^I would not be a happy camper if I owned on condo in the tower and the rest of the project was developed as rental units no matter what the market or need.  In fact I could imagine a few lawsuits if that happens.

 

Not unlikely, but there's no sense throwing good money after bad.  Is it really preferable to live in an unfinished structure on a half empty block?  Are condos and apartments strictly segregated in other cities?  We're talking about the downtown of a major urban center... having no renters nearby is probably an unreasonable expectation.  If they were promised otherwise, maybe they have a case and maybe they don't.  It's not like this would be changing the character of that building, we're talking about additional buildings.  And I'm guessing the individual sale agreements didn't stipulate restrictions on the entire block.  This isn't exactly a gated cul-de-sac.   

 

I agree with Htsguy.  Once a building, that is majority unoccupied, built a marketed as luxury condos, starts to rent units as apartments, all the things promised in your contract when you bought your home go right out the window.  Nobody want to buy a condo in a building that has renters that pay the developer.  In addition the Condo board most likely has stipulations against renter.  However, this building probably doesnt have enough occupants to have a full board yet.

 

Now if TAD built a second building as luxury rentals that would a different story.

 

I mean I was against renters in MC.  75% of the people outright own their unit.  So renters dont really affect the value of our units as they would a brand new building as we've been condo for a long time and only x number (i can't remember that number) of units can be rentals for x amount of time.  Now we have some renters, but the rents are so high they are paying the condo fees.

 

Another example is my BFF in his Co-Op he can no longer have renter.  When his partner bought him an apartment downtown, he went before the board to ask for permission to rent his apartment as he didnt want to sell it.  Lawyers  went through all their agreements and he had to gain board approval and the renter had to be approved by the board.  It took 4 months just to gain approval.  Then another 2 months to get a renter.  They could only rent for one year, then he'd have to reapply to do that all over again.  They were in the building for 3 years, the max he could have a renter occupy his unit.  Now it's vacant and its back on the market. Condos and coops do not want renters.

 

If I lived in TAD and renters moved in I would sue.  I'm sure this problem with sales has to do with the credit situation world wide not the product offered.

Not saying the existing building should convert to rentals.  On that we agree.  I'm saying future additions should be rentals.  The condos and townhouses would probably sell better in a completed development full of people.  Right now the St. Clair block smells of failure and that's not good for anybody. 

 

I do not think the problem here is credit and credit alone.  The business model of forcing people to mortgage their way into downtown-- not just in the AD but overall-- needs to be reexamined.  Potential renters are being turned away from downtown left and right, even in this economy.  Meanwhile condos sit empty.  There's plenty of demand but that demand is not for 30 year commitments.

^Agreed.  The current building at 12th and St Clair was built as condos, and should remain condos.  But as we have found, there is a market for new construction of apartments downtown which has not been met.  Here is a project which could meet that demand with the construction of the new buildings; not the already built condo tower. 

^Agreed. The current building at 12th and St Clair was built as condos, and should remain condos. But as we have found, there is a market for new construction of apartments downtown which has not been met. Here is a project which could meet that demand with the construction of the new buildings; not the already built condo tower.

 

I definitely agree.  The current building should remain on the market as condos, and if a developer (any developer) has a shot at building the adjoining buildings as upscale apartments, it should be done.  As far as the townhomes vs. the condos and getting a loan for either, the loan regulations for a townhome are actually more akin to a regular house than those for condos, so getting a loan for a townhome is much easier.  Also, people should remember that this is an expensive building built with post-tensioned concrete instead of steel.  The construction is magnificent and solid and makes for great sound privacy, but it is expensive, which results in a higher price per square foot than comparable units in other buildings.  This forces a lot of people (like us) from even considering one of the condos. 

^Agreed. The current building at 12th and St Clair was built as condos, and should remain condos. But as we have found, there is a market for new construction of apartments downtown which has not been met. Here is a project which could meet that demand with the construction of the new buildings; not the already built condo tower.

 

I definitely agree. The current building should remain on the market as condos, and if a developer (any developer) has a shot at building the adjoining buildings as upscale apartments, it should be done. As far as the townhomes vs. the condos and getting a loan for either, the loan regulations for a townhome are actually more akin to a regular house than those for condos, so getting a loan for a townhome is much easier. Also, people should remember that this is an expensive building built with post-tensioned concrete instead of steel. The construction is magnificent and solid and makes for great sound privacy, but it is expensive, which results in a higher price per square foot than comparable units in other buildings. This forces a lot of people (like us) from even considering one of the condos.

