Tuesday, December 11, 2012

FitzGerald plan: sell Ameritrust Tower for $27 million, have new county HQ built next door

The Ameritrust Tower and rotunda, ghosts on downtown Cleveland's landscape since 1996, could be revived if Ed FitzGerald gets his way.

Cuyahoga County's executive wants to sell the Brutalist high-rise and the classic bank building for $27 million to Geis Co., which would build a new county headquarters next to the tower and lease it to the county for about $6.5 million a year.

The new, eight-story headquarters at East 9th Street and Prospect Avenue would share two parking garages and a new pedestrian bridge with the 29-story tower, which would be converted into apartments. The rotunda would house stores and possibly a public space.

If the county council approves the deal next month, construction would start right away and could be finished by July 2014, FitzGerald says.

The Geis Co. proposal could exorcise a controversial deal that has haunted the county since 2005. The previous government bought the Ameritrust complex that year for about $22 million as a site for a county HQ, then spent an equal amount ridding it of asbestos, paying its broker and buying a second parking garage.

With the sale, the county would recoup more than half of its $45 million investment. It would also move out of the 1950s-era administration building at Lakeside and Ontario and other offices around town.

"The building we're in now is outdated, inefficient, and duplicative," FitzGerald said during an interview today. His consultants project that the county could lower its annual occupancy costs by $6 million by moving. So the county would recoup its losses on the Ameritrust complex over time.

In a way, FitzGerald is bringing the county full circle, back to East 9th and the same headquarters site that Jimmy Dimora, Tim Hagan, and Peter Lawson Jones picked in 2005. But there are big differences between the old and new plans.

Dimora and Hagan wanted to tear down the tower and build a much larger headquarters than the 222,000-square-foot building FitzGerald and Geis envision. The old plan also had the county constructing and owning the headquarters. Geis' offer is a sell-build-lease deal with an option to buy after 26 years.

FitzGerald is confident the county will lower the cost of government by moving. But that could depend on a lot of things going right. That includes his hopes of selling the current administration building site, which is right next to the medical mart and convention center, to a hotel developer.

But FitzGerald doesn't have a buyer for the site yet. He didn't get an offer he liked in this round of bidding. He hopes to try again in the new year, perhaps after the convention center opens.

The county has for-sale signs on 13 properties, including the old juvenile justice center and the county archives building in Ohio City. Announcements about the sale of several more should come in January or February, FitzGerald said.

The public will have about 45 days to examine the Ameritrust and headquarters deal and the alternatives the county rejected. County council president C. Ellen Connally says the council will hold meetings on the proposal tonight and Jan. 2, 8, and 22.


Anonymous said...

What abut the other properties?

Anonymous said...

C Ellen Connolly?? The new and improved Jimmy Demora and Frank Russo....

Erick Trickey said...

Anonymous #1: Good question -- I added a line about this.

Plans for the other properties weren't announced today. FitzGerald said he should have more deals ready in January or February. He's also going to say no to some bids and hold out for a better offer.

Roldo Bartimole said...

Do we know if there are any other costs beyond the $6.5 million a year, which over 25 years - if there is no chance of annual increases - is $162.5 million that the County will pay. Further, does it include ALL county offices or will there need to be other space acquired. Was there any study done for the County on the real value of this deal.

Erick Trickey said...

Roldo, I believe the $6.5 million is the average rent plus utilities on the building. I think other costs are included in the lease. But I will double-check this.

You are right to ask -- the fine print will determine how much this move reduces the cost of government.

I don't think the county is acquiring any more office space. It's only looking to get one more building, a new storage facility (I think because it wants to sell the county archives on Franklin). The county is paring down. But the HQ won't include all county offices, because there are plenty of buildings it is keeping (Justice Center, board of elections, etc.)

As for studies, FitzGerald is relying on his consultants, CBRE and Allegro.

Anonymous said...

How much is the county paying for its current buildings annually? if its more that 6.5 million a year, then this deal makes sense. roldo is getting ready for one of his typical "corporate giveaway" articles. can someone do the math before the rhetoric?

Erick Trickey said...

Anonymous #3: About $12.5 million a year in operating costs on the buildings the county wants to vacate. So the deal does make sense, if the county's numbers and assumptions are right.

I will do some more math for a follow-up post later on.