7 minutes ago, KJP said:

I still haven't heard from the developer yet. But I've heard from others that they are over budget. Who knows, maybe they still need a TMUD after all...

Or maybe some of the principals need to put up more of their own money.  This is getting ridiculous.

Maybe they’re hoping that some of us frustrated Urban Ohio people start a gofundme for them…

I still haven't heard from the developer yet. But I've heard from others that they are over budget. Who knows, maybe they still need a TMUD after all...

Oh my lord. Maybe this is too large of a task for them. This is getting ridiculous.


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2 hours ago, MyPhoneDead said:

Oh my lord. Maybe this is too large of a task for them. This is getting ridiculous.


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They are not the only one. I was thinking about doing an article about all of the projects that aren't going to happen or are delayed because of high construction and/or financing costs.

18 minutes ago, KJP said:

 

They are not the only one. I was thinking about doing an article about all of the projects that aren't going to happen or are delayed because of high construction and/or financing costs.

That would be a great article Ken. Although probably a lot of work.

Edited July 14, 20231 yr by Htsguy

45 minutes ago, KJP said:

 

They are not the only one. I was thinking about doing an article about all of the projects that aren't going to happen or are delayed because of high construction and/or financing costs.

Interest rates are brutal. Think about how much more expensive 500 to 600 basis points is on 50+ million in debt service. The fact anything is getting built is incredible. 

5 hours ago, Htsguy said:

That would be a great article Ken. Although probably a lot of work.

 

Thanks. I have a lot of the material already.  

Oh boy. You don't want to go ahead and depress us now do you?

I can’t access Crains from my current device - I’m wondering if selling Church and State is to free up capital for Bridgeworks?

 

3 minutes ago, Boomerang_Brian said:

I can’t access Crains from my current device - I’m wondering if selling Church and State is to free up capital for Bridgeworks?

 

 

Michael Panzica states in the article that it is not related to the Bridgeworks development. He references the low interest assumable financing in place that creates additional value for the buildings. 

 

Ohio City buildings to be razed for Bridgeworks
By Ken Prendergast / August 8, 2023

 

Two historic buildings are proposed to be torn down for a 16-story, mixed-use development in Cleveland’s Ohio City neighborhood, despite information that financing, including the use of air rights, for the high-rise is still being finalized. A demolition permit application was filed Aug. 4 by LDA Architects of Cleveland for Bridgeworks LLC with the city’s Building Department following recent approvals of the demolitions by the city’s Landmarks Commission and a design review committee. But the approvals by those two panels in the City Planning Commission were made with the presumption that the overall Bridgeworks development would be carried out.

 

MORE:

https://neo-trans.blog/2023/08/08/ohio-city-buildings-to-be-razed/

So what are the current odds that this project falls through post demolition and we end up with another large surface parking lot? The continued discussion of funding gaps isn't giving me warm fuzzy feelings. 

1 minute ago, Ethan said:

So what are the current odds that this project falls through post demolition and we end up with another large surface parking lot? The continued discussion of funding gaps isn't giving me warm fuzzy feelings. 

 

According to the article the developers are paying $100k of the $300k+ it costs to demo so it ain't cheap. I might be biased because I want this project to start but I would think that's at least a sign that the developers are confident they can get the funding finalized. If they thought it was falling through I would think they wouldn't throw more money at it. I get they maybe had a timing constraint to utilize the Brownfield grant but still they had to pony up their own cash to demo.

 

Again, might be optimistic but I'm hoping the funding gap is just delaying the project and not a insurmountable gap.

Still can’t quite understand how this project didn’t get TMUD $ - if anything meets the definition of a transformative project - it’s Bridgeworks.  And Its critical location and relationship to the forthcoming Irishtown Bend Park makes it all the more strategic. 

Maybe we can help by starting a Gofunding to fill the gap lol

4 hours ago, dwolfi01 said:

 

According to the article the developers are paying $100k of the $300k+ it costs to demo so it ain't cheap. I might be biased because I want this project to start but I would think that's at least a sign that the developers are confident they can get the funding finalized. If they thought it was falling through I would think they wouldn't throw more money at it. I get they maybe had a timing constraint to utilize the Brownfield grant but still they had to pony up their own cash to demo.

 

Again, might be optimistic but I'm hoping the funding gap is just delaying the project and not a insurmountable gap.

Or like every other fund raising problem project, they demo the place, can't get funding, and then decide that plot of land would ripe for surface parking that they can get massive cash flows for decades to come. 

If they are short on funding again I'm actually over this project because I could've sworn that Cleveland gave them the remaining amount.

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5 minutes ago, MyPhoneDead said:

If they are short on funding again I'm actually over this project because I could've sworn that Cleveland gave them the remaining amount.

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The most recent public subsidy was a $2 million loan from Cuyahoga county back in June.

