The Pizzuti Cos. real estate development company may have removed a key stumbling block that has delayed construction of a mixed-use commercial project in the Short North.

A straw poll of Victorian Village Commission members at the end of an Oct. 28 meeting with the Italian Village Commission revealed a majority of the zoning panel believed redevelopment of the former United Commercial Travelers property and an adjoining property would pose an economic burden. Because of that, the panel may support allowing the developer to knock down a portion of the vacant office property, which is deemed a historic structure. The city’s Development Commission would have the final vote.

Pizzuti’s mixed-used project involves demolishing a portion of the 26,500-square-foot Travelers building at 632 Park St. to make way for a parking garage and 50,000 square feet of offices. That component has delayed formal Victorian Village votes on the project that began in February 2008 as a hotel atop a parking garage.

Since that time, the 130-room boutique hotel project has been moved across High Street onto a city-owned parking lot in Italian Village.
The two commissions have met nine times since March to discuss the Travelers building, which Pizzuti Chairman and CEO Ron Pizzuti wants to use as an art gallery to showcase his personal collection. Also discussed have been design issues related to the hotel and office projects.

“We feel good about the direction we’re going,” said Pizzuti President Joel Pizzuti, the chairman’s son. “I think the commissions and the neighborhood feel good about the direction we’re going.”

Design matters

Redevelopment of the Travelers property has languished since Dublin developer Patrick Grabill first proposed a condominium tower and parking garage in April 2007.

Pizzuti Cos. took over the contract to purchase the property and unveiled plans for the hotel. It later reduced the hotel rooms to 130 from 160 but added 60,000 square feet to the complex for offices.

Since then, Pizzuti Cos. has purchased the Travelers building and parking lot for $4.5 million after the fraternal organization moved to offices off Grandview Avenue and Dublin Road.
In an Oct. 26 letter to Pizzuti Cos., Travelers CEO Joseph Hoffman said the Short North property “had reached a point of obsolescence,” prompting the organization to sell the property after 80 years in the building.

“Annual operating costs were substantial,” Hoffman wrote in the letter shared with the commissions, “and the cost to renovate the building was not financially or operationally feasible.”

During the meeting, Pizzuti officials also outlined the financial difficulties in renovating the Travelers building, purchased for $2.14 million, with another $2.12 million needed to bring it up to code.

Total redevelopment of the property could cost $5.6 million, including the acquisition and other costs, bringing construction per square foot to $213.

Despite that investment, the building likely could not attract office rents high enough to justify that alternative use in large part because of the difficulty of leasing 10,000 square feet of the property that lies below street grade. It would gross about $225,000 a year before considering a 5 percent vacancy allowance and other factors.

Victorian Village Commissioner Rob Vogt, a staunch critic of demolishing the cross-shaped Travelers building, pressed the issue about renovating the whole property and leasing out just the portion not used as the art gallery.
But Pizzuti officials said severing the building and leasing out the back portion to other tenants couldn’t work, both from an economic standpoint and security concerns for the art showcased on the Park Street section.

“If that was an option,” Joel Pizzuti said of leasing out a portion of the building, “we wouldn’t have acquired the building.”

After more than an hour of discussion, Pizzuti asked to “take the temperature” of the Victorian Village commissioners as to whether they believe the developer had presented enough evidence to prove economic hardship so they might formally consider approval of the partial demolition and the development plan.

A majority indicated they leaned toward that approval, including Vogt, who still had serious reservations.

“On the surface, it appears (the developer) could meet the standard of economic hardship,” said Vogt, a principal in the Vogt Santer Insights real estate consulting firm.

Still, he’s not sure the proposed replacement project fits the commission’s need to balance the preservation of buildings with important historical, architectural and cultural values with the merits of the proposed replacement.

“I struggle with replacing a portion of a historic building with a parking garage in a residential neighborhood,” he said.

Pizzuti said he expects to host a community meeting on the project Nov. 18, the day after the commissions have tentatively set as the next and possibly last joint meeting.

At that meeting, the Victorian Village commissioners may consider the demolition and the office/garage project.

If approved, the Italian Village Commission would consider the hotel later.