CLEVELAND, Ohio -- A local development team expects to break ground in the fall for the first phase of Intesa, a medley of apartments, retail, parking and offices in Cleveland's University Circle neighborhood.

Announced with fanfare in March 2012, Intesa quickly went quiet, prompting speculation that the ambitious project might not happen. But the Coral Co. and Panzica Construction Co., the developers, say they never stopped working. They've spent the last year renegotiating deal terms with University Circle Inc., the nonprofit group that owns most of the 2.2-acre site, and redesigning the buildings.

The reconfigured project has all the same elements - places to live, work, park, shop and sit outside. But construction will start with apartments and parking, two uses with abundant demand and surer financing. Offices, a less-proven type of development in that neighborhood, are now a second phase.

The Intesa site, off Mayfield Road north of Circle Drive, is among a few pivotal plots left in landlocked University Circle. Two years ago, University Circle Inc. picked Coral and Panzica to develop the land, with a project that originally hinged on landing office tenants and constructing everything in a single go.

Real estate brokers say the site generated plenty of inquiries. But office users were reluctant to commit to an on-paper project with significant infrastructure hurdles, an unclear timeline and lots of moving parts. Now Coral and Panzica hope to give them more confidence, by starting work on roughly 200 apartments, a 700-space parking garage and the streets and public spaces surrounding them.

"What we found during the initial office prospecting process is that users are interested in University Circle as a market," said Peter Rubin, president and chief executive officer at Coral, a Cleveland real estate company. "They were prepared to take the location risk. They were prepared to take the market risk. What they were not prepared to take was the commitment risk."

New designs from Bialosky + Partners Architects show a project that has been rotated on the site, to put apartments instead of offices at Mayfield and Circle. The offices, shifted east, aren't intertwined with other uses. The parking garage would sit to the north, making it more accessible from Euclid Avenue than in the original plans.

In a single residential tower, the developers expect to layer three types of units - traditional apartments; more affordable, pint-size rentals called micro-suites; and 13 two-story, townhouse-style penthouses. The apartments would range from slightly less than 300 square feet to 1,900 square feet, with early rental estimates of $600 to $3,000 a month.

Market studies for University Circle show a district hungry for new housing, with an emphasis on apartments for medical residents, graduate students, researchers and academics. Projects including Intesa and One University Circle, a proposed high-rise rental tower, also are targeting suburban homeowners who want to downsize and live closer to museums, public transportation and nightlife.

"If there's a handful of locations in Northeast Ohio, University Circle is definitely at the top of the list" for apartment construction, said Michael Barron, vice president of investments with Marcus & Millichap Real Estate Investment Services in Independence. "It has all the drivers that developers are looking for. It has got employment growth, population growth, the medical industry and education. I don't think you can go wrong in that location."

Apartments could open in 2016

University Circle Inc. recently firmed up its loose agreement with Coral and Panzica. Now the developers are paying for a formal option to lease the Intesa site, which the nonprofit sees as a long-term source of income.

"We're learning more about our own market," said Chris Ronayne, the nonprofit's president. "We see that our land has value. ... Some early projects in University Circle were somewhat speculative. Now that they're fully leased up, we're more confident."

Rubin and Tony Panzica, the president and chief executive of Panzica Construction in Mayfield Village, won't delve into the details of their Intesa financing plan. They have loans and investor cash lined up, and the lingering gaps largely relate to infrastructure money - for roads and other site work. The developers are talking to the city, Cuyahoga County and the state about how to fill those gaps.

"Some of the pieces we have committed, and some we're still nursing toward a commitment level," Rubin said. "We're racing toward a groundbreaking because we're confident we can bring them into place. ... In the mind of team Coral and Panzica, there are no hurdles that will stop us from building it."

Cleveland's economic-development director was not available to discuss Intesa. Nathan Kelley, who oversees economic development for the county, said it's too early to talk about the project. "We're still at an exploratory phase," he wrote in an email.

To make way for construction, the developers would need the city to close part of East 117th Street, where it runs through the site. The project also calls for extending Circle Drive north, to provide access to the new parking garage and relieve congestion in a heavily trafficked area.

On a development that, all in, could be a $100 million to $110 million investment, public sources might account for 5 percent to 10 percent of the costs, Panzica said.

Office market waits for first big deal

Long-running negotiations gave the developers to chance to come up with what they believe is a better layout.

Now new residences, instead of offices, will face Abington Arms, a nearby apartment complex for elderly renters. Design changes will make it easier for pedestrians to cut through the site. And the office building will tie into the parking garage and sit closer to the Greater Regional Transit Authority's new train station on Mayfield Road, where construction is under way.

Panzica and Coral hope to open their apartments in spring or summer of 2016. The parking garage and some street-level retail would debut at the same time. The schedule for the 11-story office building is more nebulous, since it depends on getting tenants to commit.

"I think it's a good idea if they can get a shovel in the ground," said David Browning of the CBRE Group Inc. real estate brokerage, which marketed office space at Intesa in 2012 and 2013. "Real estate is a business of momentum."

As the office design changed, the market also improved. Several other long-discussed projects, including Uptown and the RTA station, are partially finished or finally moving. And in downtown Cleveland, the Ernst & Young Tower at the Flats East Bank project opened last year. That tower filled up fast, demonstrating that some tenants are willing to pay top dollar for new, more efficient space in a city where office construction has been scarce.

Nanci Ferrante of Cushman & Wakefield/Cresco Real Estate said University Circle holds untapped potential as an office market. She's part of a team that recently picked up marketing and leasing responsibilities for the Intesa offices. "There are a lot of different tenants in the market right now that are looking for a new opportunity," said Ferrante, who is working with Alex Russo and Rico Pietro.

Intesa isn't the only office concept brewing in the broader University Circle area. Over at East 105th Street and Cedar Avenue, the Cleveland Clinic and Trammell Crow Co., a national developer, have been marketing land on the Clinic's main campus as a potential office site. Fliers show an 80,000-square-foot, suburban-style building, near the northern end of the planned Opportunity Corridor road project.

The Clinic won't say much about the building, and a Trammell Crow executive didn't respond to a request for comment.

Rubin, who pointed out that the two sites and buildings are very different, said he isn't worried about the possibility of competition.

"I'm glad to see someone else sticking their toe in the office market," he said. "I'd be happy if two more people said they were building offices."