 

Yes it really is probably the most expensive building in Cleveland (per sq. ft) (except for maybe the Park building), as cheap as we thought everything is in Cleveland, we looked at this building and with the fees, it was nearly on par with prices in DC. 

 

we looked at this building and with the fees, it was nearly on par with prices in DC.

 

Can't imagine why it's not selling.

And when you figure in the people that have bought (expecting to be part of something larger) thought it would make it a desireable place to buy, but given the current and unforseeable state of incompleteness, I dont see people rushing to purchase the remaining units (especially given the steep prices). 

Hopefully, that doesnt end up being the case, and credit eases up, and enough people appreciate the expensive construction methods....... 

What is the price per sq ft?

What is the price per sq ft?

 

It's not incredibly easy to compare given that the condo prices go up as you go to higher floors, but if you compare the absolute cheapest condo (2nd floor) with the cheapest townhome, it's $265/sq ft for the cheapest condo (1 bed, 1 bath) vs. $190/sq ft for the cheapest townhome (2 bed, 2.5 bath).  If you look at that same condo on the 8th floor, it's $389/sq ft.

I've mentioned this before but apparently this hasn't been absorbed.  Regardless if people think this is "super expensive" or a bad location, or whatever... The fact remains that this building was selling extremely well.  27 of the 52 units in this building were sold before they even broke ground on the project, so... there most certainly is a market for this place.  They weren't trying to bring in the young professional just out of school, or college renters.  This is an upscale luxury condominium building at the top of the market similar to the pinnacle building (which sold very well).  Pre sales indicated this would do quite well.  I have actually heard at one point they sold the building twice over, basically as some people backed out for various reasons others signed on. Then of course there was the water pipe incident that caused litigation which allowed people to back out of their loans.  I honestly don't know how many units are occupied right now, but I am guessing it is less than half.  Now factor in that current lending regulations from fannie and freddie make it borderline impossible at the moment to obtain a condominium loan, particuarly in buildings that are less than half full.  This is not an Avenue District thing.  This is a housing regulation thing which is part of the broader economic meltdown that the entire world is facing.  Those comments really are not even debatable, that is the reality of the situation.  Zremba, being primarily a for sale developer, has certainly taken one on the chin with the way the entire condo market has been hit... and AGAIN, not just the Avenue District, the ENTIRE condo market.

 

And as Doc Broc points out, getting loans for townhomes is SIGNIFICANTLY easier at the moment which is why you are seeing more movement in that area.  Bottom line, I wouldn't expect to see any new buildings on this site any time soon, until first buyer regulations stop treating condo loans like the plague, and further the credit markets ease up and money starts appearing for builders in projects like this.  And unless zremba is forced to sell this project I can not imagine why they possible would, they would lose their shirt in what they would have to take for it right now.

I 100% agree with the Mayor!

 

This building is not expensive.  and just like the pinnacle, I see this selling to 88% success target.

I 100% agree with the Mayor!

 

This building is not expensive. and just like the pinnacle, I see this selling to 88% success target.

 

I am most certainly of the persuasion of better construction over square footage, and I know there are a lot of other people out there too.  I would love to own one of those units cause they are friggin' rock solid.  But McCleveland is right - this building is not for too many young first-time buyers as it prices most people out of anything but a 1 bedroom.  With attracting an older crowd, most of those people own homes, which means they need to sell their existing home.  This has also been a huge contributing problem to the condos.

 

As to how full the building is, I have personally only met people who live in three of the units (and they are all lovely people, by the way).  I know there are at least a handful more in the building, but I don't know how many.  And there are also still many units on hold by people who can't sell their existing properties.

 

 

By the way... I still can't figure out why anyone would complain about for sale housing downtown.  Almost ALL of downtown is rental units.  I mean there are 47 residential buildings listed in downtown proper.  Only 14 are for sale, 3 of which are partial rentals partial for sale. To further break that down, most for sale buildings are significantly smaller than those of rentals.  So out of the aproximately 5,005 "units" available downtown.  4,331 of those are rentals as opposed to 674 for sale.  That is EIGHTY SIX PERCENT rental units downtown.  So let us please stop with the cry that all we do is build condos.  Some people would like to buy homes.  Some people have money and can afford more expensive places. Some people can rent more expensive places, and some people need entry level rental prices.  There is a mix of all such places here, and price... like every other city on the planet is determined by the quality of the unit and its location in downtown. 

