Last week, we reported that Studio West 117, an ambitious mixed-use project catering to the LGBTQ+ community, had defaulted on more than $9 million in loans.
A review of properties tied to the project, which sits on the border of Lakewood and Cleveland, shows it is also past due on $222,000 in property taxes. The biggest bill – $163,449 – is tied to the Cleveland retail and apartment building on Detroit Road that includes My Friends Restaurant.
Co-developer Daniel Budish said the project has secured a new loan with a lower interest rate on the Cleveland building. He said that will allow the project to pay the tax bills on both the Cleveland and Lakewood properties. He said he expects the new financing deal to wrap up in the coming days. He noted that he has long disputed the tax valuation on the Cleveland property and had made initial payments as he challenged the assessment. (Cuyahoga County rules require property owners to pay at least a portion of a tax bill while they are contesting it.)
The other past-due tax bills are tied to Lakewood’s Fieldhouse, which includes a gymnasium and dining space, and the Phantasy Theater. The combined past-due tax bill on the buildings is nearly $53,000. The owners owe $10,000 on the related parking lots.
Budish offered more detail this week about the initial financing on the overall project – and on the project’s future.
He said rising interest rates resulted in ballooning payments. He said the project was originally paying the lender, Truist Bank, $33,000 a month in interest and that ballooned to around $80,000 a month. He said that became unsustainable only after economic factors tied to the pandemic, including rising construction costs, took hold.
He said the project’s recent “forbearance agreement” with Truist Bank allows the project some time to restructure the project and begin repaying the loans. He said he is also working on converting the project to a nonprofit. He said he’d like to see the project become an entity with a structure similar to that of Edwins Leadership & Restaurant Institute, a nonprofit whose social mission drives its business model.
