipulations you mentioned, can the latest rendering of the Herold building addition be built, or are there already limits to alterations because of the historic district or some other form based code? All i can find is that it isn't breaching a height limit, and it's in a historic district, but idk if that means anything? 

 

42 minutes ago, KJP said:

Except that we're almost done with the legislative process involving TMUD. The Senate will probably vote on SB39 today. If we want to discuss which projects could be considered TMUDs, that could probably be done in the Random Developments thread.

I see, that makes sense.

9 minutes ago, WhatUp said:

I know this is Stark, and unlikely, but assume that Stark doesn't apply for any tax credits, so there are none of the stipulations you mentioned, can the latest rendering of the Herold building addition be built, or are there already limits to alterations because of the historic district or some other form based code? All i can find is that it isn't breaching a height limit, and it's in a historic district, but idk if that means anything? 

 

The only stipulation I know of is that the Landmarks Commission won't let Stark knock the Herold down. Too bad the commission didn't grow a pair before it allowed casino developer Rock Ohio Caesars et al to demolish the Stanley Block. If Stark goes for historic tax credits (especially guaranteed federal ones), it's restricted on how much it can modify the building. If Stark wants to double the height of the building, it will probably forget about the historic tax credits and rely on the TMUD credit for Herold, not just to deliver whatever nuCLEus project Stark is contemplating.

Quite frankly, if what @gottaplanwas suggesting yesterday (basically that Stark has too much of a financing gap even with the TMUD) I hope Stark doesn't even bother to apply (which would be ironic given their camp were behind the legislation).  It could possibly interfere with projects that have more promise and need the TMUD to get over the hump.

13 minutes ago, Htsguy said:

Quite frankly, if what @gottaplanwas suggesting yesterday (basically that Stark has too much of a financing gap even with the TMUD) I hope Stark doesn't even bother to apply (which would be ironic given their camp were behind the legislation).  It could possibly interfere with projects that have more promise and need the TMUD to get over the hump.

 

One great thing about the passage of time is that it reveals answers to most if not all questions. In other words, we'll see what happens.

 

1 hour ago, KJP said:

 

Maybe DeWine will line item veto that stupid rider amendment, too

1 hour ago, Boomerang_Brian said:

Maybe DeWine will line item veto that stupid rider amendment, too

I hope so!

 

I have to say, I am just so sick of the BS from these legislators.

53 minutes ago, Frmr CLEder said:

I hope so!

 

I have to say, I am just so sick of the BS from these legislators.

 

If you hate that then you will definitely hate the comment made by a downstate legislator who opposed TMUD tax credit not because of some fiscal concern but because it wouldn't benefit any districts except the urban ones.

3 hours ago, Frmr CLEder said:

I hope so!

 

I have to say, I am just so sick of the BS from these legislators.

Not to get too far off topic, but I thought Ohio's line item veto is limited to bills which appropriate/spend funds, so I'm not sure if a tax credit is eligible.  If someone who is more familiar with this wants to correct or jump in here, please do. But I do roughly remember DeWine line-itemed vetoed almost 30 items in the last state budget. 

KJP  or anybody with tech skills   -  Is there any way you can post pictures of  Nucleus 1.0, 2.0, 3.0  on

one page so we all can compare & debate  pros and cons of all three