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Rest in Peace,
ARCADE'S FAILURE POINTS TO MORE DOWNTOWN PROBLEMS
Submitted by Roldo on Mon, 12/07/2009 - 11:35.
The highly-subsidized Hyatt Regency Cleveland and the historic 1890 The Arcade “may go up for auction at a Cuyahoga County sheriff sale”, according to an article today in Crain’s Cleveland Business by Stan Bullard. Failure of the Cleveland’s architectural gem points to continued economic problems in downtown Cleveland.
This is a severe blow to the notoriety being given to the comeback of Euclid Avenue and that section of downtown Cleveland at E. 4th Street.
A near $200 million beautification/transit project has recently been completed along Euclid Avenue, site of The Arcade.
“The 1890-vintage landmark is in the final throes of a foreclosure proceeding in Cuyahoga County Common Pleas Court,” Bullard wrote.
Not only is this a damaging blow to downtown Cleveland but a heavy financial cost to Cuyahoga County and the City of Cleveland, both lenders to the rehabilitation of The Arcade. Bullard notes that the County loaned $2 million. It is unclear how much of that is still owed. The city of Cleveland is still owed $948,000 of its $1 million loan.
Local foundations could also be hit with losses. The Gund and Cleveland foundations each loaned $750,000 to The Arcade’s restoration, Bullard wrote.
It is ironic that so much publicity has been given to the E. 4th restaurant/retail success when it is directly across the street from The Arcade at Euclid and East 4th Street. The Plain Dealer has played up the success at E. 4th Street, also the recipient of more than $10 million in public subsidies. Even the New York Times recently did an article touting the E. 4th Street economic success.
I made note of the problems at The Arcade back in July. The article also noted other government subsidies given to the renovators. See it here:
Paul Oyaski, Cuyahoga County development director, told Bullard, “We are trying to protect our interests.” He was not encouraging.
In all, The Arcade renovation has some $10 million in public subsidies.
“Ironically, Arcade LLC’s troubles loom as plans for a casino, a new convention center and a medical merchandize mart percolate in town, promising to rally the flagging hotel market,” writes Bullard.
The Arcade also has had some new retail space opening, according to the story. Although in a walk through the building, which runs from Euclid through to Superior Ave., I found continued vacancies in the retail portion.