Uptown is a fraction of the size of the Cleveland International Fund's other projects, including the Flats East Bank in downtown Cleveland and construction for University Hospitals. The second phase of Uptown will be finished in late summer or fall 2014.
CLEVELAND, Ohio -- In the melting pot of Cleveland's University Circle, a developer plans to mix international investment and a classic Cleveland pastime.
MRN Ltd., the developer behind the Uptown apartment-and-retail project, has secured a $5 million loan commitment from the Cleveland International Fund and plans to use that money to finish spaces for tenants including the Corner Alley. The downtown bowling alley will expand to Uptown next year, joining a Potbelly Sandwich Shop and other potential tenants at Euclid Avenue and Ford Drive.
The deal brings an entertainment component to Uptown, where apartments in the first two buildings are 100 percent leased and the third building will be finished in late summer or fall of 2014. And the loan shows that the Cleveland International Fund, which pairs foreign investors with local real estate developments, is exploring smaller projects as it expands its fundraising footprint.
The last piece of financing for Uptown's $21 million second phase, the fund's loan will cover construction costs including work on tenant spaces -- something traditional lenders are reluctant to touch. The Maron family, the people behind MRN, assembled loans, tax credits and money from the Cleveland Institute of Art to build phase two, which includes 43 apartments and dorms for the art institute over high-ceilinged retail space.
View full sizeAn ironworker works on the third residential-and-retail building at the Uptown project on Wednesday. Ari Maron, whose family is developing the project, said apartments in the first two buildings are 100 percent leased, with a waiting list of several hundred people. ABC the Tavern and Cleveland Yoga recently joined other restaurants and businesses at the project. The Corner Alley, an anchor at the family's East Fourth Street neighborhood, is planning a two-story venue at Uptown.
With 17 lanes in roughly 22,000 square feet, the University Circle spot will be larger than its downtown cousin and will offer a more eclectic, healthier menu, said Christine Connell, who runs MRN's food and beverage businesses with chef Todd DiCillo.
"It's such a social sport," said Ari Maron, who will co-own the business with his brother, Jori. "It's a big part of the Cleveland DNA."
After all, Cleveland Mayor Ralph Perk's wife, Lucille, made headlines in 1972 when her husband said she skipped a White House event because it was her bowling night.
"I can imagine families wanting to come to University Circle for Wade Oval Wednesday and then going to bowl at the Corner Alley," Maron said. "I think students will be attracted to it. It's a great sport for professors and folks who work at the hospitals. It's one of those things that creates a socially engaged neighborhood."
Steve Strnisha, chief executive officer at the international fund, expects the project, the location and the Maron family's story to resonate with overseas investors. The fund is part of a federal program that offers wealthy foreigners and their families U.S residency if they put money into projects that create jobs in Cuyahoga County. Each investor must provide $500,000, spurring the creation of at least 10 jobs.
Uptown needs only 10 investors whose money leads to 100 or more jobs -- a smaller task than the fund took on as a lender to the Flats East Bank project in downtown Cleveland and University Hospitals, which was remaking its campus.
Strnisha said the fund is using the Uptown pitch to stretch beyond China, the most fertile ground for immigrant investors, into new markets including Poland. If the formula works, the Cleveland International Fund could make loans to fill financing gaps for other neighborhood projects.
"There are a lot more $20 million to $25 million projects like this than there are Flats (projects)," Strnisha said. "We hadn't even looked at projects of this scale before. I think we'll find enough like Uptown that we can sell them overseas and keep our portfolio moving. It's very important, in our mind, to stay in the market and keep bringing investors into our funds."
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