Townhomes to Give Cleveland's Midtown a Face Lift

As reported by Jay Miller, Crain's Cleveland Business

The sprucing up of Cleveland's Midtown neighborhood, once a ragged industrial district, is continuing. Soon, residents will be occupying $400,000 homes, and office workers will be toiling in the home of a former restaurant supply business.

Ground recently was broken by Boston's Vazza Real Estate Group for One Midtown, a complex of 23 townhomes at East 71st Street and Euclid Avenue, replacing a two-story brick building that last held a long-closed furniture liquidator. Vazza is building three-story, three-bedroom units with rooftop decks of between 1,800 and 2,200 square feet.

One Midtown is Vazza's first venture into Cleveland. Derek Holt, managing director of Vazza, said he has relatives and friends here and his firm has, for some time, been watching Cleveland "out of the corner of our eye."

At the same time, his firm has watched the cost of development rise in its existing markets closer to home. So, he said, it decided, "maybe we should take a closer look at Cleveland."

The firm has watched in Boston, where physicians who used to commute from the suburbs now are buying homes close to the city's major in-town medical centers, and executives believe the same thing can happen here.

Holt also believes the top end of Cleveland's apartment rental market has risen to a point where buying can be cheaper, especially with the financial attraction of Cleveland's tax abatement and a loan program available to employees of University Circle's major employers.

Pricing starts at $409,000. The homes qualify for Cleveland's 15-year property tax abatement, and borrowers may qualify for zero-interest Greater Circle Living (GCL) loans. The GCL program offers employees of several University Circle institutions — Case Western Reserve University, the Cleveland Clinic, the Cleveland Museum of Art, Judson at University Circle and University Hospitals — forgivable loans of as much as $30,000, if all conditions are met.

At the same time, the Link 59 project from Geis Cos.' Hemingway Development is moving another step ahead, with financing for the $22.4 million renovation of the former home of Ace Fixtures on East 61st Street coming before Cuyahoga County Council.

Neither Fred Geis nor James Doyle, Hemingway's partners, returned telephone calls by deadline last week.

Hemingway is asking the county for $2.5 million in loans at 3% interest. In addition, according to a project summary attached to county council legislation, JobsOhio will lend the developers $3.4 million with New Market Tax Credits, a HUD loan and several smaller loans and equity covering the rest of the cost.

According to the county project summary, the developer has identified Infinite Arthroscopy, a biotech company, as the tenant for the entire second floor, bringing 10 employees with it. The project summary also notes that GradSchoolLoans, a client of JumpStart, the Midtown-based nonprofit that assists entrepreneurs that assists medical school graduates with their student loans, is expected to occupy half of the first floor. It would bring 20 employees with an expectation it will add 12 more full-time jobs.

The legislation that would authorize the loans got a first reading before county council Sept. 12. It was referred to council's economic development and planning committee."