PLEASE READ!!!

***** ALL users will have to request a password reset BEFORE you will be able to log into the forum. See the thread in the forum issues section for further instructions. If you have issues with this, email us at admin@urbanohio.com. *****

Author Topic: Cleveland: Downtown: Stark's nuCLEus  (Read 49831 times)

0 Members and 2 Guests are viewing this topic.

Offline cadmen

  • Dirt Lot 0'
  • *
  • Posts: 16
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1500 on: August 21, 2017, 04:40:13 PM »
This is a complete and utter fallacy and I disagree wholeheartedly.  Reads like propaganda from a 4 post poster, just like the previous 2 post posters disagreement.

Excuse me if I'm a little skeptical on the coincidence of the low post count and Nucleus advocacy.

I can't speak for the other guy but I've been reading this site for years and tried posting a few times and had a very hard time doing it. I changed my sign-in and still have a hard time. I'm 65 and have trouble with technology. Sorry. but that doesn't make my position wrong or worse, part of some conspiracy you dreamed up.

I consider myself a card carrying liberal who is decidedly NOT a fan of corporations. But with the state of development in this town a developer needs all the help he can get.

Side Note: I recently took Amtrack from Dallas to San Antonio passing right through downtown Austin. I counted 9 construction cranes in the downtown core alone. And here we are pissing about trying to one lousy site going. Our growth is pathetic. I'm not saying construction cranes are the only barometer of economic growth but still....

Offline Cleburger

  • Jeddah Tower 3,281'
  • *****
  • Posts: 4473
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1501 on: August 21, 2017, 04:52:35 PM »
Cleveland hasn't seen growth like Dallas or Austin since the 1920's.  It may never again, though I hope for the best.  Until then, we have to get creative to get things done and try to get some kind of synergy going.  And in the meantime, the construction provides good ole' Cleveland blue collar jobs.   So why not?

Offline osu4brutus03

  • Metropolitan Tower 224'
  • *
  • Posts: 150
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1502 on: August 21, 2017, 05:28:21 PM »
What day this week does the CMSD vote on this issue?

On Tuesday, August 22nd

Offline old edale

  • Jeddah Tower 3,281'
  • *****
  • Posts: 4824
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1503 on: August 21, 2017, 08:39:56 PM »
I don't understand why such grand measures are being taken for this project. So it's not economically viable to build a 50 story residential tower in Ohio (surprise surprise). Why does the developer not downsize the project to make it something more in line with what the market can support and what the developer can get financing for? Doesn't anyone worry about the precedent this sets for other projects? NuCleUs isn't going to be some transformative project that sets Cleveland on a new path. It's a tall skyscraper which is why you all want to see it built, but it is just one building. Hasn't Cleveland been accused (and guilty) of chasing the big flashy projects instead of focusing on the basics of city building, like investing in transit, economic development, stabilizing hemoraging east side neighborhoods, etc? Furthermore, how is everyone so comfortable giving so much away to a developer who has shown a complete inability to actually build large urban projects?
« Last Edit: August 21, 2017, 09:18:28 PM by edale »

Offline Pugu

  • Burj Khalifa 2,722'
  • *****
  • Posts: 1790
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1504 on: August 21, 2017, 08:49:29 PM »
^edale, Cleveland is not "Ohio". Cleveland can support high rising housing and its currently all over the city, and there at least 2 or 3 projects in the works as we speak. At least on this website, such generalities are not meaningful and they do not characterize a place or its projects and capabilities.

Offline sir2gees

  • One World Trade Center 1,776'
  • ****
  • Posts: 801
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1505 on: August 21, 2017, 08:53:14 PM »
What grand measures are being taken? We're essentially talking a about tax abatement which is done all over the country.

Offline StapHanger

  • Jeddah Tower 3,281'
  • *****
  • Posts: 8600
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1506 on: August 21, 2017, 08:54:18 PM »
^edale, Cleveland is not "Ohio". Cleveland can support high rising housing and its currently all over the city, and there at least 2 or 3 projects in the works as we speak. At least on this website, such generalities are not meaningful and they do not characterize a place or its projects and capabilities.

