The tower renovation at Erieview will include a luxury hotel W

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The impending 40-story tower redevelopment at Erieview will bring a W hotel – a luxury brand – to downtown Cleveland.

Members of the Kassouf family have signed an agreement with Marriott International Inc. to add a 210-room W to the project. The Kassouf are planning a more than $ 90 million renovation of the 1960s office tower, where apartments, housing and a restaurant on the 38th floor will fill many vacancies.

Operated by Marriott, the W would be the second luxury hotel in the city center. The only other property of this caliber in the CBD is the Ritz-Carlton Cleveland, which opened in 1991 and was remodeled a few years ago.

“Cleveland is ready for this next level of luxury and entertainment,” said Elias Kassouf, vice president of the property group, in a written statement. “Our vision is to position the property as a premier destination in Cleveland for visitors and residents of Cleveland.”

The Kassouf bought the office building and adjoining Galleria shopping center in 2018, in what public records show as a $ 17.7 million transaction. The complex includes a garage with 421 places, with the possibility of adding about 100 places by transforming a former cafeteria into a parking lot.

The W will occupy the lower eight or nine floors of the tower, transforming the lobby into a sort of living room, with plush furniture, mood lighting and a bar. The hotel provides a 15,000-square-foot ballroom and event center, as well as a full-service spa and gym.

The office tenants will occupy approximately 300,000 square feet of the two-strip building, with 227 apartments nestled in between. The apartments are planned from the 17th to the 28th floors.

A stacking plan of the fourth tallest tower in the city center shows the developers are also aiming to resuscitate high-rise restaurants. A restaurant and bar will occupy the top usable floor of the building.

This space was once home to Top of the Town, part of the once venerable Stouffer’s group of restaurants. The Haut de la Ville closed in 1995, and the upper floor was converted into offices.

“The 360-degree views are breathtaking and we will be bringing an elevated restaurant concept to match the experience,” Joe Kassouf, another vice president of the family-owned group, said in a written statement.

Marriott has 24 W hotels in the United States, in cities such as Atlanta, Chicago, Los Angeles, Nashville, New York and Philadelphia. The company describes its properties as ‘bold’ and ‘provocative’, with an emphasis on music, wellness, fashion and design.

“The Erieview Tower and its prime location in the city provide the perfect setting for a new W hotel,” said Neel Lund, vice president of global development for Marriott’s W and Edition hotels, in a written statement.

The Kassouf brothers are leading the redevelopment, with their father, longtime real estate investor and parking mogul James Kassouf, in the background.

The tower project does not include the long-suffering Galleria, a two-story glass-enclosed shopping complex that is largely vacant. But consultants working with the Kassouf said the Galleria was the subject of conversations between the owners and Marriott.

“In our mind, it’s important that the entire building be revitalized, including the Galleria. But that was the most logical way to start,” said Anthony Delfre, Managing Director and Managing Director of Brown Gibbons Lang & Co financing together.

Construction of the tower is expected to start in early 2022, positioning the hotel for opening in early 2023. Full conversion of the building could take 24 months.

Delfre said most of the funding for the project is in place, including state and federal tax credits for historic preservation. Erieview Tower, also known as Erieview Tower, gained a place on the National Register of Historic Places in 2017, making it eligible for incentives.

But the Kassouf, like many developers pursuing large and difficult transactions in Ohio, are also hoping to secure tax credits through a new state program for so-called “transformational” projects. The Ohio Department of Development recently rolled out the Transformational Mixed-Use Development Program website and plans to release the first app soon.

The General Assembly has allocated $ 100 million in funding to the program each fiscal year from 2022 to 2025. Up to $ 80 million of these grants can go to projects in major cities.

The state plans to solicit nominations and award prizes once per fiscal year, based on a competitive scoring system. Consultants expect the demand for rewards to exceed the supply.

The Tower at Erieview team is likely to seek credits of $ 8-9 million.

“This is the last piece of the puzzle, quite frankly,” said Delfre, who expressed optimism that the project would be a success, with lenders and tax credit investors lined up and the Marriott deal in hand. .

Adding a W would have ripple effects throughout downtown as more rooms come online – at higher rates.

“Because there is only one luxury hotel… there may be room for an additional upscale property to successfully enter the market,” said Laurel Keller, vice president senior valuation and advisory at Newmark real estate brokerage in Cleveland.

But she noted that there are already five full-service downtown hotels affiliated with Marriott. This critical mass raises questions as to whether there is room for all of these flags.

The 484-room Westin Cleveland Downtown hotel, the closest property to the Tower in Erieview, is the subject of a foreclosure lawsuit. Brokerage CBRE Group Inc. is soliciting offers from potential hotel buyers on behalf of a court-appointed receiver.

The owners of Renaissance Cleveland Downtown near Public Square are planning a major overhaul of the historic monument. Canadian host company Skyline Investments Inc. has not said whether this makeover would usher in a new brand.

The pandemic largely halted the pipeline of new hotel projects downtown, as existing properties struggled and development funding dried up. Lenders are still wary of hotels, Delfre said, but the long-standing relationships and mixed-use nature of the Tower at Erieview project helped keep the deal alive.


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