Two companies looking to redevelop landmark buildings in Toledo's business district gave optimistic assessments of downtown's future Wednesday, assuring City Council members they expect their projects to be a success.
Executives for Lansing-based Eyde Co. -- which owns the Fiberglas Tower on St. Clair Street -- and Landmark RE Management from Cleveland -- which seeks to renovate the Berdan Building at Washington and Huron streets -- addressed council and public concerns about their endeavors, which hinge on millions of dollars in government loans. Neither project has yet been approved by City Council.
Both companies seek $10 million loans from the U.S. Department of Housing and Urban Development, amounts that have to be backed by the city of Toledo. Each would also receive a $2 million government grant, and developers hope to secure state and federal historic tax credits to help pay for their projects.
Eyde Co., which has owned the Fiberglas Tower since 1998, hopes to turn the building into a mixed-use facility that would include office space, a hotel, a retail area, and apartments. The total cost of renovating the building, now renamed the "Tower on the Maumee," is estimated at $29.4 million, with about a third coming from the developer. Plans to build a 96-room Marriott Courtyard inside the building have been approved, the company's chief financial officer, Mark Clouse, said. The project is expected to create 368 permanent jobs.
Toledo's downtown has blossomed over the past decade, and the soon-to-be-opened casino along with other developments is spurring Eyde's belief that the time is right to move forward, Mr. Clouse said. He told councilmen, gathered for a committee hearing on the issue, that the company is heavily invested in the building, paying millions over the years to maintain it and cover property taxes. The company has also offered assurances that it will pay back the federal loan.
"We're here, we're anxious to move this project forward," Mr. Clouse said.
The $2 million HUD grant would be used to pay interest on the $10 million loan over the first seven years, giving the initiative time to take off, the executive explained. Should there be a default, the city would take possession of the tower.
Meanwhile, executives from Landmark RE Management also sought to assure city officials their project is viable. The company wants to buy the run-down Berdan Building and turn it into upscale apartment lofts, at an estimated cost of $21.9 million. Almost all that money would come from government sources. An application for the $10 million federal loan, which would be guaranteed by the city, is to be submitted to HUD soon. The firm's managing partner, John Carney, has said he cannot offer any assurances of repayment if the loan is approved.
At the meeting yesterday, several councilmen peppered the executives with questions about the project.
Councilman George Sarantou asked Mr. Carney if he is sure there will be enough demand to fill 123 planned apartments, which would be rented at between $692 and $936 a month.
"The answer, councilman, is yes, or we wouldn't be sitting here," Mr. Carney answered.
A representative for Advocates for Basic Legal Equality, attorney Thomas McCarter, expressed fears that Landmark could default on the loan, leaving the city to pay it back. If that happens, it could lead to a loss of money for community development and social service agencies, Mr. McCarter said.
He urged the city to underwrite the loan with certain guidelines that would not put those agencies at risk. "We would ask that you look at this seriously," Mr. McCarter said. "See if it is in reality a project that is viable and a project that the city wants to get involved in knowing what's at stake."
Councilman Adam Martinez also expressed doubts about the project, particularly because the company has invested little of its own money.
But Mr. Carney insisted his firm has a lot at stake in the Berdan initiative because it has to guarantee $7.2 million to private investors in the form of state and federal historic tax credits. The company also owes $250,000 in fees to the project's architect, he said.
"We are putting a lot of money on the line," Mr. Carney said. "We wouldn't be continuing to pursue this if we did not believe it was viable."
Contact Claudia Boyd-Barrett email@example.com or 419-724-6272.