He means the market supporting it on its own two feet, and he's right. The idea that it's a no-brainer to tax break our way to these vanity projects is a little gross to me. Highly unlikely there is anything "transformative" about this project, cool as it would be.

In fairness, what's being given away is hypothetical future property tax take, so it's not like the city is out of pocket if Stark flakes out again, and arguably won't be out of pocket if built, given the other tax revenues it would generate and the up front funds to the school.
« Last Edit: August 21, 2017, 08:54:49 PM by StrapHanger »

Offline old edale

  • Jeddah Tower 3,281'
  • *****
  • Posts: 4824
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1507 on: August 21, 2017, 09:08:52 PM »
^edale, Cleveland is not "Ohio". Cleveland can support high rising housing and its currently all over the city, and there at least 2 or 3 projects in the works as we speak. At least on this website, such generalities are not meaningful and they do not characterize a place or its projects and capabilities.

Lol!! Ok, Cleveland isn't Ohio.

Of course there is some high rise housing in Cleveland. There is also high rise housing in Cincinnati and Columbus. Doesn't change the fact that this type of development is rare in the state (or in Western Reserve or Connecticut Jr or whatever you want to call the state that Cleveland is in, since it's apparently not in Ohio). I believe NuCleUs would be the highest residential tower in Ohio, and probably one of the highest in the Midwest outside of Chicago. Of course it's going to be a stretch to get financing- especially for a relatively unproven concept in a slow to no growth market. Wouldn't you rather see 2-3 ~20 story buildings downtown than one super tall? Would that not do more to make downtownCleveland feel more lively? Also, wouldn't you rather subsidize a developer with a known track record of developing skyscrapers than Stark who has proven to be impotent when it comes to big projects? All I'm saying is don't let a flashy rendering and the thought of a new tower get in the way of common sense, good planning and stewardship of public funds.
« Last Edit: August 21, 2017, 09:20:00 PM by edale »

Offline sir2gees

  • One World Trade Center 1,776'
  • ****
  • Posts: 801
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1508 on: August 21, 2017, 09:28:29 PM »
Am I missing something here? What does the district lose? Possible revenue if something is built in the future without the special TIFF. If the TIFF isn't approved and Stark doesn't build anything the district potentially losses 18 million in up front money. Stark owns the land so there's a good chance nothing gets built there for a long time. I guess Stark could reduce the size of the project to get financing without the special TIFF. 
« Last Edit: August 21, 2017, 09:31:07 PM by sir2gees »

Offline KJP

  • Jeddah Tower 3,281'
  • *****
  • Posts: 49137
  • Rebuilding the cities that built America.
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1509 on: August 21, 2017, 09:29:06 PM »
I don't understand why such grand measures are being taken for this project. So it's not economically viable to build a 50 story residential tower in Ohio (surprise surprise). Why does the developer not downsize the project to make it something more in line with what the market can support and what th developer can get financing for? Doesn't anyone worry about the precedent this sets for othe projects? NuCleUs isn't going to be some transformative project that sets Cleveland on a new path. It's a tall skyscraper which is why you all want to see I built, but it is just one building. Hasn't Cleveland been accused (and guilty) of chasing the big flashy projects instead of focusing on the basics of city building, like investing in transit, economic development, stabilizing hemoraging east side neighborhoods, etc? Furthermore, how is everyone so comfortable with giving so much away to a developer who has shown a complete inability to actually build large urban projects?

Did you see how much Stark (or the previous owner) paid for these high-revenue parking lots? No new construction residential project downtown can be supported without subsidy as long as the suburbs are subsidized albeit by different means (new infrastructure). These residential projects are being fully occupied at the current market rental rates. However no new construction project can be justified, absent subsidy, on these high-valued surface parking lots. If you want to see these lots built upon, it will require a large amount of public subsidy. Downtown Cleveland is a costly place to build, but with low rents despite that a sizable market of people want to live there, even with the still-limited number of services and amenities there.
« Last Edit: August 21, 2017, 09:30:59 PM by KJP »
"Many Americans are willing to die for their country. But pay taxes for it? No way." -- Me.

