The brokerage firm has signed a long-term lease on 17,000 square feet in a planned office tower on the east bank of the Flats. The Wolstein Group and Fairmount Properties are pushing to close on financing for their $275 million first phase before the end of the year.
View full sizeCB Richard Ellis has signed a lease to occupy at least 17,000 square feet in an office building where Ernst & Young and Tucker Ellis & West plan to be major tenants. Developers of the Flats East Bank hope to close on their financing this year and to finish the building in spring 2013.CLEVELAND, Ohio -- Another office tenant has signed on to the long-delayed Flats East Bank project, whose developers are pushing to close on their financing by year's end.
The CB Richard Ellis real estate brokerage plans to move its downtown Cleveland offices to the east bank of the Flats, where the Wolstein Group and Fairmount Properties still hope to construct the $275 million first phase of a waterfront project by spring 2013.
The Flats development stalled when the economy soured, but it appears close to re-emerging thanks to a complex web of support from the public and private sectors.
Wednesday, members of the Cleveland-Cuyahoga County Port Authority agreed to issue bonds for an 18-story office building, a 150-room Aloft hotel, a parking garage and public spaces. The bonds are part of a financing deal that must close this year under a federal economic stimulus program that lets otherwise-taxable bonds for private development be issued as tax-exempt bonds -- enabling more bonds to be issued, at a lower rate.
"We're through a lot of the hurdles that are necessary to get us to closing," Steve Strnisha, a financial consultant on the project, said in an interview.
According to port documents, CB Richard Ellis plans to join Ernst & Young and law firm Tucker Ellis & West in the Flats office tower in 2013. The real estate firm's local offices are in the former BP Tower, at 200 Public Square, and the Hanna Building, in PlayhouseSquare. CB Richard Ellis employs roughly 150 people in Northeast Ohio, and more than 60 of them work out of the two downtown locations.
David Browning, managing director in Cleveland, said the real estate company has signed a long-term lease for at least 17,000 square feet in the Flats office building.
"This is clearly a project that we have been instrumental in," Browning said. "We procured both anchor tenants. We have a longstanding relationship with the Wolstein family . . . as well as Fairmount Properties. We will be the property manager for the project when it's built.
The port's vote sets the stage for $108.9 million in taxable first-mortgage bonds, which will help fund construction of the office building, the hotel and retail. The bonds will be purchased by Wells Fargo; the Ohio Realty Development Fund, a carpenters union pension fund; and the Cleveland International Fund, which helps foreign investors obtain U.S. residency in exchange for putting money into projects that create American jobs.
The port also approved language related to $11 million in city of Cleveland tax-exempt bonds, related to acquisition and improvement of public spaces. Neither piece of financing is new, but the developers needed to clarify some details and provide firm numbers on the first-mortgage bonds.
The complete Flats deal involves more than 30 funding sources, including the city, Cuyahoga County, the state, developer Scott Wolstein and his mother, Iris.
At the meeting Wednesday, the port's board also approved a deal to issue bonds for a project on East Sixth Street in downtown Cleveland. CRM Real Estate Services, of Cleveland, is renovating the vacant East Ohio Gas Co. building to house Calfee, Halter & Griswold, a law firm. The $35 million project is scheduled to be finished by fall 2011
Plain Dealer reporter James F. McCarty contributed to this story.