7 minutes ago, Mendo said:

 

 

Paragraphs in news articles are usually one or two sentences so that rule of thumb is kind of weird. Either way, I removed a bit.

I think that may be part of the reason they make those paragraphs so short! We’ve got @KJP’s article with all the details now anyway. 

At one point the Hotel component was removed. Glad to see it back. Anyone know the flag? Or I am wondering if it could be a part of their hospitality unit. They just might bring a management company on board.

I can't believe they got the full amount. This really will be transformative in a way Bridgeworks and the W were not, and while I wish those projects could have gotten something, hopefully this will not kill them. The Centennial really will change downtown in a big way and hopefully spur more retail and investment extending all around Euclid and 9th.

It’s fun to think about the impact 800 additional units will have on the commercial property market downtown. With Sherwin Williams already prompting surrounding investments, this is surely more positive momentum.


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47 minutes ago, ASP1984 said:

It’s fun to think about the impact 800 additional units will have on the commercial property market downtown. With Sherwin Williams already prompting surrounding investments, this is surely more positive momentum.


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And it's a different residential market that's being pursued -- workforce housing. Should be able to attract some basic, essentials-for-living retailers in the lower levels of The Centennial with that, plus the 300 units in the City Club Apartments. That's nearly 1,200 units or roughly 1,500-1,600 people added to the Euclid-East 9th intersection. As someone at DCA noted on Twitter, adding in recent redevelopments at Euclid Grand, The Athlon, Schofield, and The 9 complex brings the total to over 1,800 units within just two blocks, or some 2,400 residents.

Can someone check my math?

 

So, the project is ~$465M, it's received $40M in TMUD, $25M in preservation credits, and will receive low income housing tax credits. Those are a bit harder to compute, but this site indicates it's usually ~9% of the construction cost which would be $41.85M: https://www.taxpolicycenter.org/briefing-book/what-low-income-housing-tax-credit-and-how-does-it-work.

 

So all together, this project is receiving $106.85M in tax credits, 23% of the total cost? Is that really what it takes to get low income housing into the market?

 

An old Crain's article from Sep 2020 says units would start around $855-$1100, accounting for the last 18 months of rent increases does that put them around $950-1300ish? That's cheaper than the "luxury" units around that start around $1200ish, but isn't really all that cheap all things considered.

^It is very challenging to estimate the subsidy to a project like this without seeing the actual numbers. A couple comments however:

 

- The LIHTC credit would only apply to the low-income housing portion of the project, not the entire project cost. And the 9% is really 9% over 10 years.

- The historic credit of $25 million is only the state credit. There is also a 20% federal historic tax credit, equally 20% of the qualified rehabilitation expenditures, which is going to be less than the total project cost.

- Tax credits end up providing something in the ballpark of 65-95% of their full value to the project when they are syndicated.

 

 

29 minutes ago, dastler said:

Can someone check my math?

 

So, the project is ~$465M, it's received $40M in TMUD, $25M in preservation credits, and will receive low income housing tax credits. Those are a bit harder to compute, but this site indicates it's usually ~9% of the construction cost which would be $41.85M: https://www.taxpolicycenter.org/briefing-book/what-low-income-housing-tax-credit-and-how-does-it-work.

 

So all together, this project is receiving $106.85M in tax credits, 23% of the total cost? Is that really what it takes to get low income housing into the market?

 

An old Crain's article from Sep 2020 says units would start around $855-$1100, accounting for the last 18 months of rent increases does that put them around $950-1300ish? That's cheaper than the "luxury" units around that start around $1200ish, but isn't really all that cheap all things considered.

Yes it is. This is a huge building, I think the largest, or second largest in downtown. It clearly is not going to be cheap to renovate it from 1920s vintage office to modern apartments, office and retail. 

 

Not having the credits, but still having "low" income housing likely doesn't pencil in the Proforma, which would require all units to be market rate.

Plus it's getting tax abatement and other incentives from the City, I believe.

4 minutes ago, ink said:

^It is very challenging to estimate the subsidy to a project like this without seeing the actual numbers. A couple comments however:

 

- The LIHTC credit would only apply to the low-income housing portion of the project, not the entire project cost. And the 9% is really 9% over 10 years.

- The historic credit of $25 million is only the state credit. There is also a 20% federal historic tax credit, equally 20% of the qualified rehabilitation expenditures, which is going to be less than the total project cost.

- Tax credits end up providing something in the ballpark of 65-95% of their full value to the project when they are syndicated.

 

 

I think the last point is key. Getting awarded $40 mil in credits is much different than getting awarded $40 mil.

Is "workforce housing" the same as "low-income housing"?

