CLEVELAND, Ohio - The city's first new high-rise apartment tower in more than 40 years will start inching skyward this summer, with money in place and site preparations under way.

First Interstate Properties, Ltd., and Petros Development Corp., a team of local developers, closed on financing May 27 for One University Circle, a $116 million project scheduled to open in spring 2018. Workers quickly demolished the former Children's Museum of Cleveland buildings on the high-profile site, at Euclid Avenue, Stokes Boulevard and Stearns Road.

Vertical construction should be visible in August, said Mitchell Schneider, president of Lyndhurst-based First Interstate.

Fueled by seemingly ceaseless demand from renters, developers and major property owners in Cleveland have unveiled plans for all sorts of newly built projects. But few of them actually have put shovels in the ground.

In downtown Cleveland, where a wave of office-to-housing conversions is reshaping the center city, the K&D Group, Inc., and the Geis Cos. have transformed empty office towers into apartments, taking advantage of preservation tax credits and other financing tools that make the numbers work.

But when it comes to building a high-rise from scratch, Schneider and homebuilder Sam Petros are first off the starting block.

The question, now, is whether - and when - other developers will give chase, pushing ahead with glitzy proposals such as the mixed-use nuCLEus complex in downtown's Gateway District, apartments atop the 515 Euclid Ave. parking garage and possible towers on parking lots in the Warehouse District and Playhouse Square.

"I think there's plenty of room for others," Petros said during a phone conversation before a Thursday afternoon ceremonial groundbreaking for One University Circle. "I think there's a growing market that's going to continue."

But, he conceded, going from concept to construction is no small feat.

"It ain't easy," Petros said of securing financing and pushing forward. "It takes a lot."

One University Circle will house 280 apartments, from a 540-square-foot studio to a 2,700-square-foot penthouse. Schneider won't disclose rental rates yet.

"The rents are going to be what the market will bear," he said, "and we anticipate being around the top of the market, because we believe that the building will be unmatched in terms of quality and lifestyle experience in the Cleveland, Ohio, marketplace."

The 20-story building will include a parking garage, concierge services, a fitness center, an outdoor swimming pool and a sky lounge offering bird's-eye views of the city. It will occupy a 1.3-acre site owned by neighborhood nonprofit University Circle, Inc., which entered a long-term land-lease agreement with Petros and Schneider.

First National Bank led a lender group, which includes Fifth Third Bank and union-owned insurer Ullico, that provided first-mortgage financing for the project. The ERECT Funds, which invest on behalf of union pension funds, supplied the second mortgage. The developers contributed $19.5 million worth of equity and secured another $10 million from wealthy foreigners, through a federal program that offers U.S. residency to people who invest in job-creating projects here.

The Cleveland-Cuyahoga County Port Authority acted as a conduit in a bond deal with the bank group, enabling the developers to avoid sales-tax payments on construction materials.

The city approved 15 years of property-tax abatement on the apartment building, followed by a 15-year arrangement that will reallocate part of the new property-tax revenues from the project to paying off debt. Cleveland routinely provides abatement for residential projects and requires, in exchange, that homeowners and developers meet green-building standards.

"The development at One University Circle provides another example of the renaissance taking place across Cleveland," Mayor Frank Jackson said in a written statement. "Developers like Mr. Schneider and Mr. Petros are investing in the vision that enhances Cleveland as a place to live, work, play and do business."

First Interstate is the developer behind Cleveland's Steelyard Commons shopping center and Legacy Village in Lyndhurst, where a new parking garage recently opened and construction is almost done at a 135-room Hyatt Place hotel. Petros has built more than $600 million worth of homes in Northeast Ohio, but this will be his first blockbuster project in the city.

"This is a dream, to build a building like this in Cleveland for me," he said. "For 35 years, I've been building homes in this market, and I've always wanted to build an iconic high-rise here. ... This is the only site I would have considered."