A "restoration celebration" kickoff was held at the Goetz Tower in downtown Middletown Wednesday, July 10. The event was presented by Historic Developers and Moving Middletown Forward at the building located at 1000 Central Ave. which is undergoing a $3.5 million restoration and redevelopment. The Goetz Tower renovation project is getting back on track after setbacks. The seven-story office building is being redeveloped into 16-market-rate apartments ranging from 800 to 1,100 square-feet. The Art Deco building was constructed in 1930. In addition, about 2,000 square-feet of office space on the first floor and second floor mezzanine will be utilized by the Middletown Economic Development Department and the Small Business Development Center, according Jennifer Ekey, city economic development director. She said some office space will be utilized by Middletown Moving Forward and other city partners. NICK GRAHAM/STAFF
Photo: Nick Graham
Photo: Nick Graham

Middletown council reconsidering key lease for Goetz Tower space

Council is considering a five-year lease for the 2,000 square feet on the first floor of the 89-year-old building at 1000 Central Ave. It approved a resolution to lease the first floor of the building in December 2016. Now council members are interested in a 10-year lease that they hope would lower the costs for the city. Council was to have heard a first reading in October, but the ordinance was pulled as questions came up from council.

The proposed lease is five years with rent up to $70,000 per year. That comes to $28 per square foot, according to city officials and Steve Coon, president of Canton-based Coon Restoration and Sealants of the Historic Goetz Tower LLC. Initially, the city did not want a 10-year lease.

The city has not determind how it would use the space but had previously suggested moving its Economic Development Department there.

MORE: Middletown building project progressing after another delay as city eyes first floor

The lease would also include costs to help operating expenses of up to $2 per square foot, up to $75,000 in payments to help improvements and the city paying its own utilities.

Coon said the project needs a signed lease from the city so banks can release funds as part of a complicated financial arrangement to redevelop the building.

In addition to the 2,000 square feet of office space planned on the first floor, Coon is planning to develop 16 market-rate apartments ranging from 800 to 1,100 square feet inside the seven-story, Art Deco building. The building was constructed in 1930 by the Middletown Building and Deposit Association.

MORE: After delays, the significant Goetz Tower renovation project will start in Middletown

“We’ve got the bank approvals and we’re waiting for the lease from the city,” Coon said. “It doesn’t work without the lease.”

The project has been delayed due to various issues including water damage from a broken interior fire main on the building’s fourth floor on New Year’s Day 2018 with water running from the pipe for more than 48 hours. Earlier this year, a nearby Duke Energy transformer malfunctioned filling the building with black smoke. Coon said the building was without electricity for two months but there was no other damage to the building. He is targeting completion of the project for late 2020.

Vice Mayor Tal Moon asked what was “fair market value” for rent and wanted to know what the difference would be if the lease were for 10 years instead of five. Council asked Coon to come back with figures using a 10-year lease.

Councilwoman Ami Vitori asked if the city could sublease the first floor as an option. Coon and his partner Joe Parsons said that something could be worked out. He said the $28 per square foot was based on the total project cost.

MORE: Redevelopment of this 88-year-old Middletown tower back on track to feature apartments, businesses

“I wish I would have known this (could) be an issue six months ago and I wouldn’t have spent the month that we’ve spent up to now,” Coon said. “I really need to know if you want to be a part of this and help move forward with this or if we need to just shutter this and move on.”

PHOTOS: See Middletown’s historic Goetz Tower before redevelopment begins

Both Moon and Vitori told the Journal-News that they want to see the project completed but want the additional information before making a final decision.

“I want to see if there is a better way to finance this project,” Vitori said.

“It’s an important project and I want to see it completed,” Moon said. “I want to see if a longer-term lease would affect the the rental lease and I am also interested in a sublease. I’m still assessing the deal.”

Coon, who has redeveloped 12 buildings in Hamilton and is involved in the Spooky Nook Sports Champion Mill project, was optimistic after Tuesday’s meeting.

“I haven’t had a project that wasn’t successful,” Coon said. “We’re bullish about Middletown and we need Middletown to believe in itself.”

Council will consider final approval at its Dec. 3 meeting.

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