1 minute ago, LibertyBlvd said:

Is "workforce housing" the same as "low-income housing"?

Yes.  But it sounds nicer doesn't it?

3 minutes ago, LibertyBlvd said:

Is "workforce housing" the same as "low-income housing"?

 

"Low-income housing" isn't always the same as "low-income housing", as it can range from lightly subsidized, but far from cheap rents in a mostly market rate housing project like this, to LIHTC lease-purchase homes aimed at moderate income families, to project based section 8, where people may be paying based on a % of their income that may add up to very little actual dollars of rent paid.

1 minute ago, X said:

 

"Low-income housing" isn't always the same as "low-income housing", as it can range from lightly subsidized, but far from cheap rents in a mostly market rate housing project like this, to LIHTC lease-purchase homes aimed at moderate income families, to project based section 8, where people may be paying based on a % of their income that may add up to very little actual dollars of rent paid.

 

Exactly -- it depends if we are speaking about lower income housing generally or specifically about LIHTC.  LIHTC has specific income cutoffs depending on the credit but is usually 50-60% AMI.  Workforce housing is a more general term typically referring to housing at rents that individuals earning around AMI can afford (often 80-120% AMI).

Millennia provided this response on LinkedIn when asked where the potential rents might start. It'll be great to add new housing options at a lower price point than what most current Downtown apartment buildings offer, especially one of this location and grandeur.

 

I know a lot of people around my age (mid 20s) that are earlier on in careers and want to live downtown but can't quite afford it/justify the numbers - and developments like this will give them the opportunity to do so.

 

The Centennial will be appealing to a wide range of people of all ages and demographics, which is awesome. 

1 hour ago, dastler said:

…So all together, this project is receiving $106.85M in tax credits, 23% of the total cost? Is that really what it takes to get low income housing into the market?

 

An old Crain's article from Sep 2020 says units would start around $855-$1100, accounting for the last 18 months of rent increases does that put them around $950-1300ish? That's cheaper than the "luxury" units around that start around $1200ish, but isn't really all that cheap all things considered.

I think it’s important to keep in mind that new apartments generally are NOT cheap. It would be unreasonable to expect them to be - without a profit incentive, no one would build new housing. Rather, the benefit of adding new housing is to add enough supply that there is downward pricing pressure on existing older units. The older units in other buildings along Euclid, in the Warehouse District, and the 9-12 district have to lower their prices to get tenants. People who would otherwise be priced out of downtown can afford these now less expensive older units, and every aspect of downtown benefits from having more residents. 
 

All that said, this project is different because of the stated Workforce housing goals. It provides an even larger benefit on all the benefits I described above. 

Apartments being in the $900-1300 range, (adjusting for 2 years of inflation since the original 2020 Crain’s article) in a legacy building in a desirable  major American downtown neighborhood (one that will have a stunning facade, lobby and I’m certain top shelf amenities) is what I would argue is “cheap” (indelicate word to use) by the standards of the year 2022. 
 

Ok, this is the take of someone who has lived in the NY area for some time - but I’m in Cleveland often, have family there still and remain very familiar with local norms and the socio-economic differences between the markets. 
 

This is not just going to be some typical “workforce” apartment building.  It’s a wonderful opportunity for working class folks to live near the best luxury offerings of downtown in a truly beautiful building.

And at the price range we’re talking about- I think you’d  be hard pressed to find many similar opportunities  in any major American major city.  Proud to have this project in Cleveland. 

Wages are up a lot too. If you make $15/hr and work a wee bit of overtime, $900/mo is 30% of your income. I know $15 isn't really the minimum wage, but it's a lot more common now as a de facto minimum wage at many companies. I've seen lots of fast food joints around here offering $18/hr or more to start for certain shifts. And there are lots of warehouse jobs paying over $20 per hour to start. Those jobs are a lot easier to get than they were ten years ago.

 

$1300/mo would be 30% of your income if you make $52,000 a year. That's $4,000 less than the median household income for Ohio.

 

Point being, I think $900-1300/mo certainly qualifies as workforce housing. $700/mo. certainly certainly does.

41 minutes ago, LlamaLawyer said:

Wages are up a lot too. If you make $15/hr and work a wee bit of overtime, $900/mo is 30% of your income. I know $15 isn't really the minimum wage, but it's a lot more common now as a de facto minimum wage at many companies. I've seen lots of fast food joints around here offering $18/hr or more to start for certain shifts. And there are lots of warehouse jobs paying over $20 per hour to start. Those jobs are a lot easier to get than they were ten years ago.

