CLEVELAND, Ohio — The longtime owner of a prominent slice of downtown Cleveland’s waterfront has put 5.6 acres up for sale, in a bid to spur new housing development on the west bank of the Flats.

Jacobs Entertainment Inc. is seeking $17.5 million for the property, a cluster of parking lots that belly up to a riverfront boardwalk between the Cleveland Memorial Shoreway and the company’s historic FirstEnergy Powerhouse. The land is roughly a quarter of what Jacobs owns in the area, where developer Jeff Jacobs established a substantial foothold more than 30 years ago and launched an entertainment district that was always meant to beget a neighborhood.

An updated master plan for what Jacobs is calling the Nautica Waterfront District shows residential towers along the Cuyahoga River and peering over the Shoreway. Jacobs views the waterfront parcels as the critical first piece of a broader potential development that could fill large gaps in the district with a hotel, townhouses, garage parking, recreation and green spaces.

Dave Grunenwald, vice president of development for Jacobs Entertainment, said that the company plans to hang onto its major Cleveland businesses: the Jacobs Pavilion amphitheater; the Nautica Queen river-cruise ship; and the Powerhouse, home to the Windows on the River event space and the Greater Cleveland Aquarium.

Jacobs also owns the Sugar Warehouse, a riverfront entertainment complex leased to Shooters, the Improv comedy club and the Music Box Supper Club; and the Harbor Inn, a long-running dive bar on Main Avenue. Neither of those buildings is for sale.

But, for the first time, Jacobs is publicly seeking land buyers to kick-start construction in the district — as long as any new projects will retain or replace enough parking to accommodate event-goers and visitors to the existing riverfront venues.

In a written statement, Jeff Jacobs described the site as “the most important 5 acres of waterfront space in downtown Cleveland,” touting the district’s views of the river and the city.

“The opening of Shooters and the west bank of the Flats as an entertainment attraction in 1986 began a new chapter in the evolution of downtown Cleveland. With the introduction of significant new residential choices, including condominiums, townhomes and apartments, the evolution continues,” he said, referring to ongoing residential demand in and near downtown.

Jacobs, president and chief executive officer of Colorado-based Jacobs Entertainment, has been focused on gaming and real estate elsewhere, including a billion-dollar project in Reno, Nevada. In 2016 and 2017, the Jacobs organization sold off its existing downtown apartment buildings, in the Warehouse District and the Nautica district.

Grunenwald wouldn’t say that Jacobs is done with development in Cleveland. He also wouldn’t say whether the 5.6-acre listing is a prelude to additional land sales in the area.

“Right now, our interest is just in putting this acreage on the market,” he said during an interview Thursday at the company’s offices above McCarthy’s Ale House in the Flats. “We want to invite developers who are experienced in high-rise apartments to help us figure out how to provide that.”

The listing, which went live Friday through the Newmark Knight Frank brokerage, is a bit unusual. Most of the site — 4.2 acres — is being offered as a straightforward land purchase. But Jacobs is marketing the rest of the property, the area closest to the Powerhouse, as air rights.

That means a buyer would purchase the right to develop the space above the existing parking lot, while Jacobs would continue to own the ground. And half of that air-rights block — about three-quarters of an acre — wouldn’t allow for vertical construction. To preserve views, Jacobs is restricting use of that portion of the site to elevated green space. The district master plan shows a single-story amenity deck in that area, with parking underneath and a swimming pool and landscaping on top.

Air-rights sales are more common in major cities, where the scarce supply and high price of land drive developers to create new parcels above railroad tracks, parking lots, freeways and other buildings. Cleveland was an early user of air rights, a century ago, for projects including the complex now known as Tower City and the Cleveland Athletic Club Building on Euclid Avenue.

“We haven’t had the need to do that very much in Cleveland,” Richard Sheehan, a Newmark Knight Frank managing director, said of air-rights transactions. “We have land. We have parking lots.”

But Jacobs wants to ensure that it has access to at least 750 parking spaces close to the Powerhouse, including a potential 200 spaces on the site that’s for sale. Today, Jacobs controls 2,000 surface parking spaces in the district, where pavement is the predominant land use.

Late last year, Cleveland City Council signed off on zoning changes to better prime the west bank for residential projects. The rezoning involved the Jacobs properties and surrounding land and buildings. It narrowed the permitted development in industrial areas to warehouses, breweries and other less-intense uses; trimmed the list of allowable retail projects to block uses such as car lots, funeral homes, car washes and strip clubs; and applied the urban form overlay, a zoning tool designed to encourage pedestrian-friendly development, to much of the neighborhood.

The Jacobs land is zoned to allow buildings as tall as 250 feet.

With new apartment towers rising downtown and in University Circle, people living and working at the Flats East Bank project just across the river and a wave of housing construction sweeping the near West Side, including at West 25th Street and Detroit Avenue just up the hill from the Nautica district, Grunenwald said it’s an opportune moment to test developers’ appetites — locally and nationally — for tackling the west bank.

Sheehan said there’s already “serious interest” in the waterfront site.

“It’s about location, and it’s about timing,” he said. “And in the location now, the timing is right. There’s enough cooking around there, and in Cleveland.”

Related stories:

Jacobs releases 2016 master plan for the Nautica Waterfront District in Cleveland

Harbor Inn sells, finally, to Jacobs affiliate; new management to step in