Offline mam178

  • Dirt Lot 0'
  • *
  • Posts: 27
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1510 on: August 22, 2017, 08:15:50 AM »

It can't get both a tax abatement and a TIF. That is just not how tax financing works.  If you don't understand it that's fine, but please don't advocate for a position you don't quite understand...

Not to put words in bumsquare's mouth, but these are terms of art in Cleveland, so you absolutely can get both. Abatement in this context is the as-of-right tax abatement of additional city-imposed property taxes for residential development. The same thing every new house and every new apartment building gets. The TIF is the discretionary exemption that applies to the additional city property taxes on the non-residential portion and, in this particular case, but few others, the additional school district property taxes on the whole project.
Ur better at words than me. Like I said upthread from Michelle:

"The city previously approved forgivable loans for nuCLEus to help with demolition and site clean-up. Apartments and condos in the complex will be eligible for 15 years of property-tax abatement under a widely used city program meant to encourage residential construction."

I don't think this changes my point. The commercial components would be TIF'ed, residential abated. I am pretty sure the residential abatement is approved administratively, and the TIF has to be legislated each time. Stark could build a residential project here that would be successful (with an abatement). A more dynamic project requires more creative financing solutions, but they are still making payments under a TIF. An abatement means they don't owe anything due to any increased value.

EDIT: Stated another way, my point is they can't have the privilege of not paying taxes and having the power to bond out tax payments on the entire project. I get that residential can be abated, but it would be abated no matter what because the administration would approve it. Plus the schools and the City are already getting tax revenue from the lots as-is. A TIF just means for the life of the bond their tax payments (on the commercial portion) service debt, not the schools or the City.
« Last Edit: August 22, 2017, 08:22:52 AM by mam178 »

Offline inlovewithCLE

  • Great American Tower 665'
  • ***
  • Posts: 665
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1511 on: August 22, 2017, 08:36:46 AM »
The lunacy of opposing this project is just amazing. The idiocy of fighting for tax dollars that CMSD WOULD NEVER GET ANYWAY and losing the opportunity to turn the upfront money into more schools is AMAZING to me. It just blows my mind how dumb people can be. This mystical, magical tax money that CMSD is losing on, they would never get anyway because I GUARANTEE you that project will not be built without this TIF. I went to one of the meetings, and Stark is threatening to build it in the suburbs if we don't approve the TIF. Now anybody who has seen his work in the suburbs knows that he can do just that. I'm glad that 60 percent of the people who responded on the CMSD survey are not idiots and approved of a no lose situation. But if people in the city want to be fools and blow yet another major project fighting over money that doesn't exist, they will set this city back for years and years to come. (By the way, I live in the city too AND I pay taxes in the city as well)

Offline YABO713

  • Jeddah Tower 3,281'
  • *****
  • Posts: 3253
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1512 on: August 22, 2017, 08:42:27 AM »
I'm all in favor of NuCLEus getting the money... Provided they make over 50% of the units condominiums and not apartments.

I think it's fundamentally unfair to ask for that amount of money - from the school district at that - if there is not a more stable investment being made. Putting equity downtown will hedge some issues if there is an apartment bubble, which there inevitably will be at some point.

Offline RE Developer In Training

  • Dirt Lot 0'
  • *
  • Posts: 58
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1513 on: August 22, 2017, 08:52:40 AM »
Anyone know what time the board is voting on this?  It sounds like whatever the board votes on, the city council will follow.  So it's a big day.