Good points on the financing McCleveland, and it sounds like condo regulations could use some cleanup.  Bottom line is I love this building and I hope it can fill up soon.  I'm glad Zaremba took the chance on building it and I wish things had worked out better for them so far.  I do think part of the problem is the business model, but that's crying over spilt milk at this point.  What's done is done.  Every market needs a high end and here's ours.  Now, if they want to fill it up, they might consider partnering with someone who'd put some mid-range apartments nearby.  The immediate area needs to get less desolate.  I can't believe the current occupants would be so inimical to market rate renters when there are already projects and homeless shelters (and a public university) right down the street.

 

The issue with rentals is that there aren't enough of them, particularly of the type that's in demand.  I understand what the stats say, but they ignore the fact that many of these rentals do not meet the specific demand for modern one bedroom apartment units.  It really is a problem and it holds back downtown's growth.  In trying to draw new residents into a troubled area like inner-city Cleveland, it does help to reduce barriers like down payments and lifetime financial commitments.  Try before you buy.  It's not that condos are bad.  It's just that we don't have enough of the type of rentals we need, the type that people are lining up for.

yes 1br's are hot now.  But they were not so hot when the downtown residential market was just breaking in 10+ years ago. most of what was built was catering to what the market was at that point in time.  First it was artist lofts, then it was primarily 2 and 3 br places where in yps shortly after college would come in with roommates for 2-3 years before moving on.  Then we saw some older apartments turn to the first for sale units which were and still are less expensive (grand arcade, etc). Then more upscale rentals. A handful of less expensive rentals (crittenden) Then trying to capture the empty nesters with baby boomers (pinnacle / AD), and really just in the last few years have we started to see a pent up demand for more late 20's early 30s professionals wanting to stay DT longer... and without roommates.  And thus... we've started to see more upscale rentals focussing on 1 brs (euclid block, 668).

 

These people aren't throwing darts at a board.  They are just responding to the market.  Why aren't there more rentals flying up right now catering to the 1 br market?  Ummmmm  have you noticed the GLOBAL LENDING CRISIS?  It isn't exactly easy to make these projects happen at the moment. 

Mr. Mayor I wish I had a nickel for every time you and other posters reference the Global Lending Crisis....then I would be able to finance all these projects myself...it just doesn't see to sink in with many of the gang on the Board.

Nope.  Apparently people are just "full of no" and "don't want it bad enough".

Nope.  Apparently people are just "full of no" and "don't want it bad enough".

 

AMEN!

Mr. Mayor I wish I had a nickel for every time you and other posters reference the Global Lending Crisis....

 

Me too.

 

Let's proceed as if everyone is in fact aware of the recession/depression/GlobalLendingCrisis etc.  Chances are that hasn't escaped us.  And chances are we're also aware that there's no magic button for such things.  Even in this environment, or the previous one, it's still possible for mistakes to be made by developers and policymakers.  And it's also possible to make changes.  None of those changes will bring about a magic button.  But they can increase our chances of success, now and in the future.  Looking around this city, and comparing it to others similarly situated, it's evident that changes are needed. 

 

There are a lot of things various levels of government could do to help make the Avenue District flourish.  Upgrading East 12th street was certainly one of them.  Perk Park was another.  Jumping on the developers who left a pile of filth by the townhouses was yet another.  Are there any more?  What have we not tried?  What DO we have besides no?  How bad DO we want it?  What are we willing to do to make it happen, regardless of the timeline?  "Wait for the banks" is a valid answer, but as noted, it's not like anyone gets a nickel for every time we use it.     

sigh....

^^Don't forget 100% property tax abatement for 15 years on your list of things local government has done to help encourage development.

The difficulty of getting a condo loan may be the #1 issue, ESPECIALLY when the building is not half full (I straight up couldn't get a loan for the Avenue District because of this).  Recently I was looking at buying, and I wanted to go condo, but there was about and $80,000-$100,000 difference in borrowing power when it came to a single-family home/townhouse and a condo.  The condos I were looking at were just out of my reach loan wise, even though I could get a house for the exact same price.  Long story short, I'm renting for another year or two until I can raise my credit score enough... 

 

I'm still pissed off there is a loan amount difference for condos and everything else...

and there isn't anything the city government can do about that...

 

moving on.

Gee I really like having other posters only reprinting a portion of one of my posts so that it completely misrepresents the point I was trying to make.  Somebody has a career in advertising waiting for them doing political commercials.

