People who frequently pass by the intersection of East 9th Street and Euclid Avenue have likely gotten used to seeing scaffolding on the Schofield Building. Despite tremendous commercial interest in the property, the most recent recession had stalled redevelopment of the historic structure.
Walter | Haverfield’s real estate team was called in on a referral to new client, CRM Companies, Inc., to help the project move forward. The client was specifically interested in leveraging the firm’s wealth of tax credit expertise, since the building had already qualified for federal Historic Tax Credits (HTCs) and was also awarded state HTCs.
Not only were our tax credit and real estate professionals able to render a tax opinion on the project and conduct a Safe Harbor analysis, but we also negotiated the necessary operating agreements and master lease, refining the master tenant structure. On behalf of our client, our team worked with the tax credit investor directly on these documents to bring about the desired investment result.
Construction and redevelopment of the Schofield Building continues to move forward to complement the other redevelopment initiatives occurring at or near that intersection. When completed, the long vacant building will be home to new retail space on the street level, a 122- room Kimpton Hotel and associated restaurant, and 54 market-rate apartments on the higher levels. The $45 million project is scheduled for completion by December 2015. Combined with the other work that the Walter | Haverfield real estate team has handled within that same block of East Ninth Street, over a two-year period the total investment within a one-block radius is estimated at more than $300 million.
Equally important as the dollar-value investment is the impact on the overall downtown revitalization effort. This marks the entrance of the Kimpton brand into the Cleveland market and the addition of more desperately needed hotel rooms to the central business district. The residential rental units will serve the still growing demand for downtown housing, as occupancy rates continue to run close to capacity. And finally, from the perspective of the many passersby, the Schofield Building’s beautiful facade which had been covered up for years, will be restored, creating an attractive landmark at one of downtown’s busiest intersections.