LORAIN — City Council passed two tax agreements Monday, furthering the Broadway Building hotel project.
After receiving $1.75 million in historic tax credits last month, the next step was for the city to enter into a Community Reinvestment Areas (CRA) agreement with developer Ariel on Broadway, and create a Broadway Tax Increment Financing (TIF) agreement. Council unanimously passed both measures, with several council members, Mayor Chase Ritenauer and others expressing their excitement to see the project move forward.
“I’d like to commend the mayor and the Port Director Tom Brown and Safety/Service Director (Dan) Given for all of their hard work on making this a reality and not having to tear down a building that has been there for as long as many of us — except for Joel (Arredondo) — have been alive,” Councilwoman At-Large Mary Spingowski said. “I really, really appreciate everything that they’ve done.”
Despite the jab at his age, Council President Joel Arredondo agreed.
“And I’d like to add that being on council for 12 years, when I came on, the Spitzer Hotel had already been closed for approximately three years,” he said. “(We’ve) heard constantly at almost every meeting … about the urgency to tear down this eyesore and I would like to commend those who stood with me in support of finding a way how to do it. … These buildings will never be duplicated.”
The TIF will provide a tax abatement for the parcel for 30 years, while still requiring the owner to make services payments to the county treasurer to provide a distribution for the city’s school district. The CRA, submitted by the Lorain Port Authority and the developer, grants the property owner a 12-year tax exemption for the increase in value of the property after the project is complete.
Originally the site of the Spitzer Hotel more than 15 years ago, developer Ariel on Broadway plans to rehabilitate the historic building into a 55-unit hotel, with a goal of being open next year. The building has been owned by the Lorain Port Authority, with the organization’s director Tom Brown now instrumental in getting the long-awaited project going. He reportedly met developer Radhika Reddy at a wedding at the Ariel International Center on East 40th Street in Cleveland, a building that her firm had rehabilitated, and began pitching the parcel in Lorain.
“We have to make sure this succeeds or I’ll be mopping floors over there,” Brown joked. “… The construction’s tough enough, but once it opens it’s going to take everyone’s support.”
Reddy commended Brown for his persistence in keeping her from retiring to come rehab the structure.
“(Brown) said he’s going to help me no matter what, so you have such an entrepreneur in your public service … that I risk my entire retirement, everything, taking huge debt — this is an $8-9 million project — put my entire 28 years earning in risk,” she said. “We hope the hotel will succeed but it’s a big gamble.”
Part of the women-owned development firm Ariel Ventures, she said the firm focuses on projects in low-income areas, using tax credits to invest into the communities.
“We are willing to risk it and we believe in going into low-income areas where no one else will go because we are mission-driven and we want to make a difference and leave a legacy behind,” Reddy said. “I’ve done that in Cleveland, I’d like to do it in Lorain.”
For Ritenauer, the project was an example of how different organizations in the city — from the school district to the Port Authority — could work together to bring economic development to the area.
“(The) bottom line here is its taking changing state law, the abatement, the TIF, I would say a nice break that we receive just from the serendipity of Radhika and Tom meeting and this coming to where it’s at … I think this is a project and an example of just everybody working together and getting it done,” he said.
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