Keeping downtown Toledo's historic and unique building stock intact is a challenge of will and financial means - as was the struggle to get those grand structures off blueprints and in the ground.
"Scores of hotels were built on paper, but one by one, the projects fell through. No one could be found who would risk their money in the enterprise," The Blade wrote in 1908.
Though it's been a century since those words about speculative development in Toledo appeared, current downtown building owners and developers such as James Zaleski can undoubtedly relate to the sentiment as they draw plans and take risks that could save the city's architectural heritage.
But in today's downtown real-estate market of too much space chasing too few tenants, how long Toledo's most historic and unique buildings can remain standing is a delicate and unsettled question with everlasting consequences.
"If there is a community interest in maintaining these buildings, then is the community willing to pony up the money so that they're there, in the hope that, at some point in the future, there is a demand that will match up with those buildings?" asked Harlan Reichle, managing partner of local commercial real estate agency CB Richard Ellis/Reichle Klein.
The old news article appeared during the opening of Hotel Secor at Jefferson Avenue and Superior Street, the first true luxury and
"fireproof" hotel in fast-growing Toledo. It was touted as one of the finest such establishments in the country.
After several fine decades of operation, the hotel closed 41 years ago, and Mr. Zaleski and a business partner bought the Secor building in 1999 with plans to restore it to its former place in the city's downtown fabric - albeit by offering work space to entrepreneurs and artists rather than hotel guests.
But that downtown fabric had faded and frayed since the headier years of the early and mid-20th century, when Toledo could boast a densely packed core with hundreds of bustling businesses, including four department stores, more theaters, and dozens of eateries and respectable hotels. Of the buildings that remain, many continue to sit underutilized or vacant, despite the recent arrival of the new homes of the Mud Hens and a minor-league hockey franchise rechristened the Walleye.
Rather than renovate the entire 10-story building and pray for a big rush of tenants, Mr. Zaleski took a piecemeal approach to filling vacancies that involved some creative - and cost-efficient - remodeling. Unlike some recent rehab projects, there was no tax credits or public financing involved, he said.
"It didn't make any sense at first," Mr. Zaleski said recently of the decision to buy and reuse the building at 425 Jefferson Ave. "But if you have an opportunity and you do it, it can open many doors for you."
His approach is one of three general strategies tried in the past 15 years for rescuing and reusing historic downtown buildings. There have been successes and failures, along with some partial successes with heavy costs to taxpayers.
At stake are irreplaceable testaments to the city's past, which are physical assets for future growth, said Toledo architect Paul Sullivan, who lives in a restored 1887 building in the downtown Warehouse District's St. Clair Village.
"What makes Toledo unique is the architecture that grew up around its unique history," Mr. Sullivan said. "It's architecture that was rooted in a different can-do age when Toledo competed in all arenas."
But today's local economy is much different from what it was when that inspirational architecture was built many decades ago. Aside from the publicly financed Fifth Third Field and new arena, few new downtown buildings are going in.
While the United Way of Greater Toledo opened a new building last year at Jackson and Superior streets, that structure was built at the expense of a much larger and architecturally unique building - the former Community Services Building - which is now facing likely demolition.
Those familiar with downtown say there is one overarching problem for both development and preservation: lack of demand. When there are few prospective tenants, developers are reluctant to take risks on projects to restore aging and vacant buildings.
"Demand is the issue - if there were demand we would probably be having less of these discussions about the fate of old buildings," Mr. Reichle said. "I do appreciate old buildings myself, but keeping these buildings up costs somebody some money."
Mr. Reichle's firm found a 21 percent vacancy rate in December for downtown commercial space. As the study was limited to competitively available space, it didn't bother with the 30-stories-and-vacant Fiberglas Tower, the empty Nicholas Building (the former Fifth Third Bank headquarters), or the city-owned Madison Building at Madison and Huron.
Exhibit A of lackluster demand downtown could be the Bartley Lofts at Washington and Ontario streets. The project involved redeveloping a 1913 warehouse into a sunlight-filled 52-unit condo complex, complete with higher-end amenities such as a rooftop swimming pool.
The building opened five years ago with some units priced as high as $425,000. But with only 75 percent of the units sold - despite a reduced $119,000 to $273,000 price range - the lead developers this month stepped away from the project, transferring management to a homeowners' association.
"We are going to lose a lot of money here," the developer told The Blade.
Nearby, the century-old Triangle Building at 34 South Erie St. sits boarded and vacant despite plans by a Michigan developer to transform the warehouse into a $12 million, 75-unit apartment complex.
Developers say that low demand and downtown's high vacancy rates have depressed rent levels. Low rent is usually a boon for tenants, but it makes it hard for owners to recoup their renovation investments in a historic property.
"At the end of a project, will it cash flow? If it doesn't cash-flow, then you've got a problem. That means somebody's got to subsidize it every year," said William Thomas, executive director of the Downtown Toledo Improvement District.
Government subsidy programs such as tax credits or municipal bond sales have enabled some historic renovation and reuse projects to move forward.
The city of 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.
But expenses soon outpaced revenues at both downtown apartment buildings - ultimately putting the city on the hook for debt payments.
