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Aug. 6, 2013

Forest City Sells Cleveland’s Higbee Building to Horseshoe Casino Owners

By Adrian Maties, Associate Editor

Forest City Enterprises Inc. last week finalized the sale of the 14-story Higbee Building, one of Cleveland’s most renowned historic places. Rock Ohio Caesars L.L.C. is the property’s new owner. It opened the Horseshoe Casino Cleveland there last year.

Moody’s Investors Service disclosed Rock Ohio Caesars’ plans to buy the 815,000-square-foot office building in March in a report grading the joint venture’s bid for $535 million in loans. The sale price was approximately $79 million, and it generated approximately $39 million in net cash proceeds for Forest City.

“We continue to execute on our strategy of focusing on our primary core markets – New York, Washington, D.C., Boston, Denver, Dallas, Los Angeles and San Francisco,” said David LaRue, Forest City president & CEO, in a statement for the press.  “We will use liquidity from dispositions such as this to continue to reduce debt and improve our balance sheet, invest in our mature portfolio and activate entitled development opportunities in core markets.”

Now that the acquisition is concluded, Rock Ohio Caesars is expected to start construction this month on a 170-foot, glass-enclosed, pedestrian bridge that will link the second floor of the casino to a nearby parking garage also owned by the joint venture. It will span the intersection of Ontario Street and Prospect Avenue. In the report, Moody’s Investors Service said the walkway is expected to facilitate more convenient access to the casino and help boost both visitation and length of stay.

Constructed in 1931, the Higbee Building is part of the Tower City Center, a large mixed-use facility composed of a number of interconnected office buildings and included on the National Register of Historic Places. It underwent a renovation project a few years ago.  In order to start construction on the skywalk, Rock Ohio Caesars had to buy the property and make sure that investors in historic preservation tax credits on the building were repaid.

Photo credits: Forest City Enterprises, Inc.

 

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