Preparations continue on the site of the former Van Aken Plaza for the $100 million first phase of a walkable mixed-use district in Shaker Heights. File photo
SHAKER HEIGHTS, Ohio — Council has introduced legislation that will pave the way for a $6.2 million bond issuance to fund the city’s contribution to the $100 million first phase of the Van Aken redevelopment project.
“Over four years ago, the city and RMS Investment Corp. began working together on a plan to transform the Van Aken Shopping Center, the city’s Farnsleigh parking lot, the former Qua Buick site into a walkable mixed-use district in which to shop, work, live and play,” states a Jan. 23 memo to council.
Currently, the Van Aken Shopping Center is demolished and RMS is preparing the foundations for the parking garage and the Phase One apartment building.
Since two Development & Use agreements were authorized by council last year, RMS has closed on over $60 million in bank financing for the project as well.
The city has agreed to contribute about $1 million for public improvements out of $3.3 million required for public right-of-way and infrastructure, through municipal bonds.
Another $5.2 million bond issue is in the works with the Greater Cleveland-Cuyahoga County Port Authority, to help finance the private development.
Both series of bonds will be issued in the coming months, but Finance Director Bob Baker noted that a roughly $1.5 million drawdown anticipated by RMS in March.
If the bond issuance is still in process, the city may have to temporarily dip into its operating reserves, which were about $12 million at this time last year.
Responding to questions from council on Jan. 23, City Economic İllegal Bahis Development Director Tania Menesse estimated that with commitments from business tenants in the district, city income tax collections are projected at about $278,000 a year.
This would cover about 60 percent of the annual debt service, currently projected at $433,000 over 20 years, although that figure remains subject to change.
Baker noted that the financing plan for Phase One includes several grants, a state loan, and several bond issues.
And on Jan. 23, council also appropriated $300,000 in state grants through the Ohio Development Services Agency (ODSA) and the Ohio Department of Transportation’s (ODOT’s) Jobs and Commerce program to RMS.
These funds can be applied to the $3.3 million of infrastructure costs for building three new dedicated city roads — Meade, Tuttle and Walker — that will be constructed and maintained by RMS.
The roads will connect and serve the larger project, includes a $16 million, 60,000 square foot office building, Menesse noted.
Shaker Heights qualified for the grant funds based on projections of 100 new office jobs tied to at least three employers:
— the developer, RMS Investment Corp.
— the first office anchor, ABA Insurance Services
— a previously-unnamed financial services firm
Council passed the measure on an emergency basis so that RMS can request reimbursement this month.
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