CLEVELAND, Ohio – A local developer plans to build on its previous work in Tremont with a mixed-use, mixed-income project in the near West Side neighborhood’s Scranton corridor.

Sustainable Community Associates, a development group made up of three Oberlin College graduates who made a name for themselves by successfully redeveloping a blighted block in their college town, will present plans for The Tappan project to Tremont’s community development corporation next week.

Plans for construction of The Tappan came about after Naomi Sabel, Josh Rosen and Ben Ezinga successfully redeveloped the former Ohio Awning & Manufacturing Co. property that sits across from the planned Tappan site at Scranton Road and Auburn Avenue.

Now, they plan to erect a four-story building that will include 95 apartments and a first-floor bakery. The bakery, as yet unnamed, will be a venture by a first-time business owner.

Across the street, Wagner Awning, which was completed using state and federal historic-perseveration tax credits, features 59 apartment units and three offices that opened in November 2016. With the Wagner Awning property, SCA acquired two parcels of vacant land across Scranton Road and later acquired an adjoining property. With community members opposed to the vacant parcels being converted into parking, the developers decided to put in what the neighbors wanted to see.

The Wagner Awning building on Scranton Road in Tremont.

Adding an interesting twist to the project is the developer’s leveraging of opportunity-zone funding to subsidize what it is calling workforce housing. SCA plans to set aside 60 percent of the residential units for people whose annual income is $46,000 or less. Monthly rent for the mix of studio or one-bedroom units will be between $1,000 and $1,200; the other 40 percent of apartments will be market rate. The developers believe there is an untapped market of people at this income level.

“I think what we’ve seen is, there’s what I’ll call a middle class that isn’t typically served by some of the newer things that have been built,” partner Rosen said. “These sorts of units, you’re more able to afford than the same apartment downtown that may be $2,000. … The idea is, you can live here at market rate, but a teacher can also afford to live here.”

Opportunity zones were created as part of the Republican tax reform in 2017. The program incentivizes investment in economically-distressed areas by allowing investors to delay or avoid paying capital gains taxes if they invest within certain Census tracts that have been designated as opportunity zones. SCA believes it will be one of the first developers in the area to take advantage of the program.

“Basically, some of our investors are able to invest into this project and take less of a return than they typically would, because they have all these tax benefits from the opportunity zone,” said Rosen. “What that means is our capital stack is less stressed for dollars, so we’re able to take some of the units and [charge less for] them, and still pay back our investors.”

Sabel, another partner, noted that including a mixed-income component into a project, especially when it’s new construction, is challenging in this market.

“Because of the cost involved, you have to gear toward higher rent. The economics force you into it,” she said. “Here, because of the opportunity zone, we were able to subsidize more of the things we wanted to accomplish programmatically.”

The Tappan will be SCA’s fifth project. Its first was the East College Street project in Oberlin, a $17 million, 100,000-square-foot development the group completed in 2010 and which earned them national attention. Next, the group redeveloped the Fairmont Creamery building on Willey Avenue in Tremont, a 100,000-square-foot building that was nearly vacant at the time. Today, the rehabilitated building is home to 30 apartments, offices and a gym. SCA also completed the Mueller Lofts apartment-conversion project in Asiatown, as well as the Wagner Awning project.

The design is being led by architecture firm Bialosky Cleveland. Developers envision The Tappan as a sort of mirror image of Wagner Awning, with some contrasting elements. Where Wagner Awning features light gray brick, The Tappan will be a darker shade of gray, with wood features to warm up its aesthetic, the partners said. The building will feature pedestrian access to a courtyard garden.

In the future, a handful of townhouses could be an extension of the project.

Designs for The Tappan project being planned in Tremont.

SCA is financing the estimated $22.5 million project through unnamed investors and an undisclosed bank that is providing debt and opportunity-zone equity. The group also anticipates asking the city of Cleveland for a financing package. The partners hope to have designs approved and financing terms finalized by April, with the goal of opening The Tappan in June 2020.

SCA sees The Tappan (a nod to Tappan Square in the center of Oberlin, which is named for abolitionists Arthur and Lewis Tappan) as a continuation of what they’ve started in Tremont, as well as an opportunity to be part of the broader redevelopment of the Scranton corridor. MetroHealth is undergoing renovation on the south end of Scranton, and numerous other projects are being discussed closer to downtown.

“When you have someone like Metro making the type of investment that they are, I think that if folks like us and projects like ours can complement that, then you can build toward that critical mass,” Sabel said.