Sandusky approves loan for Rieger developers

Sandusky city commissioners approved a $150,000 loan so developers can transform century-old hotel rooms into swanky pads for senior citizens.
Andy Ouriel
Feb 19, 2013

 

In early 2012, Columbus-based housing organization Buckeye Community Hope Foundation, a nonprofit, secured enough money to renovate the Rieger Hotel at Jackson and West Market streets.

It’s an $8 million project, mostly funded through tax credits aimed to preserve an iconic structure and spur economic development downtown.

Scheduled for a late 2013 debut, developers want to sculpt the legendary property into a 37-unit complex for senior living.

The building’s first floor will likely include some office space, and perhaps retail and an eatery.

City officials recently finalized the loan and previously provided a decade-long tax break to streamline the process. The tax break should save at least $110,000 in taxes in 10 years.

“The project is financed largely with senior housing tax credits,” said the city’s financial consultant, Greg Sherman. “Without the tax credits, this project would not have worked financially. So we provided a small loan to help the company obtain over $5 million in tax credit financing.”

City officials provide these types of loans to encourage builders to improve infrastructure and facilities in low- or middle-income neighborhoods.

The loan ideally parlays into injecting additional income into an area while bolstering job opportunities, effectively turning an empty, decrepit property into something productive.

Today the Rieger is valued at almost $102,000, according to the Erie County auditor.

The most recent entity to operate inside the facility, about 20 years ago, was a nursing home. Before then, the 70,000-square-foot facility provided lodging to visitors. The Rieger was built in 1912.
Foundation workers said they want to make a long-term commitment in Sandusky.

Local studies concluded the area’s senior population, 65 and older, should boom from 18,000 today to about 26,000 in eight years, showing an obvious need for more senior housing.

“The redevelopment of the Rieger is going to be great in terms of serving the unmet needs of seniors who want to live downtown,” foundation vice president Roy Lowenstein said.

 

Comments

Contango

"Swanky pads?" Read: low income housing.

Any political kickbacks from the wealthy execs. of the NFP to help create this boondoggle?

Taxpayer fueled crony capitalism at it's best.

Do a websearch on the salaries of the Buckeye Community Hope Foundation execs. Altruism sure does pay well.

Darkhorse

The project is getting off to a slow start. I hope that the Reiger people can finish on time. I sure don't want to see the building revert back to the city and it just may happen if the Reiger doesn't get a move on and start this project sooner then later. There should be some serious concerns about the delay and whether they will finish on time.

donutshopguy

So if this project goes belly up the taxpayers get stuck with a $150,000 oops ?

Trustafarian

Relax. It's swanky pads for senior citizens in downtown Sandusky. What could go wrong?

PerkinsVoter

This building was recently sold for $350,000 by Market Street, LLC whoever they are. Who is this Market Street company? They had their taxes lowered because the property that was valued at $247,000 in 2006 was lowered by the board of revision to only $104,270 in 2008 yet sells for $350,000 and now valued at $101,450. What gives Darkhorse? You seem to be in the know of things.

Elemenopy

Genius! Let's use money to house senior citizens to develop a FIVE-STORY building. That should be fun to lug groceries and sundries up and down. I know I would love to live on the fifth floor of a downtown building when I'm in my seventies...

Trustafarian

If only there was a way to get to the fifth floor without using steps.

Darkhorse

If you are really interested PerkinsVoter, go pay a visit to the auditor's office and ask Mr. Jeffrey why he lowered the taxes on the Reiger. He should be able to tell you. It is all public knowledge, all you have to do is go and ask. Any property owner can go before the Board of Revision and ask for lower taxes if you feel the tax base is not fair.

PerkinsVoter

I have been to Jeffrey's office and he dodged all of questions about my own too high taxes. He is a joke and I will vote against him the next time. If I have to hire another appraiser for another board of revision hearing, Jeffrey's says that the appraiser must be present during the hearing which will cost me more in appraisal fees, depending on how long the appraiser will have to wait to be there including travel time. I don't see Jeffry's paying any taxes. Does he live in a card board box like I soon will be? I also pay taxes to Sandusky.

Trustafarian
wiredmama222

what has been done so far with the money they had? Was this not listed on the Chief of the Fire Dept list to get some things done? I thought it was. If not, please correct me. I would have thought that would be done FIRST before anything else was done: like a building wide sprinkler system? Is that in place?

But why, if this city is SOOOO strapped, is it loaning anyone any money?

For weeks now, we have been reading stories about how bad the city finances are, so why is the city commission giving a break to this? I would think the commissioners wouldn't do a thing until the more NECESSARY things in town are done. According to this very paper were there not more important things needed? Again, please correct me if I am not wrong about that, but I thought that is what I was reading as recently as a week ago?

T. A. Schwanger

@ Wired:: From Sandusky Register Sept. 2012.

Andy Ouriel Sep 18, 2012

Rieger building project slated for November

An iconic Sandusky structure may soon transition into a vibrant living space for senior citizens.

Tentatively, available space and rent will be:
• $389 per month for a large studio apartment, four in total;
• $499 per month for onebedroom apartments, 16 in total, from 650 square feet up to 751 square feet.
• $599 per month for twobedroom apartments, 17 in total, from 850 square feet up to 1,000 square feet.

The $150,000 is funded through an HUD Revolving Loan Fund--money the City receives from HUD for economic development. Once paid back, the money is recycled to other commercial development.

The concern is will the money get paid back by Buckeye?

wiredmama222

That doesn't answer my question at all. What about the one with the fire department? There was one in which the Fire chief went around checking all the vacant buildings in town, stating which ones needed fire updates. I could have sworn this one was one of the pictures. But since I do not know how to go back and look it up on here, I shall go down to the SR archives and see if I can find it there. I am sure there was an article about the buildings needing fire protection/or being torn down. Pretty sure this was one of them that needed updating. Also, if the property is worth only worth so little, why did the city give them so much?

