Now that Akron has named the buyer, the estimated $20 million redevelopment of the CitiCenter Building joins a glut of downtown projects competing for private funding, public tax breaks and future tenants.
Weston Inc., a Cleveland-based real estate developer, has agreed to pay $215,000 more than the $2.6 million price tag city officials put on the former YWCA building at 146 S. High St. The deal offloads city office space at a time when the city is in a hiring freeze.
Before the Great Recession, municipal employment was on pace to eclipse 3,000. “We now have about 1,800 employees, but we never right-sized the space,” said James Hardy, chief of staff to Mayor Dan Horrigan. “This [sale] allows us to vacate an entire building downtown, put it to productive use and right-size the city’s municipal footprint.”
Should City Council approve the sale and Weston secure financing, the new owner of the 11-story high rise would not pay property taxes for 15 years on new apartments in the building under the city’s residential tax abatement program. The city might offer a 30-year tax break for upgrades to the building’s office space.
Anticipating that the developer will seek federal tax credits, which the state dispenses annually to offset the cost of repairing old structures, Mayor Horrigan has emptied the building of its municipal offices, with the exception of a few tellers accepting utility bills and an employees’ credit union.
With local builders overloaded with redevelopment opportunities downtown, Horrigan opened up bidding on the CitiCenter property to private firms as far away as Pittsburgh and Columbus. Weston was the only company to make an offer.
The work — 60 apartments on floors two through 11 and office space on the bottom two floors — will be drafted by Sandvick Architects, which boasts the redesign of 60 historic buildings in Cleveland, and performed by Thomarios Construction of Akron.
Paul Thomarios, who added construction to the painting company his father founded 70 years ago, said Weston has not yet given him a contract. The architects have only just been hired. But he and Hardy are “confident” that the developer and architect will continue their trend of accessing tax credits seen as essential to repurposing downtown Akron at a time when some developers are pinching pennies to build new apartments.
Before the sole bidder was known, the Akron Planning Commission endorsed a rough sketch of the deal last month. City Council members will consider the purchase agreement at their next meeting at 7 p.m. Nov. 19 on the third floor of City Hall, 166 S. High St.
The sale agreement requires a $100,000 deposit from Weston, which has a year to pull together financing on the renovation project. The company can buy more time, up to two more years, with annual deposits of $50,000 — all of which would be credited toward the purchase price. If the financing falls through, Weston can walk away.
Thomarios said construction could take 18 months. That puts the potential reopening of the CitiCenter as a mix of apartments and office space between two and five years out. Weston's proposal estimates project completion on Sept. 30, 2020.
Hardy, who coordinates economic development deals, said the apartments should average 1,000 square feet. The city would lease 20,000 square feet of office space in the basement and first floor for the Akron Municipal Employees Credit Union, which is affiliated with but not run by the city. The utility billing department will be permanently moved to the service garage on Triplett Boulevard. Hardy is considering electronic kiosks at CitiCenter to keep bill payment services downtown.
As for the swimming pool in CitiCenter, “I have no idea if they’re going to keep that active or not,” Thomarios said, noting the high cost of heating a pool for a few dozen tenants.
The renovation also calls for 3,000 square feet of yet-defined amenities for future tenants, whose monthly rent will be set by the demands of the downtown housing market. Weston's proposal names a base rent of $1.5 a square foot, or $1,500 a month for the average-sized apartment
But before it's completed, hundreds more apartments are expected downtown: additional town homes planned as the Northside Lofts wrap up; apartments in the Landmark and five other historic buildings in the Bowery Project; more than 100 apartments in the old Akron City Center Hotel, the former Holiday Inn at Cascade Plaza.
Housing market watch
“Interest in urban living has steadily increased over the last several years,” Ed Asher, president of Business Development for Weston, said in a statement emailed by the city Tuesday. “The market for urban living in Akron is in the early stages. I see a lot of potential here.”
The Bowery project, delayed while public and private officials stacked complicated funding sources, was supposed to begin this summer and provide new apartments, a grocery store, restaurants and Main Street access to the Lock 4 patio within a year. The project is now estimated to begin later this month.
Local developer Joel Testa announced in February 2017 that the Akron City Center Hotel would be getting a makeover. So as not to confuse the two projects in the center of the city, Testa is calling his building renovation "Ascend." The project at 20 W. Mill St. started as all apartments, then Testa considered hotel rooms before he and investors decided that it would be cheaper to build a new hotel somewhere downtown in the near future.
Now he’s back to all apartments at what he’s calling “affordable, market rate” prices. But construction costs are still breaking his budget, so he’s looking at break-even loans paid down by lower energy bills.
Testa now plans to start construction on Ascend in 90 to 120 days, about when the CitiCenter project will apply for historic tax credits. Each developer is building for clients of varying incomes, competing in a hot housing market they say will create a catalytic demand for restaurants, grocery stores, bars, shops, more housing and — the city hopes — jobs.
“It’s a good critical mass,” said Testa. “Rising tides lift all ships."
Reach Doug Livingston at 330-996-3792 or email@example.com.