Long-standing plans to renovate the vacant Fiberglas Tower on St. Clair Street downtown took a giant leap toward the possible Thursday, with the awarding of a $2 million federal grant for the project and the expected approval of a $10 million loan.
The U.S. Department of Housing and Urban Development announced the grant, which spokesman Brian Sullivan said almost guarantees approval of a City of Toledo request to get a $10 million federal loan for the structure, now renamed The Tower on the Maumee.
The funds are key to helping the building's owners, the Lansing-based Eyde Co., finance a total of $29.4 million in renovations, which include the creation of office space, a hotel, a retail area, and apartments. Remaining funds still must be secured from the private sector and through tax credits, Eyde Co. partner Nick Eyde said.
"We're thrilled and excited about the news," Mr. Eyde said, explaining that the federal money is a crucial component in securing the additional funding for the project and the commitment of businesses to move into the space once it's renovated.
"This is perfect timing to hear this now," he said.
The planned renovations for the 30-floor, 400-foot-tall building include the creation of 140,371 square-feet of office space on 11 floors, a 96-room Marriott Courtyard hotel on seven floors, and a lobby area with retail and restaurants. A second phase of the project would add 81 apartments on nine floors.
The project is expected to create 368 permanent jobs.
Mr. Eyde said his company is close to finalizing an agreement with Marriott to establish a hotel in the building. Several businesses have expressed interest in taking up retail and office space there, he added. Eyde Co. aims to begin the renovations in October, 2012.
The 400-foot Fiberglas Tower, built in 1969, has been vacant since 1996.
If the project moves ahead, it would be a huge boost to the city of Toledo's efforts to revitalize the downtown area, Deputy Mayor Tom Crothers said Thursday.
The structure, built in 1969, has been vacant since 1996 when Owens Corning abandoned the building for its headquarters on the riverfront. Eyde Co. has worked to remove asbestos from the building with the help of a $3 million grant from the Clean Ohio Revitalization Fund.
"The tower is the tallest building in our downtown and it's been darkened for many, many years," Mr. Crothers said. "We are very, very encouraged by this news. This is a major component in the financing for this signature project in our downtown."
Toledo City Council still must vote to accept the HUD grant and to designate the $10 million in federal loan monies for the project. Of the $2 million grant, $1.2 million would be used to pay back the first seven years of interest on the $10 million loan. The other $800,000 would go toward the construction.
The federal money is part of $13.3 million in grants announced Thursday for brownfield projects in six cities across the country.
Some councilmen have expressed caution about approving the loan because, if the project fails, taxpayers would be on the hook to repay it. However, the city also would have "first mortgage position" on the building, meaning it then would own the structure.
"I'm excited to see this project get developed. I just want to be sure we're using taxpayer money in an appropriate way," Councilman Adam Martinez said. "I think there is a long laundry list of things to do before the project can even move forward. But I'm certainly supportive of the development concept."
Councilman George Sarantou expressed similar support for the renovation plans, but said he wants to see the results of a marketing study on the project to determine its chances of success. He recalled past downtown development projects that left the city holding the bill.
Toledo sold bonds in the late 1990s to help finance the redevelopment of the former Hillcrest and Commodore Perry hotels into rental apartments for market-rate and lower-income tenants. Expenses soon outpaced revenues at both the apartment buildings, eventually leaving the city responsible for debt payments.
"I'm not interested in bankrolling a project that has a very high chance of failure," Mr. Sarantou said. "We've been down that road before, so we have to be very, very careful."
Mr. Eyde said he expects to address council and city administrators in the coming weeks to update them on his company's plans for the tower and their progress in securing additional financing.
He said Eyde Co. executives are excited by other developments in downtown Toledo and are confident their project will be successful.
"With all the momentum that's been generated downtown, the activity down there has prompted us to say: 'This is the right time to do this,'" Mr. Eyde said. "We see a bright future in Toledo."
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