A Cleveland real estate development firm wants to redevelop the long-vacant, 108-year-old Berdan Building in Toledo's Warehouse District into market-rate apartments with help from the city by backing a $9 million federal loan.
Landmark RE Management LLC Wednesday presented its plan to a Toledo City Council committee to renovate the derelict building at 601 Washington St. near Fifth Third Field.
John Carney, a co-founder and managing partner of the firm that specializes in renovating historic buildings, said he started looking at the building 18 months ago.
Mr. Carney said a market study on the $18.5 million project showed it could be profitable.
"The big key to making these projects work, of course, is financing," he said.
Transformation of the Berdan Building has been proposed be-fore without success.
The largest component of the firm's proposed financing structure would be a $9 million Section 108 loan from the federal Department of Housing and Urban Development.
Landmark RE Management plans to request the loan be interest-only for the first four years.
Mr. Carney said the city would hold first position on the mortgage and that his firm would not guarantee the loan.
That means if the project were to become a failure, the city would be responsible for repayment but then would acquire ownership of the building.
The project also calls for $2 million of federal grant money from the Neighborhood Stabilization Program 2.
Bill Farnsel, executive director of Neighborhood Housing Services of Toledo, who also is on the stabilization program 2 consortium said that project must include units that only allow people making within a certain income range to live in those apartments.
The Landmark RE Management plan does not include any income-restricted apartments.
All 122 units, most of them one-bedroom, would be rented at market rate, Mr. Carney said.
In June, plans to transform the Berdan Building into upscale apartments won approval for more than $2.2 million in state tax credits.
Developers Joseph Swolsky and Robert Gersten, who converted the seven-story warehouse at 745 Washington St. into the Bartley Lofts condominiums, own the Berdan Building.
Councilman D. Michael Collins asked the Bell administration to provide a list all Section 108 loans the city has backed before moving forward with the Landmark RE Management request.
On June 29, council voted to allow the owner of the former Fiberglas Tower downtown to apply for a $10 million loan - also from the Section 108 Department of Housing and Urban Development - to move ahead with a plan to renovate the building into a mix of apartments, a hotel, and a restaurant.
The loan would be a piece of what could be a $44 million redevelopment plan.
But council learned Wednesday Eyde was denied $2 million over seven years for a federal Brownfield Economic Development Initiative grant that was to be used to pay the interest for the first seven years on that project's Section 108 loan.
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