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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
AUGUST 15 - 21, 2011
NYC group wins bid for KeyBank Center Ratner: Group diversifies And it may brings 200 more jobs to office site By STAN BULLARD sbullard@crain.com
The embattled, 23-story KeyBank Center in downtown Cleveland not only is about to get a new owner, but it also stands to gain a new tenant that could bring more than 200 jobs from the suburbs. AmTrust Realty of New York City was the winning bidder in a July 27 Internet auction for the lenderowned tower at 800 Superior Ave. If the purchase closes — and if an incentive deal is struck with the city of Cleveland — it will clear the way for more than 200 workers to come to the building from a unit in Seven Hills of sister company AmTrust Financial Services Inc., according to three sources familiar with the situation. Two of the sources said relocating AmTrust Financial jobs to Cleveland from outside the region also could be in the mix. None of the sources agreed to be identified because they are not authorized to discuss the unfolding situation publicly. AmTrust Financial — a small business insurer, workers’ compensation
coverage provider and warranty services concern — is not related to AmTrust Bank, the former owner of Ohio Savings Bank that now is part of New York Community Bank. Nathan Aber, president of AmTrust Realty, did not return multiple calls about the proposed purchase, nor did company officials in Seven Hills. Mr. Aber, a former executive at the famed but extinct Olympia & York realty firm in New York, launched AmTrust Realty in 1998 by buying 59 Maiden Lane, a 41-story building in Manhattan, according to Crain’s New York Business. AmTrust Realty in 2004 waded into the Chicago market and bought a 28-story skyscraper at 33 W. Monroe St., the former headquarters of the defunct Arthur Andersen consulting firm, according to Crain’s Chicago Business.
Big vacancies? No problem In situations similar to KeyBank Center, which soon will have a 60% vacancy rate, AmTrust Realty in the New York and Chicago deals was undaunted by buying buildings that were half empty. It bought 59 Maiden Lane at an auction. Today, 59 Maiden Lane is the
address of AmTrust Financial’s headquarters in New York, and it has offices at 33 W. Monroe in Chicago. Relocating AmTrust Financial’s operations in Seven Hills from a 60,000-square-foot building at 5800 Lombardo Center that is owned by an affiliate led by Michael Karfunkel — whose family is the equity behind AmTrust Realty — would give AmTrust Realty a base to rebuild the tenancy at KeyBank Center. Especially suiting such a move is that KeyBank Center includes a huge parking garage. AmTrust was the taker in an online auction by www.auction.com in which the structure sold for $7 million, following bidding that opened at $3.5 million. Even the larger figure is a huge vulture play for a property that last sold for $45 million in 2007. LNR Partners, a firm in Miami Beach specializing in buying distressed properties or managing them for lenders, had ordered the auction. LNR’s website last Thursday, Aug. 11, showed the office building at 800 Superior as “under contract.” LNR’s broker here, Michael Guggenheim of Guggenheim Realtors in Beachwood, declined to discuss the winning bidder’s identity. ■
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from strict real estate focus continued from PAGE 3
has changed dramatically (after the recession and foreclosure crisis). We need a demolition policy now, so we need to use all the tools beyond real estate we can to help the neighborhoods advance.” Though he grew up here and lives in Beachwood, Mr. Ratner said he is not related to the Ratner family with huge stakes at Forest City. Keeping the nonprofit’s real estate capabilities intact while expanding the scope of Neighborhood Progress is what Mr. Ratner said he now is investigating. He said his “musings” so far have been about engaging Neighborhood Progress in education with public and charter schools because successful neighborhoods tend to have at least one good school. Mr. Ratner said his group might assist schools with the property side of their operations or form affiliations with charter schools. He said he also hopes Neighborhood Progress can participate in assisting development associated with immigrant communities and economic development associated with the arts. “It’s not for every neighborhood, but where appropriate, we think it can help a neighborhood succeed,” Mr. Ratner said. “It’s not a one-sizefits-all type of thing.” Mr. Ratner became the top staff manager at Neighborhood Progress Jan. 3, succeeding Eric Hoddersen, who ran the organization for most of its history since its 1989 founding. Mr. Ratner joined the nonprofit after serving as president of the Raymond John Wean Foundation in Warren, which plays a role not unlike that of the Cleveland Foundation in Cleveland. Mr. Ratner joined Wean from a job at the Cleveland Foundation, where he managed its Neighborhood Connections program that awards small $5,000 grants to neighborhood programs. While Mr. Ratner now heads an organization that receives substantial money from the Cleveland and George Gund foundations, David Abbott, Gund’s executive director, said he hated to see Mr. Ratner leave his Warren job for Neighborhood Progress. Mr. Ratner brought Wean and the Mahoning Valley into the Fund for Our Economic Future, a foundation-led effort to foster economic change throughout the
region. Mr. Ratner “is a very aggressive guy, a smart guy. He tells you what he thinks,” Mr. Abbott said. He noted that Mr. Ratner had pushed the idea of regional government collaboration so effectively that three of the Fund for Our Economic Future’s grants to foster studies of government collaboration went to Mahoning Valley recipients.
Priming the pump Since its founding, Neighborhood Progress has pumped more than $20 million into local development projects. Through its Village Capital program, it assists neighborhood real estate projects with funds. And through its New Village Corp., the nonprofit helps community development corporations and private developers with projects too large or risky for them to undertake alone. Neighborhood Progress has played a role in more than $800 million in projects, such as the decade-old renovation of the 200,000-squarefoot Lee-Harvard Shopping Center with Forest City Enterprises Inc. It also is a co-developer with Pennrose, a Philadelphia real estate concern, in the creation of 72 apartments for the elderly in a $20 million project that recently got under way at the long-empty St. Alexis Hospital complex on Shaker Boulevard. Philip Star, an executive in residence at Cleveland State University who headed the now-defunct Neighborhood Development Center think tank, said Cleveland community development corporations tended to be more successful at large-volume housing development programs than others in the nation, but that time is past. “These are tough times for real estate development initiatives. With NPI’s efforts in reimagining Cleveland to find new uses such as gardens and green space for vacant land, it is already showing they are moving away from a real estate development model,” Mr. Star said. “They are moving to a community building model.” Community building focuses on emphasizing a neighborhood’s assets to its advantage. Asked how he would define victory in his new job, Mr. Ratner answers: “Helping get the system moving toward being responsive to the new realities of the neighborhoods.” ■
Submit information to be part of Crain’s Health Care Directory Crain’s Cleveland Business on Sept. 19 will publish its 14th Health Care Directory, a listing of companies and organizations that provide health care services in Northeast Ohio. Go to www.crainscleveland.com/ section/hcd to view the directory. If your company or organization never has submitted information for the directory, send an email requesting a survey to Deb Hillyer, dhillyer@crain.com. The email must include company name, address, phone number and a contact name. Incomplete requests will not receive a response. The deadline to submit a survey is Aug. 24. Surveys already have been emailed to companies that were
listed in the 2010 directory. The directory will be divided into 18 categories: addiction services; associations and professional groups; dentists and dental groups; fitness and wellness; health insurance underwriters (only those companies listed as Health Insuring Corporations by the state of Ohio); home health; hospice; hospitals and hospital systems; laboratories; medical equipment and imaging; mental health; occupational health/occupational therapy; outpatient services; physical therapy/rehabilitation; physicians and physician groups; prescription services; senior and long-term care services; and women’s health services.