The most recent public subsidy was a $2 million loan from Cuyahoga county back in June.

Wasn't that the gap in funding though.

Edit: As of June they had more than enough funding according to KJP.

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1 minute ago, MyPhoneDead said:

Wasn't that the gap in funding though.

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I believe that’s what the story was.

I believe that’s what the story was.

That's the frustrating part. Back in June they had "enough funding and more" but now they have another gap. My God, they bit off more than they can chew.

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1 minute ago, MyPhoneDead said:

That's the frustrating part. Back in June they had "enough funding and more" but now they have another gap. My God, they bit off more than they can chew.

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$100k is petty cash between Michael & Graham btw. That doesn’t marry them to this happening. 

Panzica said in April they wanted to start demolition and construction in June. He made no comment on financing but the inference by their proposed actions was that they had enough to move forward. While I can't get them to comment publicly on their financing, the fact that they developed in June and submitted on June 29 the replat for an air rights parcel suggests they wanted to use that approach to finance the hotel portion of the project. I noted in the article that this is an increasingly difficult time to get credit for new projects so perhaps this air rights approach is an attempt to overcome that.

It’s been a month since the last word in this thread - with time passing, costs escalating and silence where this project is concerned - you have to wonder if we’ll ever see these beautiful renderings become reality. 
Hopefully, there’s still the will to make this happen… 

really bummed this project felt so close and still has done nothing. I walk by that corner every day and it is depressing looking at an abandoned run down overgrown lot on such a prominent corner. Especially once the eyesore across the street for Irishtown Bend gets torn down soon.

12 hours ago, CleveFan said:

It’s been a month since the last word in this thread - with time passing, costs escalating and silence where this project is concerned - you have to wonder if we’ll ever see these beautiful renderings become reality. 
Hopefully, there’s still the will to make this happen… 

Projects tend to go "silent" when they are closing out financing. Remember, when financial approvals are announced publicly, there is still a great deal of legal work to close out all of the sources. Silence is not necessarily a good or bad thing. 

In addition to the TMUD program, the county also has a new Housing Gap Financing Fund and directed to it $35 Million in ARPA funds to incentivize the development of 1,500 new affordable housing units and 1,650 new market rate housing units county-wide. Considering this used to be a county property and they have an interest in seeing this project move forward, I wouldn't be surprised if Bridgeworks LLC has already reached out to the county to inquire about funding from that new program.

17 minutes ago, KJP said:

In addition to the TMUD program, the county also has a new Housing Gap Financing Fund and directed to it $35 Million in ARPA funds to incentivize the development of 1,500 new affordable housing units and 1,650 new market rate housing units county-wide. Considering this used to be a county property and they have an interest in seeing this project move forward, I wouldn't be surprised if Bridgeworks LLC has already reached out to the county to inquire about funding from that new program.

They already have a two million dollar loan from the county and I cannot recall but I am sure there are other public subsidies.  At some point this just gets silly.

26 minutes ago, freefourur said:

Projects tend to go "silent" when they are closing out financing. Remember, when financial approvals are announced publicly, there is still a great deal of legal work to close out all of the sources. Silence is not necessarily a good or bad thing. 

This is absolutely true if they have actually closed the funding gap which still is not clear.

2 minutes ago, Htsguy said:

They already have a two million dollar loan from the county and I cannot recall but I am sure there are other public subsidies.  At some point this just gets silly.

 

A loan isn't a government handout. It the government doing the job that the private sector has failed to do. And as long as there is demand for housing (which there is) and the private sector is unable to financially support that demand, I'm grateful if the government can step in and move the growth of this city forward.

43 minutes ago, dwolfi01 said:

really bummed this project felt so close and still has done nothing. I walk by that corner every day and it is depressing looking at an abandoned run down overgrown lot on such a prominent corner. Especially once the eyesore across the street for Irishtown Bend gets torn down soon.

Is this evidence that the county is not great at selecting developers when they issue an RFP?  If this is the case does not bode well for the Justice Center RFP which is Xtimes larger.  Full disclosure...I am of the opinion that the JC RFP process is a huge joke and just further evidence of lack of leadership.  

Just now, KJP said:

 

A loan isn't a government handout. It the government doing the job that the private sector has failed to do. And as long as there is demand for housing (which there is) and the private sector is unable to financially support that demand, I'm grateful if the government can step in and move the growth of this city forward.

True...don't have a problem with government loans but there are only so many they can make.  Is this loan taking money away from other more viable projects?

1 minute ago, Htsguy said:

True...don't have a problem with government loans but there are only so many they can make.  Is this loan taking money away from other more viable projects?

 

How do you define what is more viable? And if another project is more viable, why would it need government assistance?

2 minutes ago, KJP said:

 

How do you define what is more viable? And if another project is more viable, why would it need government assistance?

That is for the geniuses doling out the money to decide.  

