CLEVELAND, Ohio – The new owner of Key Center said he’s “humbled” to control the downtown Cleveland complex, which includes Ohio’s tallest building.
During an interview late Wednesday, Frank Sinito expanded on his plans for Key Tower and the neighboring Cleveland Marriott Downtown hotel. Sinito, chief executive officer of the Millennia Companies of Valley View, closed on the $267.5 million purchase Tuesday.
He plans to move Millennia and its roughly 200 employees to Key Tower by July 1. The privately held family of companies, focused on the apartment business, will occupy just over 40,000 square feet on the building’s 13th and 40th floors.
Within months, Sinito aims to start renovations to make the complex feel more lively and modern for existing tenants and incoming occupants, including Forest City Realty Trust, Inc.
Frank Sinito is chief executive officer of the Millennia Companies, which purchased downtown Cleveland’s Key Center this week in a $267.5 million deal.Millennia Companies
“Right, wrong or indifferent, I wasn’t looking at it as an investor,” Sinito said of Key Center, which he purchased from Atlanta-based Columbia Property Trust, Inc. “This was my headquarters. I’m going to be a tenant there. So I always looked at Key Center as Millennia’s headquarters. And I always looked at it through the tenant’s eyes.”
Design work is underway for changes to the tower’s lobby and the plaza outside. Exterior construction could start as soon as the weather warms up, Sinito said.
A gut-rehab job at the on-site fitness center, on the third floor of the Marriott building, might begin sooner. The workout facility was part of the Club at Key Center, a private social and business club that closed late last year. A public filing shows that Columbia and the Club ended their lease agreement Jan. 15.
After an overhaul, the fitness center will reopen by late 2017.
“The space is original, and it needed to be renovated,” Sinito said, alluding to the club’s 25-year run in the complex. “Private clubs, you don’t see many of them anymore. We felt that a private fitness center with a professional operator would be better suited for the space, and we’re hoping a lot of the members will join. They certainly will get some type of courtesy, as will guests at the hotel and tenants at the tower.”
The Club’s banquet facility will become the St. Clair Ballroom, an event space owned and operated by Sinito and his wife, Malisse. The couple also owns and operates LockKeepers restaurant in Valley View, and the Sinitos are preparing to open the Marble Room Steak and Raw Bar on Euclid Avenue downtown in May.
A related eatery, Marble Room Sushi, will replace the newsstand in Key Tower’s lobby.
Sinito said that Vocon, a design firm with offices in Cleveland and New York, is tackling the lobby renovations, an effort to make the space feel less cold and institutional. Some of the proposed changes still need approvals from tenants including KeyCorp, the largest occupant in the building, and Forest City.
“I’m hoping that we can start lobby construction within 60 days,” Sinito said.
He also plans to redo the Marriott’s lobby, restaurant and banquet and meeting areas. The timing of those projects hinges on approvals from Marriott, which manages the 400-room hotel.
Sinito said it was a challenge to sell lenders on financing a large purchase that also called for extensive renovations, between much-needed hotel updates and the cost of attracting new office tenants including Forest City, a publicly traded real estate company headquartered here.
“There were a lot of moving parts,” he said of the deal, originally set to occur last fall. “The capital markets went the other direction on us. We had over a 100 basis point interest-rate increase from when we put it under contract to close. … What was so difficult was the capital required, especially in a rising interest-rate environment. It made the acquisition all the more challenging.”
Millennia has put its existing headquarters, part of Sinito’s Thornburg Station project in Valley View, up for sale or lease.
The nearly 27,000-square-foot building, which includes retail spaces occupied by Yours Truly restaurant and Malley’s Chocolates, is being marketed for $3.5 million by the Newmark Grubb Knight Frank real estate brokerage. The listing does not include LockKeepers, which Sinito and his wife plan to keep.
“It’s a signature, standalone property,” said Bob Nosal, executive managing director of Newmark’s Cleveland office. “You’ve got the towpath adjacent to it. It’s just got kind of a feel to it, a vibe, that is different than being on Rockside Road. It will require the right kind of user.”
The former National City banking lobby at Euclid Avenue and East Sixth Street in downtown Cleveland is being transformed into the Marble Room Steak and Raw Bar under Frank and Malisse Sinito’s direction.David Petkiewicz/Cleveland.com
Back downtown, apartments will open in the spring at Millennia’s redevelopment of the historic Garfield Building on Euclid Avenue. In addition to the Marble Room, the commercial space will be occupied by Medici Pizza and Harness Cycle, a spinning studio.
The developer also owns the small 75 Public Square office building, which has missed out repeatedly on state historic-preservation tax credits for a residential conversion.
Last year, Millennia considered selling the building to a hotel developer. But that deal fell through. Sinito said Millennia now plans to hang onto the property, steps away from Key Center, and to make another attempt at turning it into luxury housing.
So are there other downtown purchases in the pipeline?
Twenty-four hours after buying downtown’s biggest trophy, Sinito just laughed.
“I’ve got enough going on,” he said. “I need to catch my breath.”
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