The BIG One - WTAM 1100

Stalled development could be getting back on track.

(Cleveland) – The stalled Flats East Bank project could be about to get back underway.

On Tuesday, Mayor Frank Jackson and Governor Ted Strickland announced a breakthrough in their efforts to significantly close the funding gap created by the global economic crisis that will allow the delayed project to move forward.

The $270 million first phase of the development will keep more than 1,200 employees in downtown Cleveland with a new office tower and other new amenities including a hotel, retail, restaurants, entertainment venues and 14 acres of parks and green space.

“This project showcases the unique amenities that Cleveland has to offer and will help to spur additional economic development projects in the Flats. The fact that we are breaking through financial barriers during this critical time, signals to businesses and developers that Cleveland is a good place to do business and that the City is a willing partner,” said Mayor Jackson.

The Flats East Bank project, being developed by The Wolstein Group and Fairmount Properties, was suspended last fall when the global credit crisis put a freeze on most commercial developments. In order to restart this critical development, public partners worked diligently to find a combination of resources that will infuse the project with an extra $54 million, primarily in the form of loans to the development.

Gov. Strickland added, ”This is great news for the people of Cleveland and northeast Ohio. The Flats East Bank project is an example of collaborative partnerships revitalizing an area and retaining valuable jobs. I look forward to continue working closely with Mayor Jackson and our private partners to protect jobs, keep a strong corporate presence in Cleveland and encourage redevelopment for a more vibrant urban community.”

Iris S. Wolstein, who along with her son Scott (both lifelong Clevelanders), has remained determined and dedicated to this project. Mrs. Wolstein has continued to provide economic support to keep this project alive. “I am pleased to persevere in spite of these challenging economic times. To ensure development of this Flats East project my late husband Bart envisioned so many years ago. Our family is devoted to the completion of the revitalized vibrant riverfront,” she said.

To move the project forward, the State committed an additional $24 million through a combination of sources, $23 million of which are loans.

The City, through its Economic Development Department, will introduce legislation to City Council committing an additional $30 million loan, as well as the use of its Recovery Zone Bond allocation, a federal stimulus incentive which allows taxable bonds to be issued as tax exempt. In addition, the City has submitted to the schools a restructuring of the Tax Increment Financing with the Cleveland schools, which would achieve the same percentage of taxes to be received by the schools as previously agreed to, but will adjust the timing and method of payments.

Many other public partners and programs also contributed to push this unique and defining project forward, including a recent Cuyahoga County loan or 1.5 million for brownfield remediation. The County also previously provided a $4 million loan and secured State and Federal Funding sources totaling $7 million.

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