 

$1300/mo would be 30% of your income if you make $52,000 a year. That's $4,000 less than the median household income for Ohio.

 

Point being, I think $900-1300/mo certainly qualifies as workforce housing. $700/mo. certainly certainly does.

$1,300 would be 30% of your pre-tax income if you gross $52k. $900 is closer to 30% of take home pay.

1 hour ago, bumsquare said:

$1,300 would be 30% of your pre-tax income if you gross $52k. $900 is closer to 30% of take home pay.

I believe apartments usually base rent % on gross income not post-tax/deductions. So it would not surprise me if they were $1300/mo

Keep in mind that LIHTC caps rents but also eligibility.  Current income limits (gross income) at 60% of AMI in CLE are:

1 person: $33,060

2 person: $37,740

3 person: $42,480

 

Annual rents would capped at 30% of income cap, less a utility allowan nce (with imputed occupancy by unit type of studio = 1 person HH; 1 BR = 1.5 person HH (avging 1 and 2 person HH); 2BR = 3 person HH).

 

So a 1BR would have a max rent right now of $885, minus whatever formula utility allowance (ie, estimate of tenant-paid utilities).  Given income trends and inflation, seems likely this is going to increase a bit before the units are placed in service.

 

ADDENDUM: on the other hand, depending on the availability of unregulated units with comparable rents, the developer (on their own accord or as required by a mortgage lender) may charge rents lower than the regulated cap to ensure there's enough of a "marketing window". Not many people are going to go through the administrative hassle of certifying their income annually if they can rent an unregulated unit at the same price. 

Edited March 4, 20223 yr by StapHanger

With over 1,000 people from all walks of life under one roof, this is truly a city within a city and probably the biggest step towards a sustainable downtown population this century (and that's actually saying a lot, considering where we started).  And don't forget that there's a Heinen's right across the street and the Health Line going down Euclid Ave.  If a resident in this building worked, say, downtown or in University Circle, they could literally live without a car in DT Cleveland (there's always Uber and Lyft to cover the odd errand or two).  Eating out would be expensive right now, but maybe this development will prompt the Chipotles or Applebee's (don't laugh, it's part of the ecosystem) of the world to set up shop in the CBD.  Truly exciting news.  

 

Yet another promising aspect of this project is all the zombie office space it takes off the market.  Between this building and the AT&T building further north on 9th Street, that's a lot of empty commercial square footage coming off the market.  There won't be many empty buildings in downtown Cleveland by the end of this year, which is pretty incredible considering the COVID- induced headwinds of the last 24 months.

Edited March 4, 20223 yr by Down_with_Ctown

2 hours ago, Down_with_Ctown said:

With over 1,000 people from all walks of life under one roof, this is truly a city within a city and probably the biggest step towards a sustainable downtown population this century (and that's actually saying a lot, considering where we started).  And don't forget that there's a Heinen's right across the street and the Health Line going down Euclid Ave.  If a resident in this building worked, say, downtown or in University Circle, they could literally live without a car in DT Cleveland (there's always Uber and Lyft to cover the odd errand or two).  Eating out would be expensive right now, but maybe this development will prompt the Chipotles or Applebee's (don't laugh, it's part of the ecosystem) of the world to set up shop in the CBD.  Truly exciting news.  

 

Yet another promising aspect of this project is all the zombie office space it takes off the market.  Between this building and the AT&T building further north on 9th Street, that's a lot of empty commercial square footage coming off the market.  There won't be many empty buildings in downtown Cleveland by the end of this year, which is pretty incredible considering the COVID- induced headwinds of the last 24 months.

There's already a chipotle, a taco bell, and frankly other cheaper fast casual spots like a two minute walk east. 

 

Heating Up: 3 big downtown reno projects to start

By Ken Prendergast / June 19, 2022

 

This summer, renovations to a trio of large, former office buildings in downtown Cleveland are due to get underway that will convert their combined 2+ million square feet into mixed uses that will add 1,671 housing units, Class A office and co-working spaces, plus unique restaurant, retail and residential amenities. Total investment is projected to be $687 million for all three projects — The Centennial, 45 Erieview and The Rockefeller Building.

 

MORE:

https://neo-trans.blog/2022/06/19/heating-up-3-big-downtown-reno-projects-to-start/

 

32 minutes ago, KJP said:

 

Heating Up: 3 big downtown reno projects to start

By Ken Prendergast / June 19, 2022

 

This summer, renovations to a trio of large, former office buildings in downtown Cleveland are due to get underway that will convert their combined 2+ million square feet into mixed uses that will add 1,671 housing units, Class A office and co-working spaces, plus unique restaurant, retail and residential amenities. Total investment is projected to be $687 million for all three projects — The Centennial, 45 Erieview and The Rockefeller Building.

