The Cleveland Plain Dealer is reporting that another bid has been received for the Ameritrust Tower (also known as the Breuer Tower, after its architect). Well, maybe we should say it’s the same bidder as before, just a differently structured bid. The bidder (again) is Willoughby, Ohio’s K&D Group, a local residential developer. The new bid is for the minimum asking price of $35 million, but this time does not involve K&D needing a loan from the county.
Previously, I’ve written in this blog about the Breuer Tower (AKA The Ameritrust Tower) and its architectural significance and ownership status. (The blog entries can be found here and here.)
Rendering of Tower, Rotunda, and New Office Building
“Office tower, hotel planned at Ameritrust site
A developer plans to turn the vacant Ameritrust property into a $200 million complex of hotel rooms, residences, a new office tower and a smattering of stores.
The K&D Group would preserve the 29-story tower at East Ninth Street and Euclid Avenue, along with an historic rotunda next door, and incorporate them into what could be a 10-block transformation along the Euclid corridor.
"We're really trying to bring life back to the center of town, instead of spreading it out," chief executive Doug Price said Tuesday.
K&D was the only bidder Tuesday for the property, which Cuyahoga County bought in 2005 in what many considered a waste of taxpayer money.
County commissioners paid $22 million for the property, where they planned to build government offices. They invested about $15 million more before abandoning the plan and setting a minimum price of $35 million to sell.
K&D offered the county $35,005,000, and commissioners are expected to snap it up. In the end, the county will have lost about $3 million on the transaction.
Debate continued Tuesday about the prudence of the county's Ameritrust purchase. Some said commissioners acted shrewdly and economically to spur downtown development. Others said supporters were slapping a positive spin on an irresponsible decision.
The Ameritrust purchase would add a prominent and unusual property to K&D's collection of downtown projects. The company owns the Reserve Square complex on East 12th Street, developed the Stonebridge apartments and condos on the West bank of the Flats and is revamping a former department store at 668 Euclid Ave. into residences.
The company has a hand in so many downtown projects that, within two weeks, K&D plans to open a downtown office in Stonebridge Plaza.
"There's other properties we're looking at," Price said during an interview Tuesday after telling county officials about his plans for the Ameritrust site.
Those sites could include other buildings on or near Euclid Avenue. Downtown parking lot owner Lou Frangos, a partner with K&D in the bid, owns more than a dozen chunks of downtown property.
Frangos, head of the Frangos Group and founder of Cleveland's USA Parking Systems, already brought a piece of land to the deal. His property at Prospect Avenue and Bolivar, the former home of the New York Spaghetti House, could become a tower of 153 condos.
Price would not comment on future deals Tuesday, but he had plenty to say about the corner of Euclid and East Ninth. Under his plans, the tower, designed by Bauhaus architect Marcel Breuer, would house a boutique hotel of about 170 rooms, topped by about 200 residences.
Hotel visitors would enter the building through the connected historic rotunda, while tower residents would come in through the Breuer building's lobby. The adjacent building at 1010 Euclid Ave. likely would become office space or residences, said architect Robert Corna, who is designing this project and who worked with K&D on Stonebridge.
Nearby buildings at East Ninth and Prospect would come down, to be replaced by a contemporary office tower with as many as 20 floors. This building, comprising 250,000 to 400,000 square feet of top-shelf office space, could feature a rooftop restaurant, ground-floor retail, "green" features and a pedestrian bridge leading to the parking garage across Prospect.
K&D plans to pitch that tower to some of the major downtown office tenants whose leases end soon. That could pit Price against other major developers in a battle for tenants such as manufacturer Eaton Corp., Huntington National Bank, accounting giant Ernst & Young and law firms Baker & Hostetler and Square Sanders & Dempsey.
"We have had several conversations with K&D related to that, and we believe that there would be an interest in a mixed-use project which includes office space at that location," said David Browning, managing director at the Cleveland office of brokerage firm CB Richard Ellis, which represents many key office tenants.
K&D's potential investment can only help the market and boost downtown's image, said Adam Fishman, a principal with Fairmount Properties and a partner in developer Scott Wolstein's mixed-use project on the east bank of the Flats. That said, any new, top-shelf office building will add to the competition.
"There's a finite number of large office tenants that roam the streets these days," Fishman said, adding: "We're extraordinarily pleased with our position in the market as it relates to those handful of tenants."
Being the county's sole bidder doesn't necessarily lock things up for K&D. The county first has to accept the bid, and K&D has to finagle financing for the $35 million purchase, followed by the costly redevelopment and construction.
The company plans to explore a variety of tax credits, tax abatement options, city-sponsored tax increment financing and private sources of funding for the project, Price said.
"It's nothing we haven't done before," he said. "It's just a matter of getting it done."
