Detroit Shoreway apartments, Intesa project and Legacy Village expansion secure Port of Cleveland financing OKs (photos)

CLEVELAND, Ohio -- A Lyndhurst hotel and a pair of projects that will bring nearly 500 apartments to Cleveland won financing support Tuesday from the Cleveland-Cuyahoga County Port Authority.

The port's board signed off on nearly $200 million in real estate-related bond transactions, setting the stage for construction to start within months on a trio of projects. The agency acts as a conduit for development financing, issuing bonds and helping to structure deals that involve longer terms, lower interest rates or cheaper construction materials than a borrower might find in the private market.

Tuesday's headline deals were:

A Hyatt Place hotel and a 355-space parking garage at the Legacy Village shopping center in Lyndhurst.

Developer Mitchell Schneider hopes to start construction in May and to complete the $33 million project by June 2016, in hopes of grabbing hotel-room demand generated by the Republican National Convention in July. The 135-room hotel and garage will sit just north of the shopping center, on a 2-acre site currently occupied by a parking lot.

The port expects to issue up to $15 million in tax-exempt bonds to help pay for the parking garage.

The developer will make payments on that debt by using money set aside through tax-increment financing, a structure approved by the city and the South Euclid Lyndhurst Schools Board of Education. That arrangement basically allows the developer to tap the increased property-tax value of the real estate -- value created by the project - to pay debt service on bonds issued for construction.

Lyndhurst City Council signed off on the deal, a first for the city, on March 23. The school district, which will receive other money from the developer and the city, approved the financing March 2.

In a separate transaction, the port plans to issue up to $17 million in taxable bonds for the hotel project. Huntington Bank will buy the bonds, which carry a repayment stream tied to hotel revenues.

The first phase of Intesa, a 2.2-acre, mixed-use project at the border of University Circle and Cleveland's Little Italy neighborhood.

Developer Peter Rubin and construction executive Tony Panzica are planning an 11-story residential building, housing 196 apartments, and a 470-space parking garage in the first phase of the project. A later phase could include a 150,000-square-foot office building and a 280-space expansion of the garage.

The apartments will be a mix of what Rubin is calling micro-suites, starting at 400 square feet for a studio; metro-suites, which are more traditional units; and two-story, townhouse-style penthouses.

Shoehorned onto a tight site along a busy street, Intesa has hefty infrastructure costs ranging from street extensions and utilities to the garage, which is meant to provide parking not only for the project but also for the surrounding neighborhood. Plans call for a central green space and pedestrian paths through the block.

The complexity of the project has led to delays, but it appears that Rubin and Panzica are ready to start building on the land, owned by the University Circle Inc. neighborhood nonprofit group.

"It's been four years in the planning, and suddenly we're rushing and sprinting toward the groundbreaking," Rubin, chief executive officer of the Coral Co. of Cleveland, told port board members.

The port will issue up to $60 million in bonds for construction. Related Fund Management LLC, a new player in Northeast Ohio commercial real estate, is in line to buy the bonds. The company is part of New York-based Related Cos., founded by Stephen Ross, a longtime real estate investor and the owner of the Miami Dolphins.

Other Intesa financing includes an estimated $5.5 million in public infrastructure funding and $8.4 million in equity from the developers and their partners, according to documents distributed at the port board meeting.

Rubin said the apartments, garage, some ground-floor retail space and public spaces will open next year, after roughly 18 months of construction. He and Panzica hope to start building their second phase before the first one is finished.

Their early struggles to attract office tenants prompted the developers to start with apartments, which are easier to finance and fill. Rubin said Tuesday that he's talking to two potential anchor tenants for the office building. Either one of those tenants would take enough space to make the project a reality.

"We're finally in the delivery room," Rubin said.

An apartment project that would bring 297 units, spread across nine buildings, to a former industrial site in Cleveland's Detroit Shoreway neighborhood.

The NRP Group is clearing more than 10 acres along Breakwater Avenue, overlooking the West Shoreway between West 58^th and West 65^th streets, for a project known as Breakwater Bluffs. NRP, a national apartment developer based in Garfield Heights, could start vertical construction as early as August.

The project will be the company's first attempt at developing market-rate rentals in the city, though NRP is looking at other sites in Cleveland and recently opened the first units at a tony Beachwood complex called the Vue.

Breakwater Bluffs will blend three- and four-story apartment buildings with townhouse-style units, offering views of Lake Erie and access to outdoor gathering spaces and a resort-style swimming pool -- a rarity at apartment properties in the city. The project also will include 425 parking spaces.

"We're adding to the tremendous investment that's going on in this city and in this neighborhood right now," Aaron Pechota, vice president of development for NRP, told port board members.

The port will issue up to $40 million in taxable bonds for the project. KeyBank expects to buy most of the bonds. Other project financing includes $5.4 million in developer equity and a $12 million loan arranged by the Cleveland International Fund, which amasses money from foreign investors seeking U.S. residency through an increasingly popular federal visa program.

NRP's project does not include the well-known Westinghouse Building, an eight-story structure that looms over the Shoreway at the north end of West 58^th.

Other odds and ends

On top of approving $132 million in new project financing, the port board signed off on a $16 million bond-conversion for Laurel School, a girls' school in Shaker Heights; and a $45 million bond issuance that will refinance existing port-issued debt on an Avery Dennison Corp. facility in Mentor.

The board also unanimously elected Chris Ronayne, the president of University Circle Inc., as its new chairman, who will serve a two-year term. Ronayne fills the seat last occupied by Marc Krantz, a well-known local attorney who died in a skiing accident in December. The port left Krantz's chair open for several months.

"I'm truly looking forward to leveraging the economic power of the port of Cleveland to create more jobs for Cleveland and Northeast Ohio," Ronayne said in a news release. "From our international export capacity to our financing capabilities, the port ... can enhance our regional economic-development agenda."