Since the early 2000s, the city has paid about $1 million of general fund money each year for debt on the Hillcrest and Commodore Perry, as well as a third, similar project, Museum Place. The city expects to continue paying the debt until at least 2025, said Jennifer Sorgenfrei, spokesman for Mayor Mike Bell.
"This is the mayor's pet peeve," Ms. Sorgenfrei said of the past bond issuance. "He holds that up as one of our worst business dealings in the city. It's good to spur development, but the way that we did it at the Commodore was just not the right way."
Both the Hillcrest and Commodore Perry were recently foreclosed on and sold at sheriff's sales to corporations affiliated with banks. Yet managers say that their tenant base is stronger than ever.
The Commodore jettisoned its mixed-income tenant structure so that its 156 units - now 100 percent occupied - will soon be all market-rate. The Hillcrest's 106 units are 93 percent occupied and retains mixed-income residency.
City officials point to an empty East Toledo building as another example of questionable taxpayer investments made in the spirit of preservation.
About $200,000 of city and federal funds went to rescuing the Coad Building at 517 Main St. shortly after its roof collapsed in 2002. The money - nearly $150,000 of city funds and $65,000 from a federal grant - provided a new roof, interior walls, window covering, and paint for the red 1897 building.
The goal was to mothball the structure until a new occupant emerged. But the city-owned building has remained vacant as surrounding properties have one by one emptied out.
"We spent money to mothball something that probably should have been closer analyzed structurally before those types of investments were made," said Brad Peebles, commissioner of economic development.
That's fine to say for city officials now struggling to close budget deficits, but advocates of historic preservation fear that without firmer commitments and interest from community leaders in saving Toledo's most historic structures, downtown could soon look even more gap-toothed by empty space and parking lots than it already does.
Historic tax credits are popular tools for helping bridge the gulf in Toledo between building rehab costs and what owners expect to get in future revenue.
"Without them, it would be impossible to do some of these deals," said developer David Ball, whose downtown Toledo historic redevelopments include the Ohio Building and the Gardner Building - both at Superior Street and Madison Avenue - and the Hylant building at 1505 Jefferson Ave.
Mr. Ball's planned $17.5 million transformation of the former Steam Plant at the foot of Madison Avenue on the Maumee River has qualified for both state ($3.1 million) and federal historic tax credits (20 percent of project costs).
After years of delay, he and partner Jimmy Jackson hope to finally start work by summer's end on their plan to create 77 market-rate rental apartments inside the 1895 steam plant, with a new underground parking lot. They dropped earlier plans to build 32 condos onto the building because such new construction wouldn't qualify for historic tax credits and they expressed doubts about the downtown Toledo market for $400,000 condos.
Nevertheless, Mr. Ball is confident he'll find demand for the project's $1,000 monthly apartment rentals. "If we can't lease 70 units like that in Toledo on the river with a balcony, there's something wrong," he said.
After the old Hotel Secor closed, the building housed Ohio Bell Telephone Co., which tore out much of the original interior of marble columns and decorative plaster, and covered marble flooring with office carpeting by affixing harsh, damaging glue, Mr. Zaleski said.
With the Secor's best features long gone, Mr. Zaleski went about remodeling the ground floor and a few upper levels by stripping the building to its core, exposing concrete-encased walls and structural beams for a raw industrial look. The work was inexpensive to do, and the decor worked fine for his tenant mix of artists, media creators, and Internet start-ups. It also shortened the time he had to wait for the building to generate positive cash flow, he said.
"The cost of doing this versus a new drop ceiling and floor is pennies on the dollar," Mr. Zaleski said.
When one floor began to fill up, he would start work on another. His building is now about 45 percent filled with 35 or so tenants, including a charter school. It has also benefited by its across-the-street location from the new arena.
Mr. Zaleski, who owned the former Diva Restaurant downtown, said revenue from his other real-estate holdings allowed him to support his fledgling Secor project "until I got over the hump."
Yet for every successful historic reuse, there are often buildings like the United Way's former headquarters in danger of coming down.
Toledo City Councilman Joe McNamara, a vocal critic of the agency's decision to raze the architecturally unique building and put in a park, said the city lost too much of its urban density in the decades when people demolished irreplaceable structures such as the Paramount Theater, which were replaced by parking lots.
He is among a number of preservation advocates who worry that if Toledo continues its "teardown mentality," downtown eventually won't look much different from strip-mall-choked suburbs, and businesses will have less incentive to locate here.
"Those buildings are so important to history and they're so important to redo because they are buildings that stimulate other redevelopment," said architect Bob Seyfang, president of the Toledo Design Center. "You don't tear down unless it's being replaced virtually immediately by a new building."
Mr. McNamara equates the willful demolition of historic and unique buildings with the "defeatist attitude" that he called all too common in Toledo. Efforts to preserve buildings so that they can be reused in the future are financial risks worth taking, he said.
"I believe we can be an amazing city, but I don't believe that we can become an amazing city if we defeat ourselves by destroying our beautiful building stock," Mr. McNamara said.
Contact JC Reindl at:
jreindl@theblade.com
or 419-724-6065.
First Published April 12, 2010, 9:36 a.m.
