Downtown Apartment Conversion Nets $5M Historic Tax Credit

Eric Heisig, cleveland.com

The Ohio Development Department on Tuesday announced the award of a $5 million tax credit to help developers turn the vacant former home of Ohio Bell into a downtown Cleveland apartment building.

The state awarded a Historic Preservation Tax Credit to the renovations set for 45 Erieview Plaza at the southeast corner of East 9th Street and Lakeside Avenue, next to the Galleria. The building was once the headquarters for Ohio Bell Telephone Co. (now known as AT&T Ohio) and has sat vacant since October 2019, when AT&T moved out.

The $102 million plan is to add 368 apartments and amenities, including a gym and an outdoor pool, said Ike Bams, who with his partners plan to buy the building from current owner Somera Road. Lower floors will include storefronts and enough office space for one tenant. Construction is slated to take about two years.

It was one of two dozen projects receiving a combined $36.2 million worth of historic tax credits that the Development Department announced Tuesday. Six projects in Northeast Ohio received $12.3 million, including three in Cleveland, one in Akron and two in Canton. The 45 Erieview Plaza project was one of three to receive the $5 million tax credit, the largest of any on the list.

The New York-based Somera Road bought 45 Erieview Plaza in 2016 for $36 million. Bams and partners John Williams – who runs Blueloft with him – and Kenny Wolfe all hail from Dallas. Bams said the plan is to close on their purchase of the 16-story building and start renovations by the end of March.

The building was completed in 1983. The project is eligible for historic tax credits because it is part of the Erieview Historic District, an area of downtown that was added to the National Register of Historic Places in February. Its application for the state tax credits also said the project received a $15 million federal historic tax credit.

The district also includes Galleria and Erieview Tower, which owner James Kassouf plans to turn into apartments, office space and a W Hotel run by Marriott International.

“I think the area has a lot of potential,” Bams said, citing the proximity to FirstEnergy Stadium and the lakefront.

The awarding of the Historic Preservation Tax Credits is part of a highly competitive process, and this week marked the 27th time the agency awarded them. The state agency doles out the credits twice a year.

Like with many other rounds, several applicants in the Cleveland applied but did not receive the requested tax credits. Statewide, 49 projects seeking a total of $86.1 million worth of tax credits applied.

Applicants must prove the project would not go forward but for receiving the tax credits.

Other projects in Cleveland and Akron awarded the tax credits include:

Consolidated Fruit Auction Co. Building, 601 Stones Levee

The state awarded an $815,000 tax credit to a renovation project undertaken by distiller Cleveland Whiskey to turn the 110-year-old warehouse into its new home. The warehouse sits on 80 acres along Stones Levee Road on the east bank of the Cuyahoga River below the Hope Memorial Bridge. The site will include distillery operations, a bar, restaurant, store and offices.

Cleveland City Council in February approved landmark status for the building, which dates to 1911, thus allowing the owners to apply for historic tax credits. Council this month also passed legislation that extends city tax incentives to the roughly $8.2 million project.

Agora Theatre complex, 5000 Euclid Ave.

The agency awarded a $250,000 credit for $2 million worth of renovations to a building in the complex at 4900 Euclid Ave, as well as the second and third floors of the Central United National Bank Building, into 35 market-rate apartments. The Midtown complex, which was once home to WHK Studio One and a recording studio, is attached to the Agora Theatre, which is owned by Los Angeles-based promoter AEG Presents.

The complex sold for $1.7 million in January to a partnership between the Hungary-based Sabor Group and Renew Partners of Chardon. The state in June also awarded a $250,000 tax credit for rehab work on the complex’s east wing for future office space and plans to seek further incentives in the next round for renovations to the west wing.

Philadelphia Rubber Works Co. Building, 123 W. Bartges St., Akron

Kaulig Osborne Development Co. plan to renovate the sprawling 150,000 square foot property, located in Akron’s B.F. Goodrich Co. Historic District. They plan to add 97 apartments and a 6,000-foot fitness center for a company the state redacted from the application it released. It is designed to be another addition to an area that already boasts Canal Place and its restaurants, breweries, offices and stores.

The application says the project will cost $40.3 million and take two years to complete.