Planters outside Halle building on Euclid Avenue. Photo by Jerry Horton. Cleveland Memory Project, The Cleveland Press Collection, CSU, Michael Schwartz Library, Special Collections.
The merry-go-round goes round and round for developers in downtown Cleveland. It never really stops.
The old Halle building—more than 30 years since it ended life as a department store—grabbed the golden ring again for $5 million in state preservation cash.
And, of course, since it’s another failing downtown office/retail building being converted to housing, it will be in line for tax abatement on the 125 “large apartments, aimed at aging baby boomers and empty-nesters,” reports the Plain Dealer. The PD also says apartments will go from $1,200 to $2,000 a month or more at penthouse prices.
And who knows how much more.
This is the second time around for the Halle building. Even the big public investments (literally millions of public dollars in abatements and other subsides) at adjacent Playhouse Square haven’t made the old Euclid Avenue Halle’s investment profitable.
Back in the 1980s I wrote that St. George Voinovich, then mayor, “sweetened the pot of honey the city has given to developers of the Halle property—the Shottensteins of Columbus and Forest City Enterprises of Cleveland.”
Voinovich added $2.1 million to an already heavily subsidized project, increasing the $5-million UDAG low interest loan to $7.1 million.
State of Ohio’s liquor fund contributed another $6 million and $10 million in industrial revenue bonds. The owners graciously put $4.1 million in equity into Halle’s first renewal.
Still feeling the reverberations of Dennis Kucinich and his followers Voinovich at the time had bypassed tax abatement, a temporary move. However, office building continued without the subsidies. The Medical Mutual, the Ohio Bell and Eaton Corp. buildings all rose without tax abatements.
Voinovich was so bold at the time that he boasted that the Halle building would share “profits” with the city.
“The developers have also agreed to provide the city with profit sharing position in return for the below market interest rate received,” said a press release from City Hall. It never happened, of course.
As of 1992 the city’s share, most predictable, was zero. Not a penny.
Somebody was making money, however.
Despite a $10 million overrun, about one-third of the predicted cost in the late 1980s.
It was no surprise that Victor Voinovich, the mayor’s brother, found Halle’s a nice spot to do business.
One political client at Halle’s—the Climaco law firm—moved in and Victor picked up some $84,000 in commissions on the Climaco lease. Brotherly love. The Climaco firm—now Climaco Wilcox Peca Tarantino & Garofoli—spent some $400,000 on furnishings with another Voinovich family, the George S. Voinovich firm, got $90,500 for its work.
(By the way, the Climaco-Wilcox has been the law firm of Gateway since its beginning back in the 1990s. How many millions have gone there?)
Leasing agent Victor Voinovich, another brother, got some $100,000 on Halle building lessees.
I reported other exotic costs from the building’s operation, including bills from Victor for water, a party, and coffee.
What wasn’t allowed, however, was the attempt to include for the opening day ceremonies an Ebony Grand Piano. The city found this bill not applicable.
But the Forest City gang really had the party, charging off to the project percentages of their salaries. One with a $230,000 salary charged off 30 percent of his pay to the Halle project. Another with a salary of $340,000 had a percentage of his salary charged off in each of five years.
You just have to know how to make money to make money.
The Plain Dealer never touched the story. Likely if it had been George Forbes it might have drawn some attention. But the other George—off limits.
I hope they pay more attention to these new deals.
But I’m not hopeful. We rarely get a rundown of the full cost of subsidies on these many downtown conversions.