Money Flow: RiverCore Capital Structures $75.5 Million Tax-Exempt Bond Financing for New Cuyahoga County Headquarters Building
- Arranged $10 million “bridge loan” from Piper Jaffray to help acquire Ameritrust Complex
- Facilitates county savings of $9.1 million annually
- Vogel: “First of several high-impact deals” for RiverCore Capital
CLEVELAND, Ohio, May 2, 2013 –RiverCore Capital LLC, the leading Cleveland-based investment banking firm focused on complex real-estate financing, structured the $75.5 million tax-exempt bond-financing deal for the new Cuyahoga County Headquarters Building.
“We are very excited to help transform East 9th Street – a vital corridor in our city,” says Mark Vogel, founder/managing partner, RiverCore Capital. “This development marks the first of several high-impact deals for RiverCore Capital in downtown Cleveland. The county is set to lease 222,000 square feet annually at a cost of $6.7 million—or about $30 a square foot—over 26 years. About 750 county employees from eight buildings will move into the new headquarters building in July 2014.
“Freeing up eight county offices will save more than $9.1 million a year,” according to Vogel.
The transaction, completed through the Cleveland-Cuyahoga County Port Authority, which issued tax-exempt bonds for construction of the building, closed earlier this month. The county headquarters will replace the old P and H office buildings at East 9th and Prospect Avenue. Developer Greg Geis will construct and manage the headquarters, which the county will lease.
As part of the bond deal, the Port Authority took ownership of the P and H property and acted as a conduit by issuing tax-exempt lease revenue bonds that will be paid off using rent from the county. Investment bank Piper Jaffray & Co. was the underwriter for the bond transaction. Vogel also arranged a bridge loan from Piper Jaffray—which provided a $10 million short-term loan to the Geis entity funding the site’s acquisition—until the bond transaction settled.
The bond financing only applies to the county headquarters, located on 0.72 acres of a larger site involving the Ameritrust Tower and two parking structures.
Geis acquired the Ameritrust complex from Cuyahoga County in February 2013 for $27 million. The developer hopes to turn the complex, which includes the historic rotunda as well as the Ameritrust Tower designed by Marcel Breuer, into luxury apartments, a hotel and offices. The Port issuance is not involved in the broader project.
A second-generation family business, Geis is best known for suburban industrial projects. Since 2010, though, the Geis brothers have created a technology park in Cleveland’s Midtown neighborhood, invested in a troubled downtown condo tower and proposed building offices on 20 acres of city-owned land near the downtown lakefront.
According to Piper Jaffray executive Ryan Stefan, the bonds received a rating of “Aa2” from Moody’s and an “AA” rating from Standard & Poor’s.
About RiverCore Capital LLC
Founded in November 2012 by 15-year investment banking veteran Mark Vogel, RiverCore Capital specializes in structuring complex financings, such as mortgage/mezzanine debt financings, within the institutional real estate community. The firm has significant relationships with various property and mortgage REITs, equity capital organizations, pension funds, private equity hedge funds, advisory firms, CMBS lenders, master servicers, life insurance companies and commercial banks. Vogel’s lending relationships have resulted in various investments and financings for lifestyle centers, retail shopping centers and regional malls, office, multi-family, industrial, hotel and self-storage properties while facilitating acquisitions, joint ventures, reorganizations, asset optimizations, workouts, sale leasebacks and loan restructurings.