Recently I was looking at buying, and I wanted to go condo, but there was about and $80,000-$100,000 difference in borrowing power when it came to a single-family home/townhouse and a condo. The condos I were looking at were just out of my reach loan wise, even though I could get a house for the exact same price. Long story short, I'm renting for another year or two until I can raise my credit score enough...

 

I'm still pissed off there is a loan amount difference for condos and everything else...

 

So....  Why are banks stricter with condo loans than home loans?  Were condo prices hit harder in the recent economic downturn so there's more risk?

This is a post I made in the little italy thread some time back... not much has changed.

 

well, let's see... about a year ago fannie / freddie changed their requirements for issuing mortgages at condos making it significantly harder for a potential buyer to get a loan.  I just dug up an old WSJ article that can give you more information here:

 

Fannie Tightens Its Conditions for Backing Condo Mortgages

http://online.wsj.com/article/SB123733304341863319.html

 

With these guidelines it can be nearly (but not totally) impossible to get loans as a consumer.  Then factor in how many banks got burned by the spec condo craze (think all the 90% empty towers in places like miami), and getting a construction loan is nearly (but not totally) impossible.  And then factor in for most consumers to get loans you need a 71% sold building.  Which means you will normally need 71% presales now to get your construction loan.  I actually read somewhere at some point that K&D was supplying 2nd loans to buyers to help them meet these new thresholds just so they can get units sold.  Are there exceptions?  Sure.  I've heard Key has been bending over backwards to help sales go through at the Park Building.  So case by case it can be done.  But if you're building you better be able to bring a LOT of equity to the table.  And if you're buying one, you better be prepared to bring a LOT of equity to the table.

 

Crummy situation all the way around for condos right now.  My wife works for a local bank.  Condo loans are nuclear to them.  They won't even look at giving people loans for condos.  Sadly, it's just the way it is right now.  These tighter regulations seem to be hurting a lot more than they are helping.

I've heard the changes in lending have made it much more difficult to get a loan for a condo, but Battery Park seems to be moving along despite this - over a dozen units sold in last 10 months?  Most people there are getting loans through Keybank which financed the entire development.  Why can't this same approach be done at Avenue District?  Both developments are in the city of Cleveland, new construction, mid rise townhome style, tax abated...?

I've heard the changes in lending have made it much more difficult to get a loan for a condo, but Battery Park seems to be moving along despite this - over a dozen units sold in last 10 months? Most people there are getting loans through Keybank which financed the entire development. Why can't this same approach be done at Avenue District? Both developments are in the city of Cleveland, new construction, mid rise townhome style, tax abated...?

 

Re-read the posts above.  Townhomes are not considered condos in terms of lending practice.

Damn Miami.  I want to smack them.  We haven't overbuilt condos but we get punished, too.

From the DCA "clips"...I had no idea....

 

Simply Food Opens 2nd Downtown Location

On July 8th; Simply Food opened its second location in downtown Cleveland. With one location already in the Chesterfield Building, owner, Ashok Patel opened his newest store in Reserve Square in the old Avenue Supermarket. He currently occupies 7,000 sq feet, 6,000 of it is being used for retail and selling space and the other 1,000 sq feet is used for storage. By opening a second location, Patel was able to expand services and offer more for residents and shoppers. The new store sells groceries, dairy, meat, beer/wine and hot food, all made fresh. Patel enjoys being located downtown and said, "we emphasize customer service" and it truly shows when his employees have come to know customers on a first name basis.  In his new store, he currently has 10 employees. Simply Food is open 7 days a week; Monday through Friday from 7:00a.m. until 9:00p.m., Saturday from 9:00a.m. until 9:00p.m. and Sunday from 10:00a.m. until 5:00p.m. Call 216-298-9110 for more details

I'm not sure if this has been discussed yet, but the developer dropped prices on some of the remaining townhouse units.

 

In case anyone on here is interested in a new downtown pad: 

T-22, 1433 Lindazzo Ave., Unit C - $269,000 / Monthly Principal and Intr. Pmt. Est: $1,218*

T-23, 1425 Lindazzo Ave., Unit D - $199,000 / Monthly Principal and Intr. Pmt. Est: $ 901*

T-24, 1421 Lindazzo Ave., Unit A $339,000  / Monthly Principal and Intr. Pmt. Est: $1,535*

T-25, 1415 Lindazzo Ave., Unit B $326,000  / Monthly Principal and Intr. Pmt. Est: $1,476*

T-26, 1409 Lindazzo Ave., Unit B $326,000 / Monthly Principal and Intr. Pmt. Est: $1476*

* assumes a 30 year fixed mortgage with 5% down payment.  The rate is 3.99%, which is lower then today's rates because the developer will buy down your mortgage rate! 

