Lakewood’s Former Fantasy Complex Gives $5 Million State Historic Tax Credit

A historic $5 million government tax credit will help developers reshape the former fantasy entertainment complex in Lakewood into a magnet for the area’s lesbian, gay, bisexual, transgender and gay communities.

The itinerant property, formerly the Homestead Theater Block, won the biggest prize possible this week in a fierce competition to help the state preserve it. The building is set to house new venues and small businesses as part of a broader project called Studio West 117.

Governor Mike DeWine and the Ohio Department of Development announced nearly $40 million in tax credits on Wednesday, June 22, for 38 projects spread across the state. That list included 10 Northeast Ohio winners, from a former public school in Cleveland to a downtown Elyria building dedicated to an esports center.

And there was one surprising local loss: The long-suffering Warner & Swasey complex in Cleveland’s Midtown area lost some credits, again, despite an adjustment to the program’s rating model that seemed to tip the odds in favor of this property. The degraded buildings, at East 55th Street and Carnegie Avenue, are the subject of a mixed-income housing scheme.

Richard Barga, managing director of the nonprofit MidTown Cleveland Inc., expressed disappointment that the development department’s recent decision to provide bonus points for affordable housing deals wasn’t enough to help Warner & Swasey over its best competitors.

“Not winning this seems to be completely contradictory to the purpose of the apps in this roundup,” he wrote in a text message. But he continued, “This project is moving forward despite this setback. We have just received $1.5 (million) in unrestricted state funds and we look forward to continuing to progress.”

MidTown and Pennrose, the Philadelphia-based developer, will have to decide whether to reapply. The same applies to applicants who unsuccessfully sought loans for the repair of the Samsel Supply Co. complex of apartments; redevelopment of a discontinued hotel in the city center; And he continued the march of conservation projects along Superior Street, just east of downtown Cleveland.

The General Assembly recently agreed to temporarily double the size of the popular tax credit program. This expansion will affect the next round of awards in December.

Tax credits are an important part of funding the reimagined Phantasy, which will serve as the cornerstone of a LGBTQ-focused campus near the Cleveland-Lakewood border. The entire project, with an estimated cost of approximately $87 million, spans historic preservation and new construction at Detroit and Heard Roads.

“This is a giant step closer to being able to fully close our funding for Phantasy,” said Daniel Bowdish, who is leading the project with fellow tax credit advisor Betsy Figi. The couple purchased the 54,000-square-foot Phantasy complex in 2020.

After the renovations, the space will house a few entertainment venues, and host drag shows and other shows; small trade; Shared office space and podcasting studio. Bowdish said construction is likely to be completed in 2024.

Behind The Phantasy, he and Figgie are preparing to open another building, called Fieldhouse at Studio West 117, in the fall. The facility, which is a combination of renovated space and ground construction, includes a dodgeball, volleyball, basketball and pickle ball gym area. Rooftop bar and restaurant. Ground floor dining and patio with rock wall.

Across Detroit, the couple aims to build more than 200 apartments on the site of a closed NTB tire and service center. The building, which includes a mix of low-cost seniors’ housing and modestly priced workforce housing, is likely to open in 2025.

The developers also hope to integrate a health clinic at that point in the project.

The Department of Governmental Development announced the tax breaks at an event in downtown Illyria on Wednesday morning. The Lorraine County community received its first prize, a $2 million tax credit that will support developer Kevin Flanigan’s vision to revitalize a portion of downtown.

The Italianate Dixon Building, constructed in 1873, would become part of a project that would provide an esports arena, game stations, offices, classrooms, and a restaurant to Broad Street. A new apartment building, with a wine bar on the first floor, slated to rise in a nearby car park.

The historic tax credits, along with a $3.4 million award from Ohio’s Transformative Mixed-Use Development Program, and a state affected area clean-up grant, will help advance a challenging project,” Chancellor Stephanie Mercado wrote in an email.

“It is such an honor to receive the award, especially as this is the first historic tax credit award for a project in the city of Illyria,” she wrote. “The state award for the Historic Tax Credit is one of the…the last critical pieces of funding that must be secured for the project.”

Cleveland, often a big winner in the twice-yearly race for credits, has only two wins — both outside of downtown.

In the Jefferson neighborhood, on the West Side, $2 million in credits will be used by Sustainable Community Associates to help convert a former public school into housing. The building, Nathaniel Hawthorne Elementary School on West 130th Street, is one of dozens of vacant schools that the Cleveland Metropolitan School District and the city offered to developers last year.

A landmark in the city, the building will become 36 mid-priced apartments. With state and federal tax credits and a state brownfield grant, developers hope to start work in December or January and finish construction 12 months later.

Their plans also call for a 57-unit housing project to be built on a portion of the expansive car park next to the school. The new construction will be a second stage.

Josh Rosen, co-founder of Southdale Community Associates, a Cleveland-based team interested in establishing the market in parts of the city where there are no other developers streaming, said.

“I feel that when we talk about new types of community development and economic development in pavilions that haven’t seen investment, this could be a really cool case study of how city, county, state, and private developers work together,” he added.

CHN Housing Partners was the other winning applicant in Cleveland, for $13.9 million to revitalize St Michael’s Victorian Gothic School building at 3146 Scranton Road. On the fringes of the Tremont and Clark-Fulton neighborhoods, a vacant school will become apartments for low-income seniors. CHN is also planning to renovate an adjacent monastery as a residence.

“It’s huge. It’s huge,” Heather Rodge, a conservation consultant working on the project, said of securing a $1.36 million tax credit award after several unsuccessful applications.

“Thank God, the building will be reused,” she said. “There’s nothing incredible inside, but the outside is absolutely gorgeous. I can’t wait to get the right windows in that building.”

Another big winner in the area was the massive Hoover Company complex in North Canton, which took out $5 million in credits. The prize will flow to the more challenging western part of the old manufacturing campus, which is being relocated as a mixed-use development called the Hoover District.

Joint venture partners Industrial Realty Group LLC and Industrial Commercial Properties LLC plan to convert the historic spaces into 226 apartments.

This project previously won – and then lost – a $5 million state tax credit. The state does not pay the appropriations until the project is completed. The deal to redevelop Hoover stalled a few years ago, leading the development department to cancel the award in late 2019.

Progress on the project came to a complete halt when the pandemic hit in 2020, according to a copy of a recent tax credit application submitted to the state. Now, though, “the owner is fully committed to completing the remaining rehabilitation project subject to the re-establishment of the historic tax credits,” the application states.

Other local winners are:

• North Hall in Berea. Baldwin Wallace University plans to modernize this mid-century, vacant residence, as a 65-unit residence hall that can accommodate approximately 135 students. The $18.4 million project, which includes asbestos remediation and the addition of an elevator, has received $1.8 million in credits.

• The first building of the National Bank in Canton. The downtown Canton office tower has secured $1.12 million in credits for a partial rehabilitation project, which spans a historic bank hall and loft office space. After $5.7 million in renovations, the building will be ready for new tenants for offices and a restaurant on the ground floor.

• Ibn A. Warehouse. Schrader of Ohio in Akron. This century-old warehouse is being converted into a self-storage facility. The second stage of the business won a $250,000 credit.

• Riddle Block in Ravenna. A $250,000 credit award will support the renovation of this four-storey building on Ravenna’s main street downtown. The completed project will include 20 apartments – two of which are short-term rentals – and retail spaces on the ground floor.

• Lakewood Education Building in Lakewood. Part of this historic educational complex, located on Warren Road, will be renovated in the form of three apartments and office space. The local school district vacated the building in 2019. The state gave $225,000 in credits for the deal.

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