 

MORE:

https://neo-trans.blog/2022/06/19/heating-up-3-big-downtown-reno-projects-to-start/

 

Boom!  Christmas come early!

46 minutes ago, KJP said:

 

Heating Up: 3 big downtown reno projects to start

By Ken Prendergast / June 19, 2022

 

This summer, renovations to a trio of large, former office buildings in downtown Cleveland are due to get underway that will convert their combined 2+ million square feet into mixed uses that will add 1,671 housing units, Class A office and co-working spaces, plus unique restaurant, retail and residential amenities. Total investment is projected to be $687 million for all three projects — The Centennial, 45 Erieview and The Rockefeller Building.

 

MORE:

https://neo-trans.blog/2022/06/19/heating-up-3-big-downtown-reno-projects-to-start/

 

Excellent news! Question: do we know yet what the income brackets/caps will be for the lower-income residential units? 

Just think— These three projects will increase downtown’s population by 10%.

43 minutes ago, LlamaLawyer said:

Just think— These three projects will increase downtown’s population by 10%.

And that’s not even including the other projects going on around downtown. We’re inching closer to 30,000… maybe one of these mixed-use renovations can house a City Target when the time comes?

 

Also, I thought it was interesting that Ken’s article mentioned this and several other projects getting the green light because of Sherwin-Williams’ new HQ. Makes sense and it goes to show how pivotal them staying in Cleveland (and downtown) was. 

It depends if you really believe there are 20K living downtown.  The census has downtown at above 12k.  Given the lack of pedestrian foot traffic, I tend to believe 12K living downtown.  This will help get us closer to 20k.  

17 minutes ago, newyorker said:

It depends if you really believe there are 20K living downtown.  The census has downtown at above 12k.  Given the lack of pedestrian foot traffic, I tend to believe 12K living downtown.  This will help get us closer to 20k.  

There are well over 16k people currently  living downtown. The lack of pedestrian traffic is mostly due to the ~40% reduction in office staff as remote/hybrid work is still happening. 
 

 

1 hour ago, newyorker said:

It depends if you really believe there are 20K living downtown.  The census has downtown at above 12k.  Given the lack of pedestrian foot traffic, I tend to believe 12K living downtown.  This will help get us closer to 20k.  

 I'll keep it brief to avoid getting off topic, but the census defines downtown differently from the Downtown Cleveland Alliance.

What’s the specific difference? 

2 minutes ago, CleveFan said:

What’s the specific difference? 

I believe that DCA includes West Bank/ Stonebridge, and some additional geography 

21 minutes ago, freefourur said:

I believe that DCA includes West Bank/ Stonebridge, and some additional geography 

 

And east of the Inner Belt to East 30th all the way down to Broadway.

 

Anyway... I was starting to get worried about The Centennial until I heard this weekend (by a couple of surprise visitors at the UO meetup) about their financing and groundbreaking. Things were way to quiet about the project before then, including no responses from official sources.

24 minutes ago, freefourur said:

I believe that DCA includes West Bank/ Stonebridge, and some additional geography 

I also believe that DCA counts anyone who has residence downtown even if it is not their primary residence. So someone who has an apartment downtown that they use a few times a month would be counted by DCA and not by the census. Same goes with the snowbirds who list Florida as their primary residence.

42 minutes ago, cle_guy90 said:

I also believe that DCA counts anyone who has residence downtown even if it is not their primary residence. So someone who has an apartment downtown that they use a few times a month would be counted by DCA and not by the census. Same goes with the snowbirds who list Florida as their primary residence.

In some of the higher-end buildings downtown there’s a lot of folk whose primary residence is elsewhere. I know someone who pays well over $5k a month for a Cleveland apartment and uses it for 2-3 months of the year. 

6 hours ago, KJP said:

 

And east of the Inner Belt to East 30th all the way down to Broadway.

 

Anyway... I was starting to get worried about The Centennial until I heard this weekend (by a couple of surprise visitors at the UO meetup) about their financing and groundbreaking. Things were way to quiet about the project before then, including no responses from official sources.

I hope the meetup went well. Who were the surprise visitors? 

Centennial now to start construction in early 2023. It was earlier reported that they would start construction by August/September 2022.

https://www.crainscleveland.com/real-estate/nuovore-developer-tied-walton-family-details-plans-downtown-cleveland-hotel

^ I saw this article earlier. 
Good news - it’s happening

Surprising news - it won’t finish until 2027!

Wow, five years to complete the project? 

