As the May Co. project didn't get that big $25m tax award they were seeking, is this project still moving forward?

 

Michelle J. McFee

‏mjarboe[/member]  When Carney/Rains/Goldberg saw rent roll for The 9, revisited layout for May Co. redo. Approx. 300 units, w/ bigger ones for empty nesters.

 

 

 

Michelle J. McFee

‏mjarboe[/member]  Developer John Carney says May Co. redo plans still afoot in downtown #CLE. Taking another run at catalytic state tax credit this year. #CRE

 

 

 

Michelle J. McFee

‏mjarboe[/member]  John Carney says market study for May Co. rents showed $1.70 psf. Anthony Slyman says he's shooting for $1.50 psf at 1220 Huron redo. #CRE

 

 

I always thought since these developers pushed so hard for the creation of the "catalytic" tax credit, it would have been politically tough to give them the first award, especially since Cleveland gets a large share of all the state tax credit money.

 

Now that year 1 is gone, I think they have a better chance at it.

The problem with the May Company building is that the floor plates are so big, they were built for a department store and offices, it doesn't lay out well at all for residential.  I can't imagine building units without a window access so pushing the hallway in to maximize space makes the units really long & awkward. 

^I've wondered about the potential for cutting out a small 'light well' (proper term?) on the interior, which would solve that problem and give the building a tiny, private courtyard.

That would work. And yes, light well is the correct term. It could actually be an interesting opportunity to do something unique architecturally with a portion of the building that won't deal with historic tax credit requirements.

 

And like you said, this could be used as a private courtyard for residents. More comfortable units and an asset for people renting.

^I've wondered about the potential for cutting out a small 'light well' (proper term?) on the interior, which would solve that problem and give the building a tiny, private courtyard.

 

On the lower floors, apartments would bookend parking on the north and south sides of the building. Starting on the fifth floor, the developers envision two rows of apartments -- one facing out on the building's north, south and east sides and the other facing in, ringing a four-story atrium.

 

http://www.cleveland.com/business/index.ssf/2013/09/investors_eye_downtown_clevela.html

I haven't read the actual legislation expanding the program, but it was widely reported that the state can award only one "catalytic" credit every two years. If it's still crucial to MayCo, we're probably quite a ways off from any action.

May Co. building developers to try again for historic preservation tax credit

John Carney, a real estate owner and developer who heads an investment group pursuing the May Co. project, said at a Wednesday, April 22, meeting of the Northern Ohio Chapter of the National Association of Industrial and Office Properties that the May Co. project will apply for the catalytic state credit as part of the program’s 15th round. The round has a deadline of Sept. 30, and money may be awarded by the end of the year.

Carney said the state originally planned to do the next, or second, catalytic award in June 2016 but moved it up to this December. Since the project at 158 Euclid Ave. lost out to the Cincinnati Music Hall for the first catalytic award in December 2014, Carney said his team asked the state to accelerate the next award at the same time as it reviewed its prior application with the state to find ways to improve it.

http://www.crainscleveland.com/article/20150424/FREE/150429895?template=mobile&X-IgnoreUserAgent=1#ATHS

^ Awesome. That is great news. I truly never expected that the state would move up the next catalytic award. They must really be noticing all the huge benefits that have resulted from the HTC program. It's been so successful, I hope we start seeing some more money put into it.

So Carney and his team lobby for the creation of the catalytic state credit, but lose out to the Cincinnati Music Hall. So then Carney & Co. lobby to have the next award moved up from June 2016 to December 2015. Does this mean that 925 Euclid Avenue will get that award?? Sorry... Couldn't resist. :)

^ Haha, I was just thinking about that. I can't imagine how angry they would be if they don't get the catalytic award this time.

May Co., 925 Building, former Goodyear campus vie for big state tax credit (photos)

By Michelle Jarboe McFee, The Plain Dealer

on October 06, 2015 at 7:00 AM, updated October 06, 2015 at 8:30 AM

 

CLEVELAND, Ohio – Two largely empty downtown Cleveland behemoths will vie against the former Goodyear Tire & Rubber Co. headquarters in Akron for up to $25 million in coveted state tax credits this fall.

 

Sept. 30 was the deadline to apply for a December round of tax-credit awards that support historic preservation. Three properties – the May Co. building on Public Square, the former Huntington Building on East Ninth Street and the old Goodyear complex – are seeking a special credit reserved for projects with the most powerful economic punch, according to an applicant list provided to The Plain Dealer.

