It may be traced back to the drawing board of the former University Club and Martin Center in Fair Hill near the University of Akron campus.
Gateway president Tom Chema said efforts by Cleveland’s Gateway Group and Paran Management, which have partnered to lease the former club and turn it into an upscale boutique hotel called Martin House, have been overwhelmed by the pandemic.
“We no longer have that lease. We were unable to work in the time frame we agreed upon,” said Cheema, noting that the university now had the properties for sale.
Chema and Paran appear well positioned to pull the project off at the end of 2019. Chema is the man who helped turn Gateway Sports Complex’s Cleveland dreams of new venues for professional baseball and basketball into a reality in the 1990s. Baran has a proven track record developing and managing real estate projects, including the Cleveland Glidden House hotel on the university circuit — a property that the partners and the university hoped Martin House could replicate in Akron.
Chema and Paran said they were nearing completion of project funding together in December 2019. At the time, though, Chema, who had always been cautious, issued what turned out to be a sadly prophetic statement.
“We’re on the move,” Chema said in December. “I hate to say this, because I don’t have firewood to knock in this car, but we’re on schedule.”
COVID-19 hit in early 2020 and by March it was declared a pandemic, putting the US into its version of lockdown. It wasn’t anything like a lockdown in China, but it sent people home to work and effectively shut down the tourism and hospitality industries.
That also eliminated Martin House’s funding — at least for now, Chima said.
Nobody gives up easily, Chima said he and Baran still hope to turn the property into a hotel, but as owners rather than renting it from the university.
Purchase is out of the question. The property is offered for sale by Cushman & Wakefield | Cresco Real Estate. The building has an area of 35,000 square feet, and the asking price is $1.3 million.
Representatives for Cushman & Wakefield did not respond to requests for comment. University representatives declined to discuss the property because they said the school was doing due diligence on the matter, though they did not say with whom.
Two real estate professionals not directly involved in the deal said Cleveland-based Liberty Development was negotiating to buy the property, but executives there also did not respond to requests to confirm the company’s interest or intentions.
Chema said he and Paran have submitted a proposal to purchase the property, on terms he declined to disclose, and is awaiting a response from the university.
Regardless of who buys it, Chema said the deal should be done soon, because the building is in poor condition and already has a major leak on its roof.
“It should happen before winter comes,” Chima said. “Someone needs to come in and do some repairs on the roof and prevent water from seeping into the building.”
If Gateway and Paran are successful, Chema said he believes they can still turn the property into a first-class hotel serving the university and its guests. They hope to revive their plans to transform the property, which includes adding approximately 25,000 square feet of space and amenities such as a restaurant, café, and banquet/meeting rooms.
“We haven’t given up on that idea,” Chima said. “We still really want to do it.” “I cannot imagine a use that would be more beneficial to the University than a third party outside the University might make.”
Chema said he also believes the tide is turning in favor of hospitality developments as the pandemic subsides, and that financing the purchase of the property will be fairly easy because Gateway and Paran can use the property as collateral.
“We’ve talked with regular commercial lenders about it,” said Cheema. “We needed a lot of money to do the (conversion) project, and that was difficult. But getting financing to buy the building shouldn’t be a problem.”
Chema said the hotel project will have to return to Ohio to try to renew previously granted and expired tax credits, although the federal tax credits remain in place.