Link59 rendering September 2016

A rendering shows the planned Link59 office building on Euclid Avenue, just east of East 59th Street. Construction will start soon, and the building could be finished in summer of 2017.

(Hemingway Development; Geis Cos.)

CLEVELAND, Ohio - With a use-it-or-lose-it federal grant deadline looming, construction will start within weeks at a new business park in Cleveland's Midtown neighborhood.

Hemingway Development expects to close on a $1.15 million land deal with the city of Cleveland this week, putting the company in control of 6.5 acres of vacant property between Euclid and Chester avenues east of East 59th Street. During summer of 2017, developers Fred Geis and Jim Doyle plan to open their first new building, a 62,000-square-foot, three-story structure - one that's completely speculative, at this point, without any tenants lined up.

A rendering shows the former Ace Fixtures building, renovated and reimagined as modern office space. Hemingway Development has a deal to purchase the vacant building, which will become part of the company's second business-park project in Midtown.

Separately, Hemingway will buy the former Ace Fixtures building to the east and spruce up the empty space. The transactions will add roughly 90,000 square feet of new or renovated offices to the city's growing Health-Tech Corridor, where turnkey buildings are hard to find.

Jeff Epstein, executive director of MidTown Cleveland, Inc., showed a fresh image of the new building, called Link59, during the neighborhood group's annual meeting Wednesday. The offices will be the first new construction on a broader block where Hemingway could construct at least one more building and University Hospitals plans to build a primary-care health center for women and children. UH will acquire its land from the city in a separate purchase.

"With UH being next door, we assume there are going to be some medical tenants," Geis said. "And there are going to be a lot of people who want to move to Cleveland for office space and not be completely downtown."

At Hemingway's nearby MidTown Tech Park, a mix of newly constructed and renovated buildings, offices are 92 percent occupied. A few steps away, Dealer Tire is crafting a campus around the long-vacant Victory Center, where the company plans to move its Midtown headquarters and hundreds of workers.

A rendering shows the planned Link59 building in Midtown.

So there's an argument for adding more supply. But interest hasn't translated to leases yet, in the case of Link59.

"We've had a number of tenants who could take the whole building and who would have been able to use all of it, but they didn't pan out," Doyle said.

Nonetheless, he added, "we're pushing dirt next month."

Chalk up that timeline to $13 million in federal money that the city and the developer don't want to lose. Cleveland secured the funding, a $3 million grant and a $10 million loan, in 2011 for rehabilitation of the dilapidated Warner & Swasey complex on Carnegie Avenue. That project never happened.

In 2014, the city asked the U.S. Department of Housing and Urban Development for permission to move the funding commitments to the land around East 59th and to extend the deadline for starting work to 2016. Hemingway needed to buy the land and tap the federal funds before the end of this month to keep HUD from rescinding the incentive package.

That's why Doyle and Geis are charging forward. A city design-review committee and the Cleveland City Planning Commission are likely to review building renderings within the next few weeks. Hemingway started marketing the space Wednesday, charging $16 per square foot.

The former Ace Fixtures building, on East 61st Street, could be ready for new occupants before the end of the year. Doyle said the developers are talking to an unidentified tenant who might move into the 30,000-square-foot building's second floor.

"I have a confidence level that the demand will be there to fill up this space, particularly because of its location right next to UH on this dynamic campus and on the HealthLine," Epstein said, referring to the Greater Cleveland Regional Transit Authority's rapid-transit bus line along Euclid Avenue. "If we have a company today that wants to be in space in a month or two, there are very few options for them left.

A site plan shows the layout of a new business park planned along Euclid Avenue, in the middle of Cleveland's Health-Tech Corridor.

Epstein said he's particularly pleased that both UH and Hemingway are planning three-story buildings along Euclid instead of requesting zoning variances to build shorter structures. There's also the possibility that Link59 will include retail, a use that's been slow to materialize in the center of the Health-Tech Corridor. Geis said a coffee shop was the first business to inquire about the Link59 building.

"I think having dirt moving on the site is going to help people visualize what kind of campus it's going to be," Epstein said.