Condos on program for ex-NBC building
Suburban office developer Lewis Wallner II plans to try something different for himself and the downtown real estate market by converting the former NBC Building on East Sixth Street to about 40 residential condominiums as part of a $20 million project.
'My wife and I both prefer urban living,' said Mr. Wallner, managing director of King James Group in Westlake. 'We've been unable to find the type of housing we want in Cleveland. My primary objective is to wind up with a cool place to live. We don't want to lose, but we're not motivated by profit.'
Mr. Wallner last week agreed to buy the seven-story office building at 1406 E. Sixth, although the deal gives him a six-month contingency period to continue his due diligence, to prepare designs for the conversion and to obtain financing and city approvals for the project. The owner of the structure, which dates to 1916, is a partnership led by Richard Osborne, the Mentor-based investor and real estate developer.
Mr. Wallner would not disclose the proposed purchase price for the building, which is vacant. WKYC-TV, Channel 3, the largest tenant, moved to a new building last year.
The building, the original home of the former East Ohio Gas Co., has stone medallions depicting different uses of natural gas on its limestone exterior. Mr. Wallner's conversion plan, which for now exists in the form of maps of the building's floors sketched in ink, includes condo units ranging from 700 to 3,000 square feet, some with two-story townhouse designs within the building.
'I'm thinking seriously of adding one to two floors of penthouses on top of the building,' Mr. Wallner said.
The first and second floors would be used as office or retail space due to tall ceilings on those levels. Because the structure is of steel construction, the building will be easier to adapt than other apartment conversion projects downtown because it has fewer interior walls. It also will have an indoor parking garage in the basement.
The building is not a typical location for a downtown housing development. Most are clustered in the Warehouse, Gateway or Theater districts, or near Cleveland State University. The building instead is in the heart of the Central Business District across from the Federal Reserve Bank of Cleveland and the Cleveland Board of Education Building.
However, Mr. Wallner said his project benefits from security at the Fed and from nearby renovation of the Old Arcade as a Hyatt Regency Hotel. It also offers views of downtown's premier office buildings and proximity to the city's mall area.
Tom Bier, director of housing research at Cleveland State University's Urban Center think tank, said recent surveys he has conducted show some people who want to live downtown don't want to live near the nightlife of the Flats or Warehouse District.
'Neat,' is Mr. Bier's response to the project. 'It's in the heart of things but not in a hubbub area.' As far as condos go, Mr. Wallner considers downtown a largely untapped market for them. There have been only two for-sale projects developed downtown in the past decade; most residential units are rentals.
'There's a segment of the population that wants to buy,' Mr. Wallner said.
Mr. Wallner said he already has discussed his plans with the city's Economic Development Department and the nonprofit Downtown Cleveland Partnership. He also has talked with an affiliate of the Cleveland Tomorrow economic development group that lends money to real estate projects that can serve as catalysts for more development. Cleveland Councilman Joe Cimperman, whose Ward 13 includes downtown, pledged his support for the project.
'(Mr. Wallner) is tapping into something I hear about every day: `When are we going to be able to buy something to live in downtown?' I think the lack of for-sale housing has kept downtown from really taking off,' Mr. Cimperman said.
Mr. Wallner said he has retained Marous Bros. Construction Co. of Willoughby as the design-build contractor for the projec
t. While King James has extensive construction experience, Mr. Wallner said Marous has overseen several downtown rehabs, and the NBC Building is a more complex project than his company has undertaken.
The current owner, Mr. Osborne, bought the building in 1996 as part of a block-long complex from First Union Real Estate Investments Inc. following a bitter but unsuccessful effort to take over the company. Mr. Osborne frequently sparred with the city over efforts to redevelop the property. He tore down an old, unmarketable office building next door on Rockwell Avenue for a parking lot that Mr. Wallner plans to lease as part of the transaction.
Mr. Osborne did not return a call from Crain's Cleveland Business at deadline Friday morning.