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The Suburbanite
  • Canton Council OKs loan for Hercules project

  • Calling it “the last hurdle” toward financing a redevelopment of the former Hercules Engine site, developer Robert Timken applauded City Council for voting in favor of a $3 million loan for the first-phase of the project Monday.

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  • Calling it “the last hurdle” toward financing a redevelopment of the former Hercules Engine site, developer Robert Timken applauded City Council for voting in favor of a $3 million loan for the first-phase of the project Monday.
    “This puts us in a position to close on financing and move forward,” Timken said.
    Council voted 10-1 on the loan agreement. Councilman James Griffin, D-3, was absent Monday. Councilwoman Mary Cirelli, D-at large, voted no, saying it was too big of a risk. Council amended the ordinance prior to voting, adding language that makes it contingent on other votes it has yet to cast, including issuing bond anticipatory notes.
    The city will use capital improvement dollars until the note is issued and then borrow against its treasury to help developers build 95 market-rate apartments. The first phase is estimated at $28 million.
    Cormony Development will make interest-only payments of 4 percent on the city’s loan through 2015 and then principal and interest payments thereafter. The first $1 million must be repaid in two years, while the balance will be repaid over 20 years.
    “It’s going to be good for the city,” said Councilwoman Chris Smith, D-4, who is excited that the project is in her ward. “It’s going to be good economically, especially for an area and building that’s been so blighted for years.”
    Smith, calling it “the start of something big,” said she hopes the project will attract new businesses. The site is located at Market Avenue S and 11th Street SE.
    Cirelli raised concerns about how the city was spending its money. She said members of council and the community are under the impression that the city is facing a financial shortfall.
    Law Director Joseph Martuccio acknowledged her concerns, but stressed that the money was not coming from the general fund, which is used to pay for such operations as police and fire.  
    Huntington Bank is providing $13.8 million for the first phase of the project. Skanska, the construction firm, has also pledged $2.7 million. Cormony Development has $5.5 million of equity that will be invested and an additional $3 million from the Clean Ohio Revitalization Fund.
    While the first phase will be 95 market-rate apartments in 125,000 square feet of the old industrial complex, future phases have included retail and commercial space, a hotel and convention center. The entire project, which initially did not include phases, qualified for $36 million in state and federal historic tax credits.
    Now phased, the residential housing project that makes up the first step in an overall renovation of the 26-acre site must be completed by the end of 2014. Cleanup work has been underway and construction work could begin some time in the next three months, developers recently told council.
    The Hercules Engine Co. shut down in 1999. The property was purchased by Broadview Development in 2005. Broadview Development is comprised of the five members of Rockville, Md.-based Cormony Development and Marshall Belden Jr. The project stalled in 2008 when the banking crisis prevented developers from securing private financing.
    Page 2 of 2 - The Canton Community Improvement Corporation approved plans for the project last month. Timken has said similar projects have worked in other cities, including Cleveland, Akron and Hamilton. He said that such housing will draw young professionals, including those in the growing local oil and gas industry, and empty nesters.
    “This has taken not only a bunch of faith, but a lot of time and due diligence,” Timken said. “...Now it’s time for us to execute.”
    Mayor William J. Healy II, a Democrat, recalled how the project “came to a screeching halt” shortly after he took office and that he’s been trying to get it back on track ever since.
    “It’s been a very trying time to get it back on track,” Healy said. “I know he (Timken) has been working like crazy. ...We’re very excited about it. This is a big statement by council.”
    Reach Matthew at 330-580-8527 or matthew.rink@cantonrep.com.
    On Twitter: @mrinkREP

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