CLEVELAND - A new 54-story skyscraper called NuCLEus could transform Cleveland's skyline, but getting the project off the ground is proving a difficult task.
The developer is proposing an unusual property tax plan to get the project started. The plan was discussed Saturday during the first of several planned public meetings with the Cleveland Metropolitan School District (CMSD).
According to the district, the mixed use complex will house retail, office space, 406 apartments, 36 condos, a 120-room hotel and an additional 2,100 parking spaces. It would be located along East 4th Street across from Quickens Loans Arena.
Construction of NuCLEus is estimated to top $540 million dollars. However, the expected property valuation after construction is estimated at $250 million dollars. To make up the difference, Stark proposed tax increment financing, (TIF) which would allow the use of future property tax money to repay construction debt.
Under the proposal, Stark Enterprises would give the CMSD a lump sum payment of $18 million dollars in property taxes up front to help with financing. According to CMSD the money, if accepted, would be placed in its continuing building construction and renovation program. The district would get an additional $38 million in matching funds from the state, bringing the grand total to $56 million dollars.
"The question before the board is do you forgo new money in the short-term with the promise of getting new money in the long-term," said CEO of Cleveland Metropolitan Schools Eric Gordon. "Or do you take the risk of saying no, build the building now we'll collect the tax, knowing the building may not actually be built."
The structure of the proposal details the tough choice facing the school district. If the district opposes the project but Cleveland City Council votes in favor of it, the schools will not receive the $18 million dollars the developer is currently offering. That detail that was not received well by those attending the meeting.
"It looks like they're [council] trying to get the district to give them cover to make a decision the city wants them to make," said meeting attendee Chuck Hoven who opposed the plan.
Under the proposal, if the board and city council reject the TIF, the school district will continue to collect $360,000 a year in property taxes currently paid on the parking lot where NuCLEus would have been built.
The school board is set to vote in late August. A final decision on the proposed complex rests with city council, who are expected to vote in early September.