 

All three redevelopments missed out in late 2014, when the state awarded its first such "catalytic" tax credit to a planned makeover of Cincinnati Music Hall, a late-1800s performance venue. Now the runners-up are competing again.

 

MORE:

http://www.cleveland.com/business/index.ssf/2015/10/may_co_925_building_former_goo.html

Joe Cimperman's tweet this morning:

 

"2 dynamic projects discussed today @ohiocitytweets @DowntownCLE let's go #maycompany let's go @PeterSnavely "

https://twitter.com/joecimperman/status/666599096828960768

 

From his attached picture:

 

"Authorizing the Commissioner of Purchases and Supplies to acquire and re-convey properties presently owned by Euclid of Cleveland, LLC, or its designee, located at 200 Euclid Avenue for the purpose of entering into the chain-of-title prior to the adoption of tax increment financing legislation authorized under Section 5709.41 of the Revised Code; and authorizing an agreement with Euclid of Cleveland, LLC, or its designee."

 

Is this in preparation for the announcement of the catalytic tax credit, or does this project in its present form have another way forward without that $25mil award?

They are likely looking for another way forward without that $25mil award.

 

They are likely looking for another way forward without that $25mil award.

 

 

Like this?

 

http://planning.city.cleveland.oh.us/designreview/drcagenda/2015/11202015/index.php

 

City Planning Commission

Agenda for November 20, 2015

 

Ordinance No. 1349-15(Ward 3/Councilmember Cimperman): Authorizing the Commissioner of Purchases and Supplies to acquire and re-convey properties presently owned by Euclid of Cleveland, LLC, or its designee, located at 200 Euclid Avenue for the purpose of entering into the chain-of-title prior to the adoption of tax increment financing legislation under Section 5709.41 of the Revised Code; and authorizing an agreement with Euclid of Cleveland, LLC, or its designee.

What's that mean in layman' terms?

Sounds like the City, in some capacity, is going to purchase the property and then convey it back to the owners in order to meet some chain of title pre-requisite for state authorized tax increment financing provided by local ordinance(?)

Let's just get this project moving.  The lower Prospect side of the building could sure use a catalyst of development.  The May Co rehab could be the catalyst lower Prospect and Ontario need.  Then comes nuCLEus.

Sounds like the City, in some capacity, is going to purchase the property and then convey it back to the owners in order to meet some chain of title pre-requisite for state authorized tax increment financing provided by local ordinance(?)

 

That's my take as well. Pretty innovative, balzy move! It looks like Euclid of Cleveland LLC still owns the entire May Co. building, despite reports in 2013 they would sell a portion of the complex to another investor group. The only part they sold off was the old May Co. garage at the corner of Ontario & Prospect, which was purchased in January 2014 by Rainbow Garage LLC.

I thought the City entering chain of title was standard procedure for all TIFs, no?

I thought the City entering chain of title was standard procedure for all TIFs, no?

 

Even with an existing building? I've seen it with new construction, but not a renovation unless I've just never noticed it.

^It was used for the initial hotel conversion of The Arcade. Maybe others too. It's essentially lump sum tax abatement. 

This is pretty common--nothing innovative.

This is pretty common--nothing innovative.

 

I'm getting old...

Can someone explain how a chain of title TIF works?

^I suspect it's just like any other TIF, but the fact that the entire "district" is made up of one privately owned site means the city has to perform some [slightly farcical but entirely accepted] legal gymnastics in order to make the required public purpose findings.

 

http://development.ohio.gov/bs/bs_tif.htm

Does anyone know when the state will announce the winner of this years 25 million catalytic state tax credit?  I realizes it is

sometime in December. Does anyone have any inside info?

this coming week, 17th or 18th.  Geis & other developers closely waiting for this to make their move on the May Co.

It appears we will have an answer tomorrow. May Co or 925.http://www.cleveland.com/business/index.ssf/2015/12/may_co_or_925_building_ohio_to.html#incart_river_index

I heard from some insiders its 925/Huntington.

Personally I hope it's the May Company, at least 925 Euclid is a fully enclosed structure that to this point isn't a complete eyesore.  If it is 925 I have to think the May Company team doesn't have their act together.

I heard from some insiders its 925/Huntington.

 

Say What.

I heard from some insiders its 925/Huntington.

 

What I heard also

Oooooo buddy.  I am freaking stoked for the 925 project now though.

