One of the busiest pediatric facilities in the country, the top-rated 628-bed Cincinnati Children's Hospital Medical Center employed 13,000 in Cincinnati and was growing fast. The hospital needed to consolidate back office operations outside the main campus in order to expand its care and research capabilities.
Meanwhile, Cincinnati Children’s close neighbor, the Vernon Manor Hotel, was struggling. Built in 1924, it was modeled on a British stately home and over the years, it hosted luminaries from George Bush to The Beatles. Even as demographics changed, it remained a neighborhood centerpiece. But eventually, it could not maintain its prestigious standards and was forced to close its doors.
The year was 2009 and financing options were few.
Enter PNC Real Estate. Building on a long and deep relationship with Cincinnati Children’s and with developer Al. Neyer, along with New Markets Tax Credit (NMTC) capabilities, PNC Real Estate delivered financing to convert Vernon Manor into 171,000 square feet of office space for the hospital. The transaction included an intricate capital stack that featured financing from the City of Cincinnati and a state bridge loan, plus new markets and historic tax credits.
The renovation helped to attract and maintain thousands of well-paying jobs within the city center and restored the Vernon Manor to its original glory. It also provided an opportunity for minority investors to support the revitalization of a treasured landmark.
But Al. Neyer had an even bigger vision.
Most recently, the developer engaged PNC Real Estate to provide a $28.3 million construction/mini-perm loan for the development of an additional 146,000 square foot office tower for more of Cincinnati Children’s back-office operations, along with more than 750 parking spaces, all within the Vernon Manor campus.
Once again, minority investors played a large role in the financing of the property. The new development brings more employment opportunities and supports further growth in an underserved area of Cincinnati.
“PNC is a tremendous partner for our company and projects that create dramatic change in our community,” says Molly North, president & CEO, Al. Neyer. “The PNC team played a critical part in creating an opportunity for minority investment and supporting a key project for Cincinnati Children’s Hospital Medical Center. We couldn’t do this important work without the group from PNC.”
Reporting on the January 29, 2016, ground breaking ceremony, Bowdeya Tweh of the Cincinnati Enquirer noted: “Ed Rigaud, former Procter & Gamble executive and former National Underground Railroad Freedom Center president, said Friday was a historic day because it helps grow the economic ‘pie’ for blacks and others in the community.
‘It's not about the money so much,’ said Rigaud, who serves as president of REEAAL LLC, one of the minority-led investment groups that helped finance the project. ‘It's about climbing the economic ladder.’"
Date: December 2015
Location: Cincinnati, Ohio
Financing Amount: $28.3 million
Financing Type: Construction/mini perm loan
Scope: 146,000 square feet and more than 750 parking spaces
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