South Side Site Gets Development Go-Ahead
A $28 million project to convert the former Goodwill headquarters on the South Side into apartments and retail space is good to go, thanks in part to a $5 million state redevelopment assistance grant.
The grant, awarded by Gov. Ed Rendell last week, will help close a gap in the financing and enable the project to move forward, city Urban Redevelopment Authority board members were told Thursday when they authorized the receipt of the money.
Green Tree developer Burns & Scalo Real Estate plans to convert the seven-story building on East Carson Street into 87 market rate apartments and 10,000 square feet of ground level retail space.
James Scalo, Burns & Scalo president, said he expects the apartments to rent for about $1,500 a month.
He said the state money will be used to help build a parking garage within the complex, an amenity he believes will be a big selling point. He said it would be the only residential project on the South Side with secure parking within the building.
With the money committed, Mr. Scalo said he hopes to start demolition work inside the building next month. Construction work is expected to start in April, with an opening slated for spring 2012.
Burns & Scalo will clean and preserve the facade and also seek to have the Renaissance Revival building listed on the National Register of Historic Places, in part to make the project eligible for historic tax credits, Mr. Scalo said.
Burns & Scalo came under some fire last summer when it received permission from the city Historic Review Commission to demolish an adjacent Goodwill building to make way for an Aldi supermarket.
Mr. Scalo said there’s a reason the developer is seeking to preserve the Goodwill headquarters while it demolished the other structure.
“This building has a lot of historic value. The other one did not,” he said. The structure used to be the mercantile store for the J&L Steel plant on the South Side.
Also Thursday, the URA board approved a deal that allows Cleveland-based Forest City Enterprises to make a $9 million lump sum payment to the URA to close out a $20.8 million loan dating back to 1984.
The loan was used to build Liberty Center, the 27-story skyscraper that houses the Westin Convention Center hotel and Federated Investors. Since the loan’s inception, Forest City had made about $9.5 million in payments. The developer, about three weeks ago, approached the URA about discontinuing $400,000 in yearly payments in exchange for one final lump sum amount.
In agreeing to the deal, the URA will be accepting about $2 million less than the original loan, not including interest. However, Rob Stephany, URA executive director, said there was a chance that future yearly payments, which were tied to cash flow, could decrease, depending on the tower’s occupancy and lease arrangements. He said Forest City originally offered $3.5 million as a lump sum payment.
A consultant hired by the URA also analyzed the deal and concluded that a $9 million buyout was a “very fair number.”
Mr. Stephany said the URA plans to reinvest the $9 million in city neighborhoods that are eligible for federal community development block grants.
“It’s a great opportunity for us,” he said