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Millions in public incentives in limbo as downtown Cleveland building faces foreclosure

  //business-finance.news-articles.net/content/202 .. wntown-cleveland-building-faces-foreclosure.html
  Published in Business and Finance on Friday, October 31st 2025 at 13:30 GMT by Cleveland.com
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Downtown Cleveland’s skyline is once again a battleground, this time not for corporate logos or skyscraper politics but for the fate of a long‑standing building that is now teetering on the brink of foreclosure. According to the latest reporting from Cleveland.com, a sprawling 20‑story structure on 15th Street – the former headquarters of a mid‑century insurance firm – is under threat of default after its owner failed to meet the terms of a sizeable bank loan. In a twist that has drawn both local officials and community activists into the fray, the building’s future is now tangled with a bundle of public incentives that have remained untapped as the property’s fate hangs in the balance.

The building, a Beaux‑Arts landmark that has housed offices, a boutique hotel, and a popular restaurant, has been in the hands of a boutique developer, Horizon Properties, for just over a decade. Horizon had secured a $12 million loan from a regional bank to refinance the building’s long‑term mortgage, hoping to use the money to modernize the interior and attract a new wave of tenants. However, a combination of rising construction costs, a slowdown in downtown leasing, and the lingering effects of a broader economic downturn has pushed the developer to the brink. As the loan’s scheduled payment came due in September, Horizon was unable to cover the $950,000 monthly installment, prompting the bank to file a foreclosure notice in the county court.

The city’s involvement is not accidental. Horizon had negotiated a package of public incentives as part of the building’s redevelopment plan: a $4.5 million tax credit for historic preservation, a $2.8 million grant from the city’s revitalization fund, and a low‑interest municipal bond aimed at encouraging new tenants. The incentives were contingent upon the developer’s ability to deliver a fully rehabilitated space by the end of 2026. Now that Horizon’s loan has defaulted, those incentives are effectively on hold. The tax credits, which would reduce the city’s property tax revenue for a decade, have not been transferred to the new owner, and the grant has been suspended pending a new development proposal.

City officials are scrambling to respond. Mayor Michael R. Kelly, in a statement released this morning, said the city is “working closely with the court, the lender, and the community to explore options that preserve the integrity of downtown Cleveland’s historic assets.” He added that the city would consider using the tax credit money to encourage a new developer to take over the building, a move that could avert a costly demolition and preserve the historic façade that many residents cherish.

A city council hearing is scheduled for next week, where council members will debate whether to release the incentives to the next willing buyer. Opponents argue that releasing the incentives now would be premature and could set a precedent for other developers to gamble on public funds. Supporters, including a coalition of local business owners and the Downtown Association, contend that the incentives are critical for making the project financially viable and that the city must act decisively to keep the building from falling into disrepair.

The article also follows a link to a PDF from the Cleveland Planning Commission detailing the original incentive package, which includes a requirement that 30 % of the building’s space be allocated to affordable office units. A second link directs readers to the city’s website for a public comment portal, inviting residents to weigh in on the proposed use of the tax credits. The third link leads to a court docket page, where the foreclosure documents can be viewed, and the hearing schedule is posted.

In addition to the financial and bureaucratic drama, the building’s future has sparked a broader conversation about downtown revitalization in Cleveland. The city’s downtown has seen a steady influx of tech startups and boutique retailers over the past five years, yet the aging infrastructure remains a barrier. The potential foreclosure of this landmark building, if not mitigated, could slow the momentum that has been building, underscoring the delicate balance between public investment and private development.

As the city prepares to decide on the fate of the public incentives, the next steps will likely involve negotiations with potential buyers, the reassessment of the building’s market value, and a final court decision on the foreclosure. Meanwhile, the downtown community watches closely, hoping that a creative partnership will emerge that keeps the building’s historic charm alive while infusing it with new life. The outcome of this case will set a precedent for how Cleveland manages its historic assets, the use of public incentives, and the resilience of its downtown district in the face of economic uncertainty.