Will Cleveland dominate the list of Transformational Mixed Use Development applicants and winners statewide, resulting in a forest of construction cranes across the city in the next year or so? Or will Cleveland projects get left out of this first round of tax credit awards, only to watch other Ohio cities dominate? What Cleveland projects will be submitted and how likely are their victories? What is their competition?
Cleveland and Columbus are shaping up to field most of Ohio’s Transformational Mixed Use Development (TMUD) projects. Cleveland is where the TMUD was originally brainstormed and where its authorizing legislation was drafted. And it’s apparently where a large number of the potential TMUD projects lie in wait.
For those who don’t regularly follow this blog, a TMUD is a mega-project. It’s a real estate development that’s big, complicated, expensive and difficult to do with just private dollars and conventional public subsidies.
Enter the TMUD program. It was created by Cleveland-based Stark Enterprises which saw historic tax credits be used since the 1990s to convert most of downtown Cleveland’s obsolete office/commercial buildings into housing, hotels, a few modernized offices, plus some ground-floor retail/restaurants. With downtown’s supply of aging, unconverted buildings dwindling, Stark recognized that new construction would be the next stage of reinvigorating the urban core of this city that once ranked fifth in the nation in population.
A new type of public incentive was needed to fill in the gap of private financing to overcome the high construction costs and low rents common in Ohio’s largest cities. That incentive became the Ohio Department of Development’s TMUD program, which is now accepting applications.
The Millennia Companies’ Centennial development is seeking the maximum TMUD incentive available — a $40 million tax credit that will be used to complete the financing for redeveloping the largest vacant building in downtown Cleveland into a city-within-a-city for roughly 1,000 residents and hundreds of workers.
Up to $80 million in tax credits will be available per year for Major City Projects — those in Akron, Cincinnati, Cleveland, Columbus, Dayton, Toledo — with $20 million for General Projects elsewhere.
Read more at NEO-trans.blog