Case Study

CASE STUDY: Toledo Revitalization Gathers Steam

8 min read

Historic project reinvigorates city  

The revitalization of Downtown Toledo was one of the big aims of ProMedica’s $60 million revamp of an old steam plant there, a project which received both State and Federal Historic Tax Credits. It seems to be working, as apartments in the district now have become the hottest ticket in the city.

The Historic Tax Credits and State and Federal New Markets Tax Credits have helped turn an old steam plant shuttered for 30 years into a headquarters and office building for hundreds of ProMedica employees. The project, also, has included an additional office building and a parking garage/parkland refurbishing at the site on the banks of Ohio’s Maumee River.

The three-and-a-half year planning, designing and construction process has been “an exciting time” for healthcare provider ProMedica, according to Senior Vice President for real estate and construction Robin Whitney, who calls the result “a fantastic space,” a mix of historic and new. Groundbreaking was held in October 2015, while a ribbon-cutting ceremony to celebrate the opening of the headquarters took place on August 31 of this year.

Employees began moving in in August.

ProMedica Chief Executive Randy Oostra pointed to both the consolidation of offices into one company headquarters and boosting downtown development as project keys at the groundbreaking “Our move to downtown will help ProMedica be more connected, more efficient and more effective as an organization,” he said. “At the same time we hope it will serve as a catalyst in the ongoing revitalization of downtown Toledo.”

“You can tell this was a steam plant,” Whitney says of the renovated structure. A huge (13 ton) crane beam has been retained from the original structure and is suspended above the four-story atrium. And, with its original east wall demolished and an addition attached, it’s also a modern office space. “It has an industrial steam plant look but state-of-the-art offices inside,” according to Whitney, with the addition featuring lots of glass and terra cotta.

The office floorplan is designed for interactivity, with glass fronts for the 9×11 offices and no partitions for the 6×9 workspaces. Unusually, the offices are not built on the river side of the building, allowing all workers access to the outside views.

The most distinctive features of the former Toledo Edison Steam Plant (constructed to architect Daniel Burnham’s specifications in 1896 and providing first power for trolley cars and then steam until 1985), its two giant smokestacks, remain. But there’s an asterisk.

“We had hoped to save them, but they were not structurally sound,” says Whitney. “We had to replace them.”

The renovated building also features giant 20-feet tall arched windows painted with the same colors the original Steam Plant windows had. The original windows were done in the Romanesque Revival style by architect Burnham, who also designed the famous Flatiron Building in New York City and was the chief architect of the 1893 Chicago World’s Fair. Original steel beams and new wooden roof panels are visible from the atrium.

Historical detail
The nearly 120,000 square foot Steam Plant, which is on Toledo’s Water Street (and was first known as the Water Street Station) has a “history walk” in a corridor on its river side, along with Toledo artifacts, such as vintage meters, signs and photos, according to a ProMedica fact sheet. In a striking historical detail, the west employee entrance has high water markings from the Toledo floods of 1904 and 1918.

Another feature of the Steam Plant is artwork by Danielle Roney in its atrium. Called “Trace,” it consists of 5,300 translucent glass spheres with a blue/grey color scheme suggesting the sky and referring to Toledo’s nickname of “The Glass City.”

ProMedica acted as its own developer for the rehab and new construction, which provides space for 850 employees, 750 of whom are now in place. Add in another 150 ProMedica people already working downtown, and that will be 1,000 workers in the area, Whitney says.

Why Toledo? It is the biggest city in the healthcare provider’s footprint, which includes 24 counties in Northwest Ohio and three in Southeast Michigan. It is also a city that already had a sizeable ProMedica presence. Over the past 15 years, ProMedica grew quickly to the point where it had employees scattered over 22 locations. These are now being centralized at the Steam Plant campus.

Recouping costs
ProMedica committed a lot of its own money to the Steam Plant campus, with its finance and treasury units working with investor U.S. Bank, syndicator Stonehenge Capital, and the Toledo-Lucas County Port Authority, among others, on obtaining the tax credits. With the company able to sell one building and to end a lot of leases, Whitney says the operation will eventually recoup its substantial cost.

