MRN Ltd. has closed on its financing and plans to break ground Monday for the $44.5 million first phase of its Uptown project in University Circle. The 102 apartments, stores and restaurants could be finished in fall 2011.
View full sizeA view of the proposed Uptown apartment buildings from East 115th Street. The J-shaped buildings will comprise 102 apartments above first-floor stores, service businesses and restaurants. CLEVELAND, Ohio -- After decades of discussions and nearly five years of planning, a developer finally is ready to build homes, stores and restaurants along Euclid Avenue in University Circle.
MRN Ltd. closed today on its financing and plans to break ground Monday for the $44.5 million first phase of its long-anticipated Uptown project. Two buildings, comprising 102 apartments over retail space, will sit at the heart of $300 million-plus in ongoing and planned development radiating from Euclid at Mayfield Road. The apartments will replace a dusty parking lot and a dingy shopping strip at East 115th Street, across from the expanding Cleveland Institute of Art.
At Mayfield, the Museum of Contemporary Art Cleveland has designs for a new building. Town houses in the neighborhood are selling despite the troubled housing market. And stakeholders and developers are planning projects that include a mixed-use transit center, a hotel, new and renovated student housing, luxury apartments and offices.
For University Circle, putting shovels in the ground for Uptown marks a tipping point. The project is smaller than the proposals floated several years ago. It specifies apartments instead of condominiums and will be built in phases, rather than one big bang. But Uptown survived a recession and a financing crisis that turned other potential developments to dust.
"In this economy, we don't take anything for granted. Right up until ground-break, there's always been concern that something wouldn't come together," said Chris Ronayne, president of University Circle Inc., a community development group that partnered with Case Western Reserve University to assemble land for Uptown. "I think if we've done it here, some of our plans can be taken off the shelf and other shovels can hit the ground in Cleveland."
View full sizeA public space with outdoor restaurant seating will be part of the first phase of the Uptown project. The alley will run along the south side of the southern apartment building, next to the existing Triangle apartment towers owned by Case Western Reserve University. MRN, the development arm of the Maron family, turned East Fourth Street into an entertainment district. The Marons also are reviving the old United Bank Building in Ohio City, near the West Side Market, and turning the imposing Tudor Arms building at Carnegie Avenue and East 107th Street into a Doubletree hotel.
At Uptown, the Marons plan to build apartments aimed at nurses, doctors, graduate students and professors. A Barnes & Noble bookstore and other, unidentified businesses will fill the ground floor of the building north of Euclid, while restaurants ranging from quick food to fine dining will line the south side of the avenue. The Marons envision tucking an entertainment alley between that building existing residential towers owned by CWRU.
Partner Ari Maron said MRN hopes to erect the building shells before winter and to open the buildings in fall 2011.
"The credit is to an unprecedented group of private banks, civic organizations, nonprofit organizations and amazing community partners coming together and really sticking with this thing for, in some cases, almost three years," he said.
The complex deal involves loans from KeyBank and FirstMerit Bank; loans and grants from the Cleveland and Gund foundations; a loan from Village Capital Corp. of Cleveland; $5 million in loans from the city of Cleveland, which separately will spend $2 million to build the entertainment street; and New Markets Tax Credits from Enterprise Community Investment, a national lender, and from Cleveland Development Advisors, an affiliate of the Greater Cleveland Partnership.
Those federal income tax credits, awarded to community-development entities by the U.S. Treasury, can be sold to bring more equity to a project. That equity, in turn, lowers the risk for banks that provide loans to the developer. In the case of Uptown, New Markets also helped MRN secure a $9 million loan from KeyBank at a lower interest rate.
"It's important in real estate, I think, to build on strengths," said Steve Luca, managing vice president for Cleveland Development Advisors. "Putting a drop into the river and hoping that things happen is kind of difficult. You're using limited resources, and you have to make sure that the environment you're putting them into can succeed. And that's what you see here with Uptown."