Offline osu4brutus03

  • Metropolitan Tower 224'
  • *
  • Posts: 150
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1514 on: August 22, 2017, 08:55:58 AM »
Yes it is

Offline Htsguy

  • Jeddah Tower 3,281'
  • *****
  • Posts: 2660
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1515 on: August 22, 2017, 08:59:44 AM »
^The meeting starts at 6:30 pm tonight.

I don't know if I necessarily agree with you about city council.  They have been pretty quiet  so far.  I am sure eventually there will be the usual grandstanding, especially since this is an election year.

Offline StapHanger

  • Jeddah Tower 3,281'
  • *****
  • Posts: 8600
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1516 on: August 22, 2017, 09:13:19 AM »
EDIT: Stated another way, my point is they can't have the privilege of not paying taxes and having the power to bond out tax payments on the entire project. I get that residential can be abated, but it would be abated no matter what because the administration would approve it. Plus the schools and the City are already getting tax revenue from the lots as-is. A TIF just means for the life of the bond their tax payments (on the commercial portion) service debt, not the schools or the City.

Maybe it's semantic at this point, but for the reason you're stating, those service payments aren't "taxes" in any meaningful sense now. Putting aside the school payment, he's both legally and substantively getting a full abatement or exemption on all the additional assessed value, full stop. The fact that he has to service the federally subsidized port authority bonds is no different from him paying off his private construction loans. You can say he's still spending the money, not pocketing it, and maybe that's all you mean, but that's a slightly different point.  This isn't a traditional TIF where the bonded money is going to associated public infrastructure that otherwise would be paid for with tax money.

and Stark is threatening to build it in the suburbs if we don't approve the TIF.

 :roll:


Offline gottaplan

  • Jeddah Tower 3,281'
  • *****
  • Posts: 4320
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1517 on: August 22, 2017, 09:20:44 AM »
It's too bad there isn't an economic impact breakdown that could be shared & debated publicly.  We put these types of analysis spreadsheets together in grad school for similar projects - they are used to balance the public incentives.  I'm sure one exists - put it out there, let people hash it out.  If the project has a real impact on public benefit, it will come out in the numbers.

Offline bumsquare

  • One World Trade Center 1,776'
  • ****
  • Posts: 1037
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1518 on: August 22, 2017, 10:15:31 AM »
It's too bad there isn't an economic impact breakdown that could be shared & debated publicly.  We put these types of analysis spreadsheets together in grad school for similar projects - they are used to balance the public incentives.  I'm sure one exists - put it out there, let people hash it out.  If the project has a real impact on public benefit, it will come out in the numbers.
It'd be interesting to see the market study. Especially for the retail component.

Offline DeanSheen

  • Great American Tower 665'
  • ***
  • Posts: 587
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1519 on: August 22, 2017, 10:15:55 AM »
Am I missing something here? What does the district lose? Possible revenue if something is built in the future without the special TIFF. If the TIFF isn't approved and Stark doesn't build anything the district potentially losses 18 million in up front money. Stark owns the land so there's a good chance nothing gets built there for a long time. I guess Stark could reduce the size of the project to get financing without the special TIFF. 

Yes you are missing the 100million plus in future taxes that CMSD will forgo.

ANd the number is 18 million NOT 54 million as stated upthread.


Offline DeanSheen

  • Great American Tower 665'
  • ***
  • Posts: 587
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1520 on: August 22, 2017, 10:18:21 AM »
The lunacy of opposing this project is just amazing. The idiocy of fighting for tax dollars that CMSD WOULD NEVER GET ANYWAY and losing the opportunity to turn the upfront money into more schools is AMAZING to me. It just blows my mind how dumb people can be. This mystical, magical tax money that CMSD is losing on, they would never get anyway because I GUARANTEE you that project will not be built without this TIF. I went to one of the meetings, and Stark is threatening to build it in the suburbs if we don't approve the TIF. Now anybody who has seen his work in the suburbs knows that he can do just that. I'm glad that 60 percent of the people who responded on the CMSD survey are not idiots and approved of a no lose situation. But if people in the city want to be fools and blow yet another major project fighting over money that doesn't exist, they will set this city back for years and years to come. (By the way, I live in the city too AND I pay taxes in the city as well)

And yet you fail to make a case for WHY this project must be built and WHY it must be built to these specifications.

