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The Garfield Building, now largely empty, will become 125 apartments over ground-floor retail and, possibly, offices after a sale to the Millennia Companies of Valley View. The historic building, at East Sixth Street and Euclid Avenue, was long occupied by National City Bank.

(Michelle Jarboe McFee, The Plain Dealer)

CLEVELAND, Ohio -- A $6 million real estate deal that closed Friday bulks up the downtown Cleveland presence of the Millennia Companies, an apartment developer and landlord that - until late last year - had holdings in eight states but no foothold in its hometown core.

Real estate records show that a Millennia affiliate purchased the historic Garfield Building, at East Sixth Street and Euclid Avenue, at the end of last week. The Plain Dealer reported in April that Millennia planned to buy the empty office building and transform it into apartments over retail space, contributing to a wave of conversion projects sweeping the central business district.

After months of tweaking its plans, Millennia has settled on 125 apartments - down from the 170 or so smaller dwellings the landlord initially envisioned.

On average, the one- and two-bedroom units will run from 607 to 1,165 square feet and will rent for $1,095 to $2,220 a month, putting them near the higher end - but not at the top - of the downtown market.

Millennia plans to rechristen the building as Corning Place.

Construction on the $40 million project, which also will include 35,000 square feet of lower-level retail and, possibly, offices, is scheduled to start in June. The first apartments will open a year later, with the remainder completed by December 2016.

"We think demand is there for quite a bit of retail," said Nico Bolzan, president of Millennia Housing Capital Ltd., the financing arm of the Valley View-based family of companies. "We could have an office tenant coming in. We could have retail and a restaurant. We have a lot of demand but nothing lined up."

A handful of restaurateurs have inquired about the building, said Rico Pietro of Cushman & Wakefield/Cresco Real Estate, the Independence-based brokerage marketing the retail space. More notably, he added, Cresco is fielding calls from national clothing retailers - chains that wouldn't have looked twice at downtown a few years ago.

Now a larger residential population, of roughly 13,000 people, and a nationwide surge of interest in urban development has made Cleveland a contender, if not a slam dunk, for stores. Pietro wouldn't identify specific tenants who have asked about the 11-story Garfield Building, which features an ornate lobby long occupied by National City Bank.

Cleveland-based National City collapsed during the recent recession and was snapped up by PNC Financial Services Group Inc. in 2008. PNC gradually shifted workers out of the Garfield Building and other leased spaces and into the bank's office tower at East Ninth Street and Euclid.

PNC's lease at the Garfield Building ended in December. That expiration, and the challenges of filling older office space downtown, prompted Westcore Properties of California to sell to Millennia. Westcore unloaded the building for $2 million less than the company paid in 2008, records show.

Millennia plans to use federal and state historic preservation tax credits to assist with the renovations. The project, like other residential developments in Cleveland, also qualifies for property-tax abatement. Bolzan said Millennia has secured 135 nearby parking spaces for tenants through a long-term lease.

Nationally known as a buyer and redeveloper of affordable apartments, Millennia is focusing on full-priced - commonly called market-rate - housing downtown. In September, the company bought 75 Public Square, a historic but outdated office building, for a potential mixed-use redevelopment.

And, with an eye on moving its headquarters and 200 or so jobs from the suburbs to downtown, Millennia continues to evaluate other potential acquisitions. "We are actively looking," Bolzan said in an email Saturday, "but we do not have anything in play at this time."