- A developer with similar projects nationwide has arranged to buy the Avalon Hotel in downtown Erie and transform it into a 219-unit apartment complex
- Erie County Redevelopment Authority has approved issuing $46 million in bonds for project
- Bond revenue will go to developer as a loan, and public will not be liable, authority says
The multimillion-dollar overhaul of the Avalon Hotel in downtown Erie includes more than converting the tired landmark into 219 market-rate apartments.
The developer also intends to bring retail businesses to the first floor of the eight-story, 47-year-old complex, at 16 W. 10th St., between State and Peach streets.
"We are already in discussions with one of your large stakeholders about the ground floor and activating that retail," said David Mitchell, of New York City, who helps run the company that will manage the project. "Dynamic retail is a really important part of redevelopment."
Mitchell — who did not disclose the names of the prospective retailers — made his comments on Tuesday in Erie, as his GoodHomes Communities LLC secured $46 million in financing for the Avalon project through a subsidiary of the Erie County Redevelopment Authority. After hearing from Mitchell, the Redevelopment Authority's board unanimously approved having the Erie County Industrial Development Authority issue $46 million in bonds.
The Erie County Industrial Development Authority is to loan the $46 million in bond revenue ― up from an initial amount of $45 million ― to the Community Finance Corp., an Arizona-based nonprofit that is affiliated with GoodHomes, the manager of the Avalon project. The businesses will use the money to purchase the Avalon and renovate it, with construction to start as soon the real estate closing occurs, Mitchell told the Redevelopment Authority board.
The closing is scheduled for Oct. 31, Mitchell said. He did not disclose the purchase price to the Erie Times-News, citing a confidentiality agreement. He said he expects the renovations to take a year to 14 months.
"This project is ready to go," Mitchell told the Redevelopment Authority board.
The apartments will rent for $800 to $1,000 a month, and will be designed to attract a younger workforce to downtown Erie, Mitchell said. He said the project is meant to fill a need for Erie residents who don't want to buy a house and who want less expensive apartments than those elsewhere in the city. "I think we are the missing piece of the housing algorithm" in Erie, Mitchell told the Redevelopment Authority board.
Renovated Avalon seen as another 'anchor' for downtown Erie
As the Erie Times-News first reported, the project advanced considerably in December 2021, when the Erie Zoning Hearing Board granted a variance to allow 219 apartments in the building — the number of units needed to make the project financially viable, one of the lawyers representing GoodHomes has said. The number of apartments would have been capped at 150 without the variance.
With the variance in hand, GoodHomes then get a building permit, Mitchell said. The next step was getting the financing to gut the 150,000-square-foot building and undertake a project that will add to the redevelopment of Erie's downtown, Mitchell told the Redevelopment Authority board. He cited the work of the Erie Downtown Development Corp. which has been transforming the area around Perry Square with the addition of apartments and retail space. The Avalon is about four blocks north of Perry Square.
"We look at the Avalon, and we look at where it is, and we look at what is going on State Street and around, and we are thrilled to really be a part of that," Mitchell said. "We see that end of redevelopment in Erie, and we think we can be part of that anchor that brings it farther down the street."
Mitchell said GoodHomes specializes in converting older hotels into apartments. GoodHomes has launched or explored similar ventures in 10 cities in the United States, including Detroit and Columbus, Ohio, and Warwick, Rhode Island. Erie represents the northernmost city where it has projects, Mitchell said. The company also focuses on redeveloping senior living facilities into apartments.
Developer responsible for repaying $46 million loan
Though the Erie County Redevelopment Authority played a key role in arranging the financing, the public will not be responsible for making the deal work, said Chris Groner, vice president of capital financing and lending at the Redevelopment Authority
Community Finance Corp. and GoodHomes are solely responsible for repaying the $46 million loan, and the Erie County Industrial Development Authority cannot be held liable for any default, Groner said. He said the bonds are "no-recourse" bonds and protect the Redevelopment Authority and its subsidiary from liability.
As a tax-exempt organization, the Erie County Industrial Development Authority can get better rates on bonds than more traditional agencies. Groner said the Avalon project will not be tax exempt.
Groner said the Redevelopment Authority is excited to be a part of the Avalon project, which he said will boost redevelopment of downtown.
"It's huge, because it affects everything around it," Groner said after the Redevelopment Authority's meeting. He said the authority hopes he project "encourages professionals and others to re-densify downtown."
Apartments in Avalon meant to appeal to younger workers
GoodHomes plans to reconfigure the hotel to accommodate 205 studio apartments measuring 375 square feet, according to the plans GoodHomes presented on Tuesday. Another 14 one-bedroom apartments, measuring 685 square feet, are also planned, primarily on the second floor where the hotel's convention and meeting rooms are now located.
The renovated complex will have amenities that cater to younger professionals, Mitchell said. Among many examples, the plans call for a storage area where tenants can store kayaks, bicycles and other items.
Mitchell said GoodHomes wants to make the Avalon "a place that people are proud to call home."
And though Mitchell did not identify the retailers that GoodHomes is courting for the Avalon, retail tenants are clearly part of the project, based on his comments and the plans he presented to the Redevelopment Authority board. The plans call for retailers to take up 26,750 square feet of the renovated building.
Financing the project: With public agency's help, developer poised to buy Erie's Avalon Hotel, make it apartments
Getting the variance: Proposed Avalon granted zoning variances for construction
Starting the project: Developer aims to turn Erie's Avalon Hotel into apartments; zoning request key to project
Contact Ed Palattella at epalattella@timesnews.com. Follow him on X @ETNpalattella.