Cleveland taxpayers have no OBLIGATION to STARK.


Offline sir2gees

  • One World Trade Center 1,776'
  • ****
  • Posts: 801
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1521 on: August 22, 2017, 10:22:15 AM »
^100 million in future taxes that may never happen. I'm 36 and that lot has been a parking lot my entire life. Stark owns the lot, he could sit on that lot indefinitely collecting revenue from parking. The district would lose 18 million if that happens. That's something we can actually quantify.
« Last Edit: August 22, 2017, 10:26:20 AM by sir2gees »

Offline mrnyc

  • Jeddah Tower 3,281'
  • *****
  • Posts: 13241
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1522 on: August 22, 2017, 10:26:29 AM »
well its a big day, fingers crossed the school board goes for this creative and transformative project.



I'm all in favor of NuCLEus getting the money... Provided they make over 50% of the units condominiums and not apartments.

I think it's fundamentally unfair to ask for that amount of money - from the school district at that - if there is not a more stable investment being made. Putting equity downtown will hedge some issues if there is an apartment bubble, which there inevitably will be at some point.


agreed, but not about any set percentage. ownership is unusual in downtown to date and has to be demonstrated. with the demand for downtown living as high as it is i dont think they would have any problems selling, but that remains to be seen. also, frankly its a complicated enough project as it is, so even if none are offered now, with the ability to convert to ownership at some point imo that would be fine.

Offline gottaplan

  • Jeddah Tower 3,281'
  • *****
  • Posts: 4320
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1523 on: August 22, 2017, 10:38:05 AM »
I'm going to go ahead & say the school board approves the measure but the project still doesn't kickoff this year.

Offline Htsguy

  • Jeddah Tower 3,281'
  • *****
  • Posts: 2660
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1524 on: August 22, 2017, 10:43:26 AM »
^Doesn't city council have to approve the TIF as well, or is Stark going to council for other public subsidies?

Offline nab70

  • Dirt Lot 0'
  • *
  • Posts: 22
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1525 on: August 22, 2017, 10:51:03 AM »
The lunacy of opposing this project is just amazing. The idiocy of fighting for tax dollars that CMSD WOULD NEVER GET ANYWAY and losing the opportunity to turn the upfront money into more schools is AMAZING to me. It just blows my mind how dumb people can be. This mystical, magical tax money that CMSD is losing on, they would never get anyway because I GUARANTEE you that project will not be built without this TIF. I went to one of the meetings, and Stark is threatening to build it in the suburbs if we don't approve the TIF. Now anybody who has seen his work in the suburbs knows that he can do just that. I'm glad that 60 percent of the people who responded on the CMSD survey are not idiots and approved of a no lose situation. But if people in the city want to be fools and blow yet another major project fighting over money that doesn't exist, they will set this city back for years and years to come. (By the way, I live in the city too AND I pay taxes in the city as well)

And yet you fail to make a case for WHY this project must be built and WHY it must be built to these specifications.

Cleveland taxpayers have no OBLIGATION to STARK.

That's fine because you have failed to make a case for WHY the school district is better off receiving $0's than it would be receiving $54 million. But I'll give the why this project must be built a shot anyway. This project must be built because it will create 500 new apartments downtown and revitalize the stretch of east 4th between east 4th street and the Q and because without this project the school district won't get an extra $54 million to help build two or three more schools. To summarize: the city either gets one new skyscraper and three new schools or most likely it gets nothing.

Am I missing something here? What does the district lose? Possible revenue if something is built in the future without the special TIFF. If the TIFF isn't approved and Stark doesn't build anything the district potentially losses 18 million in up front money. Stark owns the land so there's a good chance nothing gets built there for a long time. I guess Stark could reduce the size of the project to get financing without the special TIFF. 