It seemed from the last article I read like the May Co. project wasn't going to happen without the credit. At least with the current developers. 925 I thought was a go regardless. I hope May Co. can be taken over by someone who can make it happen with or without the tax credit

From a pure geography standpoint I would have preferred the May Co. get the grant.  It really would have helped connect public square to the Gateway area. Good for 925, though.

From a pure geography standpoint I would have preferred the May Co. get the grant.  It really would have helped connect public square to the Gateway area. Good for 925, though.

As was I.  I welt like the local team developing the project believed in it, stuck with it for a number of years, and was really depending on it.  It concerns me what they do now.  I recall Carney being extremely vocal last year when they lost out.  I also though geographically, this made the most sense lying between the PS renovation, and E4th. 

Well, here's hoping the opportunity cost of overlooking a redesigned Public Square > the possibility of $25M being awarded in 2017.

Don't count on all of this project being dead just yet. I'm hearing rumors of a national retailer wanting to potentially take the ground floor. I don't know what that means for the rest of the building, but take it for what it's worth.

Shouldn't the economics on this project look much different today than a few years ago?  Have to think with rising rents, occupancy and public square redo that we're getting close to feasibility without the tax credits.

^^Things could change, but the developer team seeking the tax credits only has an option to purchase the upper floors. So any increased cash flow to the ground floor retail spaces wouldn't effect the feasibility of the residential conversion.

And that could be a big reason why they didn't get it. It's not even fully purchased yet and will mostly just be apartments. I truly believe this building will be fine on its own, especially being on a renovated Public Square.

^Even if currently feasible in some sense, it's still possible the developers would rather roll the dice again in 2017. $25M is a lot of "free" money to give up, especially if it's already baked into the purchase price in their option.

It should be noted that the Cleveland Athletic Club project got its tax credits, but the purchase papers on that building haven't been signed yet either. But the CAC is a smaller, less-risky project.

And that could be a big reason why they didn't get it. It's not even fully purchased yet and will mostly just be apartments. I truly believe this building will be fine on its own, especially being on a renovated Public Square.

 

I've walked this building dozens of times, and crunched the numbers.  The amount of work it needs to do a market rate apartment conversion with partial parking structure inside, cutting open interior views, exterior renovation, roofing, windows, interior demolition, abatement of lead/asbestos, upgrade of all elevators, mechanical, electrical, plumbing...    it doesn't work without the tax credits.  Even then, it is probably very tight.  Someone would be taking on a major risk

How much does the parking component hurt the May Company proposal? Thumbing through the application guide for round 15, potential economic impact is 70% of the scoring. The 925 building will have nearly twice the number of apartments, plus a hotel and office space. That alone just crushes the May Company proposal. If the goals are catalytic impact and historic preservation, then converting 150,000+ square feet of space for parking can't help it's chances.

 

See page 31 for the criteria summary.

 

http://development.ohio.gov/files/redev/OHPTC_Application_Guide_Round_15.pdf

 

I also wondered if the nearby public/supportive housing projects like Winton Manor on Prospect helped the 925 since low-income and unemployed in the census tract actually help your score. But it seems they are both in the same census tract.

 

http://cua6.urban.csuohio.edu/nodis/maps/2010maps/Cuyahoga_tracts_with_roads.pdf

 

So, now what? The chain of title discussed a couple weeks ago set this building up for a TIF. Will that be enough to start redevelopment?

Don't count on all of this project being dead just yet. I'm hearing rumors of a national retailer wanting to potentially take the ground floor. I don't know what that means for the rest of the building, but take it for what it's worth.

Thats actually why I didnt 100% support this project as I really felt it needed to incorporate a 1st/1st and second floor department store.  Which at the current rate of things, another year could be feasable. 

As much as I love the scale of the old Huntington building, I'm pretty disappointed this one is going to sit vacant even longer. It's at perhaps the most prime location in the city, and yet just sits there crumbling. With all the other investment going into Public Square, this will only look worse. Especially when all the national attention is turned to Cleveland next summer. Big black eye on the face of the city.

As much as I love the scale of the old Huntington building, I'm pretty disappointed this one is going to sit vacant even longer. It's at perhaps the most prime location in the city, and yet just sits there crumbling. With all the other investment going into Public Square, this will only look worse. Especially when all the national attention is turned to Cleveland next summer. Big black eye on the face of the city.

 

Exactly my thoughts. Can someone at least go in and clean up the Cadillac Ranch patio area and replace some of the windows on the upper floors that currently have plywood in them?