4 minutes ago, roman totale XVII said:

^ I saw this article earlier. 
Good news - it’s happening

Surprising news - it won’t finish until 2027!

 

4 minutes ago, CleveFan said:

Wow, five years to complete the project? 

Weren't they planning on doing it in Phases?  In other words 2027 might be the date for the completion of the entire project but portions of the building may open sooner.  At least that is what I recall.  Things might have changed.

I have been skeptical of this project and this developer for a couple of years now. Especially when it was awarded the tmud money.  Project start early 2023, ok we shall see but i'm not holding my breath. In the meantime projects just as worthy and important as this one like Bridgeworks and Erieview are trying to resubmit to tmud. Here is a good bet that BW breaks ground before 925. 

2 hours ago, freethink said:

I have been skeptical of this project and this developer for a couple of years now. Especially when it was awarded the tmud money.  Project start early 2023, ok we shall see but i'm not holding my breath. In the meantime projects just as worthy and important as this one like Bridgeworks and Erieview are trying to resubmit to tmud. Here is a good bet that BW breaks ground before 925. 

 

With a 4+ year completion date I bet we see Intro 2.0 finished before this 🤣

 

I admittedly don't know much about construction but I find it funny SW can build a whole new skyscraper in less time than it will take this rehab project to finish somehow. And for less money!!

 

I haven't looked closely at this project so I'm sure there's good reason it just looks funny at face value.

Edited September 9, 20222 yr by dwolfi01

11 hours ago, Htsguy said:

 

Weren't they planning on doing it in Phases?  In other words 2027 might be the date for the completion of the entire project but portions of the building may open sooner.  At least that is what I recall.  Things might have changed.

 

They wanted to avoid doing it in phases because it would result in the duplication of costs. But let's be real. A building of this size could mean crews working their way from floor to floor. Or a group of floors to a group of floors. Or a group of uses to a group of uses. The sooner they can get parts of the building ready for tenants, the sooner the property can start earning revenue.

On 9/9/2022 at 1:00 AM, dwolfi01 said:

 

With a 4+ year completion date I bet we see Intro 2.0 finished before this 🤣

 

I admittedly don't know much about construction but I find it funny SW can build a whole new skyscraper in less time than it will take this rehab project to finish somehow. And for less money!!

 

I haven't looked closely at this project so I'm sure there's good reason it just looks funny at face value.

Building from the ground up is always easier than renovating a building, whether it's a food kiosk at the mall, or a 1.5 million Square foot century old building you're renovating.

 

They have 1.5 million Square feet of demolition and asbestos abatement, which will easily take a year. There's also the whole drawing and building permit process. Then they can start to build all 1.5 million square feet back.

 

Another step closer…

 

Quote

Millennia now hopes to close on its financing and start construction in the late second quarter or early third quarter of 2023.

 

Not complaining at all but they won TMUD back in March of last year which I thought went to projects that were "shovel ready" and basically just needed to close a funding gap. And now this project got $40M in TMUD almost a year ago and is still working on more funding? And it'll be 1.5 years since the TMUD award at the earliest they'll start.

 

Ok enough complaining from me I'm just still bitter Bridgeworks missed out on TMUD twice already lol. In reality, I'm still happy to see a huge downtown project continue to move forward that will add a ton more population to downtown which I look forward to. This will help liven up downtown even more so I'm still all about this. Just wish it was happening quicker.

This project will be transformative. But we went from first quarter to second quarter to third quarter... so I feel your pain haha. Will they start before the end of 2023? I can only imagine the financial complexities of this project and have faith that Millenia will get this done. But I am getting real impatient. 

As anxious as we all are for this conversion to get started l think we have to cut the developer some slack. Other than trying to figure out what to do with the Tower City complex this building has to be the most difficult to pull off. It has a massive footprint that will ensure multiple users (residential along with maybe a boutique hotel, some kind of creative use of that fantastic lobby and perhaps a little retail. Through in possible office space and you've run the gamut of potential uses. That can't be easy and it won't come cheap. 

 

No guarantee it works either and l don't see anyone else waiting in the wings to take over if it fails. At the moment it's Centennial or bust. This building is too important, the location too critical to fail. So let's give Millenial a break and hope they can eventually pull this off.

Just remember how long it took for the CAC and Euclid Grand projects to finally get it together (and I believe the EG had tax credits early on which they almost lost due to the delays).  And Centennial has to be twice as complex.

Crains is reporting this as a $520m project.  Any developer can build or upgrade 400 affordable apartments for less than a tenth of that cost, and residents will get far more amenities than at the Centennial.  No offense to the goods folks at Millennia, but this project does not pencil out.