Yes you are missing the 100million plus in future taxes that CMSD will forgo.

ANd the number is 18 million NOT 54 million as stated upthread.

They will forgo $0 in future taxes unless you believe this will get built without the tif. The number is $54 million for those of us who are looking at this from the perspective of how it affects the SCHOOL DISTRICT and downtown not from the perspective of sticking it to evil developers (unless you have inside knowledge that the state is going to end the 2-1 program in the next few months you want to share). I honestly feel like that statement that the number is $18 million not $54 million perfectly encapsulates so much opposition to this thing. People who support this project view it as "well the school district gets $0 or it gets $54 million (and downtown gets a huge development or probably nothing but a parking lot crater)" while people who oppose it see "well big bad developer stark is forced to pay his fair share of $130 million over 30 years or only $18 million".
« Last Edit: August 22, 2017, 10:57:36 AM by nab70 »

Offline AJ93

  • Jeddah Tower 3,281'
  • *****
  • Posts: 3777
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1526 on: August 22, 2017, 10:53:28 AM »
I haven't seen any financials on this project, so I'm speaking very generally here, but I have not heard a solid response as to why the costs are double the final appraised value of the property. Also, what is the project expected to generate in Net Operating Income when it's stabilized. If I were on the school board or city council I'd want to look at the pro-formas and the appraisal to determine where the discrepancy lies. Maybe they have. Typically, with new construction, your completed value is the same or potentially more than the cost to construct. When appraiser's value new construction they rely on cost analysis as well as the value as a function of the income the property generates when stabilized (i.e. at a level of occupancy that it is self sufficient). They also look at sales comps for recent, similar transactions (i.e. the recent sale of key tower).

Now, I recognize there is a large embedded cost associated with acquiring a revenue producing parking lot in the CBD, however, that isn't going to tell the whole story with regard to a project of this size. There's also the soft costs (engineering, architecture, CM fees, financing, legal, etc.) that don't equate dollar for dollar to value. However, I'd be very interested to see what valuation they're using. Is it as completed but not yet stabilized? If it's the fully stabilized value I'd have a lot of questions as an investor as to what benefit we're going to see for a project with such high costs. Is this truly a vanity project that could be replicated with a lower cost, yet still functional and revenue producing building? Is this the best use of our equity?

I'm not against having this TIF, if everyone goes into it with all of the information necessary to make the decision. If I were the board, I'd want to look and see what the projected revenues are, and the NOI associated with the project over the next 5-10 years, and the debt service coverage. They could consider some kind of cash flow recapture where if the project exceeded certain benchmark performance metrics, the project would be required to pay certain amounts back to the school district.

Again, I  haven't delved into this that deeply, but if the city / schools is expected to essentially invest in this project, they should be able to reap some of the rewards as well.


Offline bumsquare

  • One World Trade Center 1,776'
  • ****
  • Posts: 1037
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1528 on: August 22, 2017, 11:11:53 AM »

I'm not against having this TIF, if everyone goes into it with all of the information necessary to make the decision. If I were the board, I'd want to look and see what the projected revenues are, and the NOI associated with the project over the next 5-10 years, and the debt service coverage. They could consider some kind of cash flow recapture where if the project exceeded certain benchmark performance metrics, the project would be required to pay certain amounts back to the school district.

Again, I  haven't delved into this that deeply, but if the city / schools is expected to essentially invest in this project, they should be able to reap some of the rewards as well.
I think this is all reasonable. The city/school district has to be able to squeeze out the best possible deal for the public.

Offline YABO713

  • Jeddah Tower 3,281'
  • *****
  • Posts: 3253
Re: Cleveland: Downtown: Stark's nuCLEus
« Reply #1529 on: August 22, 2017, 11:13:31 AM »
I'm going to go ahead & say the school board approves the measure but the project still doesn't kickoff this year.

........... What leads you to believe a Stark project wouldn't start on time.........