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The 515 Euclid Ave. parking garage, at right, could be the base of a high-rise apartment tower developed by Stark Enterprises, through a joint venture with an investor group led by Reuven Dessler.

(Michelle Jarboe/The Plain Dealer)

CLEVELAND, Ohio - A vision of an 18-story apartment tower rising above a downtown parking garage inched closer to reality in December, with the formation of a joint venture between an outspoken developer and a quiet businessman.

Stark Enterprises of Cleveland consummated a deal last month with Reuven Dessler, the managing partner of an investor group that owns a parking structure at 515 Euclid Ave. By joining forces, the investors aim to support a high-rise residential project just as a handful of developers are jostling to see who will be first in decades to finance and construct such a building in the city.

Hints about the deal popped up in mortgage-modification records filed in mid-December. Dessler, a real estate investor and co-founder of the Mazel Co., a closeout-merchandise wholesaler based in Solon, made adjustments to an existing mortgage on the Euclid Avenue property with Thrivent Financial.

The documents don't reveal the terms or structure of the joint venture. But one of the filings mentions developer Bob Stark, president and chief executive officer at Stark Enterprises.

In a phone interview, Dessler confirmed that the development joint venture is in place. But he wouldn't discuss the details.

"It's still premature," he said. "I'm not sure what there is to write about it at this point. But with 1,800 people waiting for apartments in downtown Cleveland, anything is newsworthy."

Public records show that there hasn't been an outright sale of the property, a seven-story, 524-space structure that includes air rights for vertical construction.

"What we're comfortable saying is that we're going to develop this project," said Ezra Stark, chief operating officer of Stark Enterprises, the developer behind Westlake's Crocker Park, the Eton Chagrin Boulevard shopping center in Woodmere and other retail-centric properties. "We're going to partner with [Dessler's group] in terms of developing it."

Ezra Stark wouldn't divulge project costs, potential rents or aesthetic details. But he said the developer is working with two architectural firms - Westlake Reed Leskosky in Cleveland and Boston-based Nadaaa - on a design. He characterized the project as "Millennial-driven housing," with 200 or so units largely aimed at renters in their 20s and 30s.

Stark aims to start construction after the Republican National Convention, which will be held downtown in mid-July. The apartments could be finished by late summer 2017, Ezra Stark said. That's a quick turnaround, but the developer has the benefit of the foundation and infrastructure of the 515 garage, which was designed and built to support a residential tower.

The 515 Euclid garage opened in 2005 and was built to support a residential tower. A decade later, plans for that project are materializing under a different property owner and development team.

Ohio Savings Financial Corp. finished the garage, lined with street-level retail spaces along Euclid, in 2005. Dessler and other investors acquired the property through a 2011 bankruptcy auction. At the time, real estate brokers touted the air rights as a major selling point.

"I think it will be a great project, and I wish Bob Stark the best of luck," David Goldberg, who oversaw development of the garage for Ohio Savings Financial Corp., said of the apartment plans. "I think it will be very successful, and I'm glad to see that our original vision is coming to fruition."

Dessler wouldn't identify his partners, beyond Stark. A recent mortgage filing also mentions Jacob Koval, the other Mazel co-founder. Harbor Group International, which owns the nearby 200 Public Square office skyscraper, manages the garage but has no ownership stake.

"My strength is to pick the right partner to do something with," Dessler said, pointing to Stark's track record in the suburbs and big ideas for downtown.

"I like his vision," Dessler added. "The passion that Bob Stark has, his passion, drive and dedication, it supersedes anything."

Stark expects to take advantage of 15 years of property-tax abatement - a sweetener the city routinely grants for residential projects - for the apartments.

The developer also is talking to the city about modifying an existing tax-increment financing district along lower Euclid Avenue. That district, established in 2002, gives landlords the ability to capture increased property-tax revenues from their projects and to divert the funds to pay off construction debt. Ohio Savings Financial Corp. tapped that financing mechanism to build the 515 garage. Now Stark hopes to take advantage of 15 years of TIF revenues once the tax abatement burns off.

Ryan Sommers, the financial consultant on the project, said Stark also is talking to the Cleveland-Cuyahoga County Port Authority about bond financing that would allow the developer to avoid paying taxes on construction materials.

"Large-scale projects are benefiting from stronger market conditions, and you're seeing capital structures that are less complex than those of the past," said Sommers, alluding to the complicated underpinnings of developments including the Flats East Bank and The 9.

The 515 proposal is simpler, he said, but "it's still very costly construction. You have to go vertical, and it's in the center of the central business district."

Building apartments atop a garage also is less ambitious than Stark's other downtown plan, for a mixed-use project called nuCLEus in the Gateway District, just a short walk away.

Designs unveiled last year showed offices, stores, restaurants, a hotel suspended over buildings and walkways and a 54-story tower, most of it filled with apartments. Stark acquired the Gateway District site, north of Quicken Loans Arena, in 2014 through a joint venture with J-Dek Investments Ltd. of Solon.

Ezra Stark said that plans for the 515 high-rise aren't an indication that Stark has lost interest in nuCLEus. "They're completely different flavors," he said, adding that apartments on Euclid Avenue will be less costly to rent than those near The Q. "So it's going to attract a very different person."

Stark still is assembling financing for nuCLEus and hopes to start construction on the property - now a parking lot, a dingy garage and a small retail building - after the GOP convention leaves town. Demolition of the existing structures isn't likely to happen before the convention. Construction would take at least two years.

"We have tens of millions invested in nuCLEus, and we are for sure doing it," Ezra Stark said, adding that the project team is negotiating with the city over public financing. "It's a much harder lift. It's a much more complex project."