Factory Square Project Weathers Recession

Long-delayed Northside rehab finally begins

After five years of wondering what all the fuss was about, Northside residents have noticed something different at the old American Can factory the past few weeks: The buzz of construction.

The factory — the site of the long-proposed Factory Square project that would convert the vacant 80-year-old building into 110 loft apartments and about 12,000 square feet of commercial space — has seen little activity since 2005, when developers Bloomfield/Schon Partners bought the property with the help of a $750,000 city loan.

For nearly six years, there were few outward signs of any progress, causing critics to ponder whether the city wasted its money.

"For so long, walking around Northside, people have been asking me, 'Are they still doing it?' because it's been so long since anything's been done," says Bruce Demske, president of the Northside Business Association.

In recent weeks, however, the old American Can site has been a swarm of activity. Buoyed by the June investment of $1.6 million in federal economic stimulus funding, announced with much fanfare and a visit from Vice President Joe Biden (pictured above), work has begun on the project's parking lots, sidewalks, lot grading and utilities, says Bloomfield/Schon partner Ken Schon. So has work on the building's exterior including paint, roofing work and restoration of the steel window frames.

The work signals that the $22 million project still is very much an active venture, supporters say. Since almost its start, the project had been hampered by environmental issues and a lack of funding.

Operated by the American Can Co. for much of its life, and later by Cleveland Wrecking, the five-story building at the corner of Hamilton Avenue and Blue Rock Road had been largely vacant since the 1960s. Because of its machining past, the site was contaminated by toxic PCBs, a byproduct of the oil used during American Can's heyday.

When Bloomfield/Schon took on the project on in 2005, and because they were converting the factory into residential space, the firm knew some environmental work would have to be done. To that end, more than a year into the planning process, they finally secured a $750,000 Clean Ohio Fund grant from the state to do the work. Unfortunately, developers soon found the contamination was worse then expected, Schon says.

"Part of the grant money was for removing wood block floors, where everyone expected the PCBs were, but the more we got into it, we found that the PCBs had seeped into the concrete floor in a couple of different places," he explains. "It turned out to be a much bigger job than anyone had expected."

The find also triggered a debate between state and federal Environmental Protection Agencies as to the best way to deal with the contamination, which led to another long delay. For almost two years, the agencies held work off as they decided to require a 2-inch concrete cap over the contaminated areas, encapsulating the PCBs. Bloomfield/Schon, which already was having trouble obtaining financing, then had to find more funding for environmental remediation.

Meanwhile, the economy had slackened and banks weren't making loans, which delayed work even further until the stimulus funds finally got things moving again earlier this month.

Tom Jeckering, president of the Northside Community Council, says he'd heard from many residents over the years concerned that nothing was ever going to be done. He's also glad to have something tangible to show them.

"The project wasn't happening fast enough, but I'm not going to say anyone was unhappy with it," says Jeckering, who also is an architect. "Given the cards (developers) were dealt, especially the economy falling off, I'm thrilled (with the project's advancement). Those guys have had challenges at every turn, taking an old, contaminated factory and making it safe to live in.

"It has taken time, but I don't think anyone could have moved faster," he adds.

Michael Cervay, director of city's Community Development Department, says he is pleased with the progress, as well.

"The main frustration has been that Factory Square has been a victim of the economy and the banking situation," he says. "From the start, it's been a good project. (Bloomfield/Schon) took it through the predevelopment phase quickly, but when the time came to move into actual development, the bank loans just weren't there."

That likely will change in the next few weeks. At a recent Northside Community Council meeting, Schon told members his firm has secured more state funds, this time a $800,000 grant from the Ohio Department of Development, to finish the environmental work. Also, it is finalizing the Federal Housing Authority loan process that would finance the rest of the project.

The influx of funding should ensure work continues uninterrupted with the goal of opening Factory Square, finally, sometime in the fourth quarter of 2011, Schon says.

"This has been like finally getting permission to get started," he adds. "It's time to test everyone's vision for this property, from us to the city to community leaders. Hopefully, it'll justify all the work everybody's put into it. We're going to have a little party. Our shop has had a lot riding on this — a lot of our treasure and a lot of our reputation."

Meanwhile, some critics have questioned the amount of city and state funding that has kept the project afloat.

From the initial city loan that allowed Bloomfield/Schon to buy the property, to additional city, state and federal grants and tax incentives, the public money invested in Factory Square has soared into the millions. In June, City Council approved an eight-year, 75 percent community reinvestment tax exemption for the project that will save Bloomfield/Schon nearly $2.1 million over the life of the agreement alone.

Cervay defends the city involvement, even while Cincinnati government is facing a $50 million budget shortfall in 2011.

"The whole reason the city got involved was that the American Can factory was that it's a brownfield site," Cervay says. "It had PCBs in it and nobody was going to stick their necks out and get involved with it without the city investment. The fundamental point is that nothing was ever going to happen with the American Can site — ever — unless the city and state stepped in with some financial help."

Schon points out that public funding is the norm for project on the Factory Square scale.

"Any urban project that I've ever heard of has been a partnership with its community, whether it's here in Cincinnati, in Akron or Ithaca, N.Y.," he says. "Believe me, they come with a price, though."

That price, he says, is time and labor with no guarantee of a reward. And most of the grants the project has won require paying workers higher rates, which pumps money into the local economy.

"But the main price is always time and labor,” Schon adds. “It's taken us five years of work to get everyone singing from the same sheet of music on this project. Five years and who knows how many thousands of hours."

Scroll to read more News Feature articles


Join CityBeat Newsletters

Subscribe now to get the latest news delivered right to your inbox.