CLEVELAND, Ohio – Cleveland City Council on Monday approved financial benefits for large construction projects in the Fairfax and Clark-Fulton neighborhoods, designed to bring more apartments, stores and offices to market.
Council passed legislation that showed it intended to enter into a 30-year tax increase funding program for a project that will bring 80 apartments to East 105th Street and Frank Avenue. Legislation for such a package will come at a later date.
Funding through tax increases allows new tax revenues generated by development to be used to help finance projects. Taxes for Cleveland schools are generally not affected by the agreements.
The city’s economic development director, David Ebersole, told a committee meeting on Monday that the incentive to fund the tax hike, if passed, would be worth around $ 100,000 a year for developers and would not come into effect until after the expiration of a 15-year tax. abatement on income generated by the project.
Council members also approved a $ 2 million loan to be paid over three decades for the approximately $ 27 million project. The promoters Fairfax Renaissance Development Corp. and McCormack Baron Salazar, based in St. Louis, will pay no interest for the first decade of the loan and 2% interest for the remaining 20 years.
The new apartments are part of a larger plan for “Innovation Square”, which is expected to include approximately 500 apartments on 105th Street East between Cedar Road and Quincy Avenue, as well as a Meijer grocery store. Councilor Blaine Griffin, whose neighborhood includes Fairfax, has championed plans to address the effects of the area being a “food desert” without easy access to affordable and nutritious food, as well as to bring housing to an area to low income adjacent to the most upscale neighborhood of the University Circle.
Griffin said on Monday this is an opportunity to develop the East Side and increase population along the nearly completed corridor of opportunity.
âAt the end of the day, I think we have a project that not only the city, but not just the community of Ward 6 and the community of Fairfax, will benefit, but the entire city of Cleveland, by having more workers. in the largest employer in the state of Ohio who can live, work and play in our city, âsaid Griffin, referring to the nearby Cleveland Clinic.
Of the 80 apartments, 56 will be at market price and the rest will be priced to provide housing for the workforce.
Documents submitted to council say public incentives are needed as the market rental rate in Fairfax will not be as high as in the city’s hottest markets. He also said rents for housing units for labor will not be low enough to qualify for some federal tax credits and the cost of building materials continues to rise.
The ordinances approving the economic incentives will come into effect once signed by Mayor Frank Jackson, whose administration is supporting the projects.
The Council also did the following:
– Approval of a low interest rate loan of $ 2 million, to be repaid over 30 years, as well as legislation paving the way for incentives for financing through tax increases worth approximately $ 200,000 per year for plans to renovate the Northern Ohio Blanket Mills complex on West 33rd Street. The Clark-Fulton complex dates back to 1889 and has been used for industrial purposes for almost 120 years.
Developers The Levin Group and the Metro West community development organization plan to build 60 apartments for low-income residents on the 2.2-acre site, as well as 35,000 square feet of space that will be used by the centers for children. families and children. The city estimates that the project will cost around $ 33 million.
– Also in Clark-Fulton, Council approved a series of incentives for a project to transform the former HJ Weber building on West 25th Street into CentroVilla 25, a Latin market and neighborhood hub. It will also have offices for the Metro West Community Development Organization and the Northeast Ohio Hispanic Center for Economic Development.
Ebersole said the city is proposing to provide the project with a $ 1 million bridging loan, a $ 500,000 forgivable loan, a $ 100,000 grant and a $ 650,000 low-interest loan that will be reimbursed through a tax increase funding district. The loans were approved, while legislation passed by the Council paved the way for funding tax increases to be put in place for a subsequent bill.
– Council also took the first step of offering 30-year tax increase funding incentives to the Waverly & Oak apartment building project on Detroit Avenue near West 57th Street. The development is expected to include 126 market-priced apartments and 17,300 square feet of retail space.
The project is now estimated at $ 47 million. Although city council has yet to approve the incentives, Ebersole said they are estimated to be around $ 300,000 per year for developers, which would go into effect after the 15-year tax rebate expires. on the income generated by the project.
When complete, the building will be the first new mixed-use construction in the Gordon Square neighborhood of the Detroit-Shoreway neighborhood. To make room for this, development firm Bond Street Group plans to demolish the 64-year-old Club Azteca building, as well as the neighboring Vietnamese grocery store and barber shop.
The Cleveland Monuments Commission in April gave its approval to the project, which came after a group of Latino advocates tried in February to prevent the demolition of the Club Azteca building. Many of those defenders changed their mind in the months that followed, after the developers pledged to commemorate the club on the property.
This story has been corrected to reflect the nature of the bills passed by the Council regarding the funding of tax increases.