Michigan Developer Weighs Downtown Deal
This article is by Stan Bullard, Crain's senior reporter.
Michigan real estate developer Jonathan Holtzman, who is building apartments throughout the Midwest, wants to construct a mixed-use residential building in downtown Cleveland.
Holtzman, CEO of City Club Apartments in Farmington Hills, described the proposed structure as a "high-rise" as he confirmed his interest in downtown Cleveland in an email from his public relations firm.
"We are impressed with downtown Cleveland and the great things that have been taking place over the last several years," Holtzman wrote. He has experience with the Cleveland market, as his former management company, Village Green, now of Southfield, Mich., manages the Flats at East Bank apartments at Wolstein Group's Flats East Bank Neighborhood in Cleveland.
Holtzman has even built in the region before. He was partners with the predecessor of Forest City Realty Trust in developing the 360-unit Village Green complex in 1994 in Beachwood.
After several requests through his publicist, Holtzman confirmed he was pursuing as "the best location" the parking lot between the Cleveland City Club Building, home to the well-known City Club of Cleveland speaker venue at 850 Euclid Ave., and the Residences at 668 Euclid apartment building.
"We have begun the process of understanding (that) opportunity," Holtzman wrote, adding he will share more details later. His focus is known among insiders; three sources familiar with the situation also said the out-of-towner is focusing on the parking lot at 720 Euclid Ave. The site once was the home of the Hippodrome Theater, which occupied part of an 11-story office building that spanned from Euclid to Prospect Avenue, until it was razed in 1980.
The 1907-vintage building was replaced by a five-floor parking garage on the middle of the parcel in 1985, with surface parking lots on the Euclid and Prospect frontage. The sources, who spoke on grounds they not be identified, said City Club Apartments wants to build only on the Euclid parking lot.
If that proves to be Holtzman's building site, it would accomplish something significant for the city from an urban planning perspective: creating an intact city block on lower Euclid once again.
The property is across the street from The Beacon, a 19-story apartment building under construction at 505 Euclid Ave. Apartments in renovated old buildings also surround the site, from The Garfield and 778 Euclid and the East Fourth neighborhood, which has suites looking out on Euclid, to the Schofield Residences, 2000 E. Ninth St.
Currently, Holtzman and his partner, Canadian real estate developer Alan Greenberg, are undertaking an estimated $500 million in development. Among those projects are a 17-floor building in Minneapolis and the $70 million City Club Apartments-CBD Detroit, an eight-floor building in downtown Motor City with 288 suites above ground-level retail space.
In an interview with Crain's Detroit Business last January, Holtzman said his latest concept for apartments is to have them provide "hotel-like" services. The Detroit project will incorporate an outdoor movie theater, valet parking, concierge services and exercise rooms.
It's easy to see how Cleveland fits the itinerary for development of City Club Apartments. The company said it plans to develop three projects annually and is starting to prospect for locations on the East Coast. Other new communities are under development and construction in Kansas City, Pittsburgh and Chicago. Recently completed developments include 800 Tower City Club Louisville and CCA CBD Cincinnati.
Holtzman publicly telegraphed his interest in downtown Cleveland last June as he sold an apartment complex in St. Louis for $48 million. The company issued a news release on the sale, saying it planned to use the proceeds to focus on "several accelerating markets, including Cleveland."
If it seems City Club Apartments is growing at a prodigious rate, there are several reasons for it.
Holtzman has been building and operating apartments since the 1980s. A longtime apartment guy, he clearly wants to participate in a big way in a multifamily apartment market driven by low interest rates that is the largest of his working life. He sold the Village Green Management Co. in 2016, but retained ownership of a portfolio of 10,000 apartments that he and his family, which began building single-family homes in 1919, has constructed or bought since the mid-1950s.
Property records show 720 Euclid and associated properties are owned by GSK 720 Euclid LLC and 720 Euclid LLC. Tax bills are sent to the address of G&B Real Estate Advisors in Beachwood, according to land records. That firm that includes several members of the Goldberg family, previously the owner of Ohio Savings Bank, and partners in multiple real estate ventures.
The managing member of GSK 720 Euclid LLC, according to state records, is David Goldberg, who long has managed the family's downtown real estate and is a "director emeritus" with Downtown Cleveland Alliance.