T. A. Schwanger

###

@Wired: You asked--""""But why, if this city is SOOOO strapped, is it loaning anyone any money? For weeks now, we have been reading stories about how bad the city finances are, so why is the city commission giving a break to this? I would think the commissioners wouldn't do a thing until the more NECESSARY things in town are done""". I answered.

For fire concerns regarding this building, try calling Fire Chief Ricci at 419.627.5822 or email pricci@ci.sandusky.oh.us. Chief Ricci is vey approachable and will be glad to answer your concern. Then post the answer on this article.

wiredmama222

I understand about the HUD fund. In fact I know the people down there very well. Why is it YOU cannot answer, again, the questions I ask when I ask YOU? Do you or do you not know about the Reiger building and the fire marshall? If not, just admit it!

T. A. Schwanger

##
@ Wired

There is nothing better than getting the answer directly from the city official directly involved in this case the Fire Chief.

I would hope with the major renovation Buckeye is proposing, fire upgrades including sprinklers will be included if not mandated by fire code.

PerkinsVoter

Thamk you trustafarian, my mistake as I must have spelled his name wrong before. The other Jeffrey must be a relative because both got a tax reduction.
http://erie.iviewauditor.com/Res...

reporter54

Swanky pads could mean low income seniors are out. It says senior housing but nothing about low income seniors so I don't know why you'd assume it's for low income. Actually, that is probably what will be needed but I'm sure most of you would prefer to see grandma living in a box under some bridge because she can't afford a swanky place downtown.

Trustafarian

My Grammy lives in a van.....down...by... the... river!!!!!

wiredmama222

hope she has a gun....lol

mikel

Trust..way to funny! I remember the "van by the river" skit.

Contango

Low income housing?

"Buckeye Community Hope Foundation is a 501(c)(3) not-for-profit corporation that creates and supports new opportunities for those who need them most: seniors, struggling families, underserved students and misdirected youth."

http://buckeyehope.org/

T. A. Schwanger

It is good to see private investment is finally going to do something with this long time vacant property. Remember, at one time this property was held by the City of Sandusky.

The one concern is will the City recoup the Revolving Loan Fund money so the funds can be re-used elsewhere?

From the City/Buckeye Community Hope Foundation Agreement::::

B. ANNUAL SURPLUS CASH PAYMENTS:::Borrower shall be obligated to make annual payments to Lender under this Promissory Note to the extent of funds available equal to twenty-five percent (25%) of surplus cash (excluding tenant security deposits) remaining at the end of each fiscal year of the Borrower from the operation(s) of any portion or portions of the Project by Borrower or any operating entity (the “Annual Payment”).

In any year where Surplus Cash is negative, no payment is due under Section V,B above and Borrower shall not be in default for failure to make a Surplus Cash payment in any one year if that failure is due to negative Surplus Cash in that year.

wiredmama222

TA Schwanger: so if there is no money by rental, then they cannot go after the money? If I am reading this correctly, they cannot go after money if there is a negative balance. Meaning that if this place isn't rented, they cannot go after the money. Right? So the funds cannot be recouped?

wiredmama222

Has the city "recouped" all the money they have loaned in years gone by? Or is there money still outstanding such as that loaned to others who were given funds to upgrade or start a business?

Pastor Ron

Greg Spatz (232 Jackson St. LLC)bought it a few years ago from the city for $1. Seems like he got a pretty good return on his investment. Last I checked he was behind on the taxes as well. Looks like when the title transferred there was a $6300 delinquency. Good thing this new group has tax dollars to pay that.

http://erie.iviewauditor.com/Dat...

Darkhorse

The tax delinquency was to be subtracted out of the money Spatz got out of selling the building off. I would say $1.00 turned into a profit of $350,000 and he is laughing all the way to the bank. What a return on investment.

KURTje

Yeah, older folks knew a better economy.

chongo

well lets see how many senior only high rises we can get downtown. Shouldn't something like this be more oriented toward a younger demo? that way these people get downtown and spend they money downtown... don't see much coming out of the shoreline highrise that brings in a boat load of money into downtown. not to mention the shoreline isn't the most well kept place either.

Phil Packer

Senior apartments upstairs, tattoo parlor and a gay bar downstairs.

wiredmama222

I take it their parking lot is the one across the street from this building? Which means these elderly people, if they have a car, will have to cross a street that is protected by only a flashing red light. Correct? I hope that once opened, the city has some plan in place for better protection for those who still drive and have to cross that street? Or are they to use the parking garage? Parking next to the building may not have sufficient space with the SR and others parking there during the day. Has anyone thought of this yet?

usconstruction@...

The Rieger development will be a great asset to Sandusky. This is a key stone property that has touched the life of many Sandusky residents.

Thank goodness that someone will finally develop this project.The project will provide housing to many seniors and will provide a decent home for Sandusky citizens. It will also spur retail development that will create jobs and activity downtown.

The City made a wise choice in supporting this project. The previous developer had the insight to preserve the project and obtain Historic Tax credits that made the project feasible. All propert taxes have been paid in full and the original developer obtained only partial reimbursement for his investment.

Had the city not supported this redevelopment it would have turned into another Keller building, a building that will be torn down at the City's expense instead of capitalizing on one of its historic assets.

The Federal and State Government, by awarding credits for redevelopment, Spatz, the City's Foundations and the City Management should be applauded & praised for sponsoring this redevelopment.

Sandusky is moving in the right direction