Officials promise change is coming for Fort Industry Square, Hotel SeaGate
Each day at Balance Pan-Asian Grille’s downtown eatery customers who look out the restaurant’s west-facing windows can count on a dismal view of the corner of North Summit Street and Jefferson Avenue.
Staring back at them is the half-demolished,19-story skeleton of the former Hotel Seagate, its street-level deconstruction hidden by a perimeter construction fence but otherwise looking like an apocalypse victim with missing walls and it guts exposed to the open air.
Just across the street from the hotel is the 12-parcel block Fort Industry Square, a collection of historical structures that were rehabbed back to life 40 years ago but now largely are vacant and in need of repair. Its new owners plan to redevelop it into residential and office space but also have placed construction fencing around its lengthy front facade.
It will take a few years before the view improves. And to beautify this downtown block, the public will have to play its part in various ways.
Lucas County will issue bonds to foot the bill for the estimated $70 million cost of redeveloping the hotel and the adjacent SeaGate Convention Centre. Eventually, that cost will be repaid through revenues generated by the hotel and convention center, but it will take years.
To revive Fort Industry Square, Ohio taxpayers will provide at least $5 million in tax breaks for developers under the Ohio Historic Tax Credit program. And there’s likely more tax breaks that will go to the project under a federal Historic Tax Credit program.
Whenever the public sector provides funding or tax breaks that benefit private developers, such as a stadium, a hotel, or a festival marketplace, there are those who argue that the private sector should be footing the entire bill.
But the reality, said Cindy Kerr, president of ConnecToledo — Downtown Development Corp., is that without things like historic tax credits to help redevelop an older downtown structure like Fort Industry Square or a local government able to issue bonds for a hotel or stadium, those projects are unlikely to be financially viable.
“A few years back the historical tax credits came under challenge by the state to reduce the amount, but all the municipalities and counties banded together to say, ‘We need these,’” Ms. Kerr said. “We know that developers need these to create these projects.”
Lucas County Commissioner Pete Gerken agreed.
“Absent the public sector helping to redevelop these areas, across the nation these projects just don’t happen,” he said. “You can’t always evaluate these types of projects on a dollars-and-cents basis. These projects do more than just create revenue. You create trust, you create enterprise, you create public pride,” Mr. Gerken added.
“If you don’t do it, you have a decaying downtown. So the risk-reward is almost always more than dollars and cents,” he added.
Kevin Prater, a partner in Lansing-based Karp and Associates, said a detailed plan to redevelop Fort Industry Square still is being worked out and likely won’t be made public until the end of the year.
But Karp sought Ohio Historic Tax Credits last year and federal Historic Tax Credits this spring to help with the cost. Last month the Ohio Development Services Agency awarded $5 million in state tax credits for a first phase of development, which Karp declared would cost $25,994,968.
Karp, which redeveloped the former Standart-Simmons Building on Erie Street into 115 lofts apartments and the Berdan Building on Washington Avenue into 75 apartments, bought Fort Industry Square in December, 2017. It stated it will construct 40 residential units on upper floors and 37,000 square feet of commercial space on the lower floors in the Fort Industry Square buildings that extend from 132 to 156 N. Summit St. Plans haven’t been disclosed for the remaining buildings.
This spring Karp submitted nine applications for federal Historic Tax Credits, which are regulated by the National Park Service. That request was for 116 through 152 N. Summit. Eight have been approved.
The Federal Rehabilitation Investment Tax Credit provides a 20 percent tax credit on building rehab work (walls, partitions, floors, ceilings) or mechanicals & fixtures (doors, windows, HVAC, plumbing, etc.) when rehabbing a historic, income-producing buildings determined by the secretary of the interior to be “certified historic structures.”
Fort Industry Square is on the National Register of Historic Places, which is an honorific designation.
The Hotel Seagate is a registered historic place, and was in the process of being demolished by the county in 2014 when the head of the hotel chain that redeveloped the Renaissance Hotel downtown advised it should be spared from the wrecking ball.
The county has since developed plans to add a ballroom and other improvements to the convention center and turn the Hotel Seagate into a Hyatt.
“With both projects the major financing will be through the bonding authority of the county. We’ll issue bonds to fund the cost of both the ballroom and Hotel Seagate, and we would use revenues from those two sources to pay off the bonds,” Mr. Gerken said.
When the hotel is ready, First Hospitality Group, which operates the Renaissance, will run the Hyatt.
Mr. Gerken said the construction on the convention center could start by the end of the year, and then the Hyatt early next year. The county is determined to have both completed by early 2021 in time for Toledo to host the Solheim Cup golf competition.
Financing a $70 million project through a bond issuance might sound risky, but Mr. Gerken said the county has a pretty strong track record.
With Fifth Third Field there was a 20-year plan to retire the $38 million worth of bonds used to build the stadium. The bonds were retired after 15 years.
“Because of that you had a redevelopment in Hensville and the Warehouse District and the Huntington Center,” Mr. Gerken said.
“A public-private partnership … that’s the economic model we’ve enacted nationwide. You share the risk,” the commissioner said.
Posted By: The Toledo Blade on September 6, 2019. For more information, please click here to read the source article.
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