|After facing complications in securing a $12 million city loan,|
it appears the nuCLEus development in downtown Cleveland
is back on track (Stark). CLICK IMAGES TO ENLARGE
Just last week, sources said all signs indicated that the $354 million project to build two 24-story towers between Prospect Avenue, Huron Road and East 4th Street had stalled. The delay apparently was the result of complications surrounding a $12 million loan from the city. It was among the final pieces of financing for the project.
But this week, a source says that real estate developer Stark Enterprises has significantly closed that $12 million gap without the city loan and is likely to close the remainder soon -- soon enough to tentatively plan an August groundbreaking for the mixed-use development. Two sources confirmed the August groundbreaking.
The complications surrounding the city loan also weren't what they seemed. Reports that the city was reluctant to give the loan to Stark because it wasn't going to pay workers prevailing wages, or that Stark was reluctant to accept the loan for the same reason don't hold water.
|NuCLEus will be a mixed-use development, with its|
uses stacked vertically. Its most prominent features
on the skyline will be its 354-foot-tall office tower
and its 311-foot-tall residential tower (Stark).
Even if Cleveland Construction wasn't a prevailing wage contractor, the construction market in Greater Cleveland is booming and demanding higher wages. So there isn't much difference right now between prevailing and non-prevailing wage firms.
Furthermore, Stark was awarded and is gratefully accepting other forms of public financing including loans and tax-increment financing from the city, county and state that are likely triggering prevailing wage requirements.
It should not be a surprise that Stark has closed the financing gap on nuCLEus, a project featuring a residential tower and an office tower atop a pedestal of structured parking and ground-floor retail. The reason is that Stark is quickly leasing out its downtown projects' residential, office and retail components.
|The Beacon apartment tower, as seen from the|
site where the much larger nuCLEus develop-
ment may soon soon rise (mack34/UrbanOhio).
Brian Weisberg, vice president of residential operations at Stark, said at the 5th Annual Commercial Real Estate Summit held June 27 that The Beacon is 60 percent pre-leased. Stark began soft-leasing (without advertising) The Beacon in February and immediately got 550 prospects for apartments in the 187-unit tower.
Weisberg said he anticipates leasing out The Beacon in the first year, despite commanding premium rents. A normal lease-out for a multi-family tower takes 18-24 months. He also noted that Stark is getting more interest for its downtown residential and office spaces than it is for its many suburban properties. NuCLEus will have 250 residential units, most of which will be apartments but some will be for sale.
In the other tower, two-thirds of nuCLEus' 400,000-square-foot office component is pre-leased, with the large law firm Benesch Friedlander Coplan & Aronoff as the anchor tenant. Stark's own offices will relocate to nuCLEus once it is completed. The national developer and capital group has temporarily relocated from 1350 W. 3rd St. to 629 Euclid Ave, Suite 1300.
There also is 80,000 square feet of ground-floor retail, with much of that leased out as well. The biggest portion will be occupied by Fox Sports Midwest, a national chain of sports and entertainment venues. Other retail tenants so far include HopCat and Starbucks Reserve. More are retailers coming, Weisberg said.