Correct me if I'm wrong, but would rebranding to condos versus apartments allow them to get better financing on the construction based upon the projected sales prices of the units?

This funding issue of theirs is becoming a joke. At this point they should consider walking away and selling the lot to someone else.

4 minutes ago, YABO713 said:

Correct me if I'm wrong, but would rebranding to condos versus apartments allow them to get better financing on the construction based upon the projected sales prices of the units?

I'm not sure pre-sale requirements could be met to close on the loan given the current interest rates.

16 minutes ago, GREGinPARMA said:

This funding issue of theirs is becoming a joke. At this point they should consider walking away and selling the lot to someone else.

 

The development team leading this project is top notch. Until the pandemic, the Cleveland market was already marginal for large, new developments to get off the ground. The recent increases in construction costs, material costs, reductions in available material and staffing, and higher interest rates have made it difficult if not impossible for new projects to move forward, absent large subsidies. I know we want projects to sprout out of the ground like so many weeds. But we don't live in that city or in that time frame.

Man, this thread really brings out strong opinions from people who have no idea what it takes to get a project done.

9 minutes ago, w28th said:

Man, this thread really brings out strong opinions from people who have no idea what it takes to get a project done.

Building the capital stacks often takes longer than actual construction. These deals get complex and all lenders involved have their own sets of attorneys and legal requirements. As I stated above, just because something is "quiet" doesn't mean that a deal is dead or that nothing is happening. 

 
A loan isn't a government handout. It the government doing the job that the private sector has failed to do. And as long as there is demand for housing (which there is) and the private sector is unable to financially support that demand, I'm grateful if the government can step in and move the growth of this city forward.

In my opinion, government loans are handouts, particularly when they're given to a developer, when their neighbor does not or did not get such assistance.

There will always be a demand for housing, but in my opinion, if that demand hasn't been met by the private sector, I don't necessarily see that as the private sector having "failed", therefore government loans. To me, it means the private sector saw better value investing elsewhere, considering the current environment. I think it's fair to ask where this government loan could otherwise be.

I really am excited about this project, however.@KJP, I look forward to your reporting on this eventually getting built!

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Pretty sure St Malachi’s (their neighbor) gets plenty of government funding. And across the street is Irish town bend, also publicly funded. 

I wonder if the setback requirements years back w/Landmarks put enough of a pause on this to create these current funding issues. If they didn't have to redesign would they be building now? I doubt it, but just a musing. Not getting TMUD was probably more detrimental than anything.

Edited September 8, 20231 yr by GISguy

14 minutes ago, Milkshake1 said:

In my opinion, government loans are handouts, particularly when they're given to a developer, when their neighbor does not or did not get such assistance.

There will always be a demand for housing, but in my opinion, if that demand hasn't been met by the private sector, I don't necessarily see that as the private sector having "failed", therefore government loans. To me, it means the private sector saw better value investing elsewhere, considering the current environment. I think it's fair to ask where this government loan could otherwise be.

I really am excited about this project, however.@KJP, I look forward to your reporting on this eventually getting built!

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The bolded part is based on an assumption that the public entity doesn't have any other money available for other projects. This is not the case with loans. Public entities that do lending have revolving loan funds. Repayments are added to a pool of funds that are available for projects. Both Cuyahoga County and Cleveland have plenty of money to go around for projects. 

Banks aren't giving loans to real estate developments in Cleveland, unless you're a Fortune 1000 company. Governments typically get paid back from the loans they make. I know Cleveland's former development director says the default rate is too high but I'd like to see that in a context.

50 minutes ago, KJP said:

Banks aren't giving loans to real estate developments in Cleveland, unless you're a Fortune 1000 company. Governments typically get paid back from the loans they make. I know Cleveland's former development director says the default rate is too high but I'd like to see that in a context.

Banks are lending on real estate deals. But generally only at about 70% loan to value max. Therefore other sources are needed to fill the gaps. 

There hasn’t been a more worthy project for TMUD $ than Bridgeworks IMO - it is the definition of what TMUD was supposed to be about.  How many projects in Cleveland since TMUD began have actually commenced?  

I’m asking (not making a point). 
 

^Cross Country.

And Circle Square, although the portion that would benefit most from it -- the retail/parking podium for the hotel -- hasn't started yet.

 

And while I'm sure there are banks giving loans to some real estate developments, we're increasingly seeing the city/port authority taking on this role through TIFs. Bridgeworks is an example. So is Stokes West. 

9 minutes ago, CleveFan said:

There hasn’t been a more worthy project for TMUD $ than Bridgeworks IMO - it is the definition of what TMUD was supposed to be about.  How many projects in Cleveland since TMUD began have actually commenced?  

I’m asking (not making a point). 
 

being a worthy project can be double edged sword. being able to get financing together shows the state that maybe the TMUD is not needed. It's always a balance act with subsidies.