The project engaged both Stonehenge’s Community Development unit and its Tax Credit Services business to work together. Stonehenge’s TCS unit assisted with the sourcing and closing of the State and Federal Historic Tax Credits.

The Steam Plant project adds considerably to the viability of Toledo’s downtown district, which saw a lot of Rust Belt defections of industry until recent years, when new development included a ballpark for the Triple A world-famous Toledo Mud Hens baseball team, and an ice arena for the Walleyes hockey team.

Ironically, ProMedica employees wanting to work and live in the same neighborhood may have trouble doing so because downtown has become a hot housing market for Millennials and others, tipping the supply-demand equation in favor of demand, says Whitney.

The big two-year construction effort provided 350 fulltime jobs and many others as well. Whitney notes that more than 1,000 people took the mandatory safety training that would allow them to work on the site. Local firm Rudolph Libbe Inc. handled construction on all three buildings in the project.

Community enhancements
The Historic Credit funding went only for the renovation of the Steam Plant, but there are two other buildings that were constructed in the same headquarters project, a garage/park restoration and an additional office building.

Additional downtown economic activity is being realized from a bagel shop and a restaurant slated to open soon in the third building in the project, called the Junction. “The YMCA (of Greater Toledo) is leasing the lower level space and the Chop House is occupying the first-floor retail space,” Whitney says, along with a Barry Bagels Express location. The garage has 5,500 square feet of retail space that can accommodate two businesses.

The five-story Junction Building is a renovation of a former KeyBank building which dates to 1981. It is triangular in shape and was designed to appear to be floating in space.

The workspaces there all have sit-stand desks, storage areas and computers with dual monitors. Other amenities for employees include wellness and lactation rooms and fully-equipped pantries.

The garage is set into the park, which has a 500-foot-long frontage along the river, with a tower but also a significant part of it built underground, beneath a carpet of grass. On the north side of the garage is an LED light display called “Tower of Light” by artist Erwin Redl where the lights can turn different colors.

The refurbished park, called Promenade Park and open to the public, is a big part of ProMedica’s outreach to the Toledo community. Concerts have already been held there, and materials from the old Steam Plant have been repurposed for it. There is a fire pit fashioned from the original steel, which can warm users during Ohio winters, and elaborate artwork by Diane Turpening and Kristine Rumman, also made from the original steel of the smokestacks.

The park dates to 1972 and the advocacy of local resident Betty Mauk. Mrs. Mauk wanted a riverfront with greenspace and cultural events open to the community, similar to riverfront parks in France. She imported a French kiosk, called a Colonne Moriss, which has become an icon of the park, and the refurbished kiosk is set to remain an icon there.

Other features include new landscaping and seating areas (“not a bad seat anywhere,” according to Whitney), an illuminated fountain, an LED television screen, a reading garden and a memorial to a heroic Toledo fireman.

The artwork in Promenade Park is called “Echo,” to echo the industrial past in the immediate present, and consists of 14-foot diameter rings positioned down a hill in the park to form a walking path. The rings are painted black for coal, blue for water and white to symbolize steam.

And here’s an apt thing. Whitney says if you stand inside the ring while a concert is being played, you can hear the music echo.

Story Contacts:
Robin Whitney
Senior Vice President, real estate and construction, ProMedica

Serena Smith
Manager, marketing communications, ProMedica

$14.3 million in equity for the Federal and State New Market Tax Credits and the Federal and State Historic Tax Credits from U.S. Bancorp Community Development Corp. (USBCDC).

$8 million Federal NMTC allocation from Finance Fund, a group that connects local for-profit business owners and nonprofit organizations with public and private funding to help spark community development and create jobs in distressed communities in Ohio. Finance Fund partnered with Northwest Ohio Improvement Fund, LLC, an affiliate of the Toledo Port Authority.

$5 million Federal NMTC allocation from Stonehenge Capital Co.

$2.6 million State NMTC allocation from Stonehenge Capital Co.

$2 million Federal NMTC allocation from USBCD.

$4 million loan from JobsOhio, a nonprofit that promotes job creation and economic development for Ohio.

$2 million revitalization grant from JobsOhio.

Balance self-funded by ProMedica.

(sources: Novogradac and Co., Finance Fund, and ProMedica)

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.