 

www.zarembahomes.com

www.theavenuedistrict.com

(216) 589-8524

 

On the building on 12th Street, does anyone know if anything will ever occupy the street level retail spaces?

On the building on 12th Street, does anyone know if anything will ever occupy the street level retail spaces?

 

Let me go get my Magic 8 Ball.

I have never even heard of what sort of ideas they had in mind.  To me, this project is a combination of a little poor planning and a lot of bad timing.

It was supposed to be a restaurant.

This is a microcosm example of why I pose the question/thought..that if we cannot currently fill the myriad of business/retail spaces we currently have that are in good condition with businesses that would be suitable for the current spaces...why would adding a bunch more places with such spaces more do any wonders? Oh, that actually rhymed!

 

Anyway, its like playing musical chairs with downtown available retail/business space...one places gets abandoned others fill up.....those get abandoned and move somewhere else.... Until there is a lot of NEW places waiting to open, and people there willing to patronize, why add more space? I just don't get it.

EC is right, but what I think gets lost in this discussion are the projected time lines for growth that were put in place when developments like "The Avenue District" were approved (in 2005!).  The anticipated build out for the project (all 400+units) was 2012.  That's two years away.  The retail space was only 12,000 square feet (only 7,000 was built in Bldg. 1).  That's not a lot of retail space.  The space that was provided was done so in manner that was consistent the expected residential growth in both the AD buildings, as well as the existing 3000+residential units currently on E. 12th Street.  The intent was never to "poach" existing downtown retail but rather create opportunities to service the new influx of demand.  When that demand didn't materialize, the retail became purpose less.

 

RE:  What was supposed to go there:  There are NUMEROUS occasions over the past 36 months when the developer was VERY close to signing a restaurateur to the space, only to have the restaurateur back out either because of his financing falling off, the state of the chief's personal finances, or general fear of the market on the east side.  The AD developer was willing to go so far as investing IN the restaurant to make it work, but each time the operator / owner backed out because of what they saw as a shrinking economy on the east side of downtown.  In the past few years, as the Erieview Tower shed tenants, Eaton abandoned ship, and Huntington Bldg. emptied out, along with future residential phases not starting as quickly as projected, the restaurant operators fears became validated. 

 

The developer has also entertained many offers for office space and commercials users on the first floor (similar to the situation in the 668 bldg. with Wyse), but the most recent attempts to fill the space were rebuffed due to current situation with the lenders.  As the lender situation is resolved, I think new commercial opportunities will be viable. 

Thanks for the update Strangebrew. It's always best the get the news straight from the horsey's mouth! It's one of the things I like about UO.

^^Is Erieview shedding tenants?  Just a few years ago it was filling up, stealing tenants from other buildings due to great leasing deals.  I know of two mid size law firms (over 50 lawyers each so with support staff over 100 people for each firm) that moved in during the past 5 years.

I think he's referring to the mall not the office building.

I consider this still part of the Avenue District.  Looks what's up for sale:

 

http://www.loopnet.com/Listing/16484384/1701-E-13th-St-Cleveland-OH/

 

It's listed as an office building? I thought that building was CMHA senior housing??

I personally wish Cleveland State would gobble it up and make it into dorms.  It could eventually be the NW border of campus....dreams...

^ That would be a great re-use!

OK guys, I'm embarrassed.

 

I think I have just caused a ruckus for no reason.

 

Reading the description, I'm thinking it's only the "2 Story" section in the front that is for sale for $1.5 mil, not the tower itself...which also explains why it says "Office Building"

If you look at it it says 2 floors, approx. 30,000 sq ft.  It looks like just the Promise Academy portion is just for sale?

Not sure on the confusion, but Bohn Tower is at 13th & Superior - that's the CMHA building - definitely not for sale.  The Rockwell building is up the street...

Yup, it's just the two story building.  It was for sale a couple years back, too, so it's either been up for sale for a while, or it just went up for sale again.

Yup, it's just the two story building. It was for sale a couple years back, too, so it's either been up for sale for a while, or it just went up for sale again.

 

Well, Promise Academy has only been there since the fall of '08 I believe....  Then CMSD shut it down in their school closures.

I personally wish Cleveland State would gobble it up and make it into dorms. It could eventually be the NW border of campus....dreams...

 

Better yet...regular market rate living space.