Top of the Hill real estate closing sets stage for start of construction at gateway to Cleveland Heights – cleveland.com

CLEVELAND HEIGHTS, Ohio -- Years in the making, the deal has officially been signed on the dotted line for the Top of the Hill project.

City officials took the final step today (May 5) with the closing on the financial package, essentially turning the project over for construction of the $83 million catalytic gateway development that could get under way this month, beginning with a 550-space parking garage.

The developer, Flaherty & Collins of Indianapolis, and contractor Cleveland Construction anticipate an 18- to 24-month single-phase building cycle that should be nearing completion by the first half of 2022.

While the city remains focused on the challenges the COVID-19 crisis has created for our entire community in the weeks and months ahead, we are excited to be able to move forward with this project, City Manager Tanisha Briley announced.

It represents a major new investment and positions the city for additional growth and development in the future.

The closing includes a ground lease structure in which the city retains ownership of the 4-acre project site and the junction of Cedar Road and Euclid Heights Boulevard, just up the hill from University Circle, while the developer has the right to construct and own the buildings and other improvements to be made.

Those will include 261 market-rate luxury apartments, over 11,000 square feet of first-floor commercial-retail-restaurant space and close to 25,000 square feet of green space.

The development is expected to offer luxury-style living with unmatched amenities in a high-demand area, a city press release stated, citing amenities such as a first-floor co-working space, pet spa, dog park, indoor bicycle parking with a bike-wash station, fitness center, and a 10th-floor pool, terrace and common space for socializing.

The city selected F&C as its development partner three years ago after parting ways with the original candidate, Fairmount Properties, which had been in negotiations that started in October 2016.

The realization of this catalytic and transformative mixed-use redevelopment project at the western gateway to the city is a game changer for our community, City Economic Development Director Tim Boland stated in the release.

School district benefits

Boland added that the project will bring new residents, jobs, businesses, vibrancy and increased economic activity, as well as new tax revenue, to our city.

The same goes for the Cleveland Heights-University Heights City Schools -- a tax increment financing agreement (TIF) is expected to generate over $12.3 million in new revenues for the district over 30 years.

This works out to about $421,000 a year, up from the roughly $21,000 that the CH-UH Schools have received up to now in taxes on City Parking Lot 9, which closed at the beginning of April in anticipation of construction.

The city stands to make a projected $14.3 million in net new revenue over a 32-year timeframe after the development agreement was amended in December.

"Earlier this year, City Council unanimously approved the final financing pieces for the mixed-use project, funded through private construction loan financing and TIF bonds, together accounting for roughly 90 percent of the project sources of funds," the city press release noted.

About $51 million was being sought by F&C through Goldman-Sachs, and while the coronavirus global pandemic wreaked havoc on the stock market in the interceding months, Briley said earlier that the private financing component was never in doubt.

Meanwhile, the city agreed to kick in $1.85 million -- about 2 percent of the project cost -- in low-interest economic development non-tax revenue bond anticipation notes as F&C provided the remaining equity and overhead.

At the prominent gateway between the Heights and University Circle, the Top of the Hills development has been a long-time goal of the city, the press release stated, noting that it was originally home to the 11-story Doctors Hospital, with the city acquiring the property in the 1960s and building the municipal surface parking lot.

Buckingham nix

Throughout the process, there has been opposition on numerous fronts, ranging from derision for the proposed architecture to the removal of original components that were considered selling points to the public, such as a boutique hotel, office space and for-sale town homes.

The latest resistance effort comes from residents of The Buckingham condominiums next door on Euclid Heights Boulevard, who contend that they have been overlooked or ignored throughout the process, which will result in their property values declining and their quality of life affected by a 10-story building blocking sunlight, as well as amenities such as the dog park right outside their windows.

Buckingham spokesman Don King said earlier that a group of residents has retained an attorney to assist in mounting a petition initiative to get what appears to amount to a no confidence vote against the city on an upcoming ballot, which will be the subject of an upcoming story.

More information is also available on the citys website at http://www.clevelandheights.com/toh.

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Top of the Hill real estate closing sets stage for start of construction at gateway to Cleveland Heights - cleveland.com