On December 6, the Cleveland City Council agreed to allocate $8 million in federal stimulus funds to rehabilitate a vacant high-rise apartment building in Hough.

It is the largest sum pledged to a real estate project, so far, among the $511.7 million in funds from Cleveland’s American Rescue Plan Act.

It’s also the most important birthday present Gina Merritt has ever received.

Merritt, who turned 55 that day, is the lead developer and 51% owner of the project. The founder of North Real Estate Urban Ventures LLC, based in Washington, DC, she has spent much of her career working in affordable housing development and finance.

But managing other people’s transactions caused her to struggle to build her own balance sheet. For Merritt, the condemned building at 9410 Hough Ave. is an open door – an opportunity to strengthen both a community and its business.

“I’m a small minority developer,” Merritt said over coffee on a cold December morning. “If I screw this up, it’ll follow me everywhere. I’m not one of those big, multi-billion dollar developers where they screw up and, whoosh, it just goes under the rug.”

People who know Merritt say any bet on her is well placed.

“She’s a force to be reckoned with,” said Seth Whetzel, business development manager at Capital Impact Partners, a non-profit community development financial institution in the nation’s capital.

“She doesn’t feel entitled to anything,” he added, “but, boy, does she pay it forward.”

Along with his partner, Texas-based SLSCO Ltd., Merritt plans to restore the 116-unit property in Hough as workforce housing. The one- and two-bedroom units will serve households earning 60% of the region’s median income, or $33,060 to $42,480 per year.

Construction could begin in July and end in 2024.

The $36.6 million project includes a new two-story community center next door, where residents and neighbors will have access to basic health screenings and other services, including help with job seekers. jobs and entrepreneurs. A second phase of development will bring an additional 44 homes, also income-limited rentals, on nearby land.

The tower, originally called Community Circle I, is condemned. It has been empty since 2008, despite its location just half a mile from the Cleveland Clinic’s front door. But it’s a solid structure, built in the early 1970s as part of a larger urban renewal effort championed by neighborhood groups and the nonprofit University Circle Inc.

Covenants placed on the site years ago by the US Department of Housing and Urban Development limit the use of the property to affordable housing. These commitments drove away other potential developers, who wanted to turn the tower into luxury apartments – in one case, with a heated pool, private cinema and rooftop bar.

Merritt’s approach to projects is as much about people as it is about bricks and mortar.

She grew up in affordable housing, although she didn’t realize it as a child in the Bronx. Her mother died when she was 13 and she helped raise her younger siblings. She swore early on that she would be financially independent, that she wouldn’t rely on a man to get by.

She studied business administration at Howard University, worked on Wall Street and earned an MBA. Then she moved into real estate, working for a series of developers on everything from low-income housing to condominium deals.

Along the way, she got married, had a daughter, and divorced. She moved to the west coast and back. She reconnected with her high school boyfriend and married him. And she walked a tightrope of being a mother and business owner, while pursuing a career where she was usually the only black woman in the room.

Ten years ago, she crossed paths with Meg Manley Garrett, an affordable housing developer and consultant who eventually brought Merritt to northeast Ohio. The women bonded over common frustrations and similar stories about their experiences in a male-dominated industry.

“She doesn’t give up. She has tremendous integrity. And she’s hilarious,” said Garrett, who recently left his role as Director of Development Services at RDL Architects in Shaker Heights to start a consulting firm called SpringCreek. Advisors.

In early 2021, an investor from Florida approached RDL about this dilapidated building in Hough. He was the highest bidder for the tower at an online auction, the culmination of a protracted sales effort by foreign owners who had been struggling with the property since 2018.

This Florida buyer had no experience with affordable housing — and no chance of meeting HUD requirements, Garrett said. She suggested he turn the project over to someone else.

“Gina immediately came to mind,” Garrett said. “As a black woman, she is currently in a position where we so need diversity in the development community. We so need developers working in communities where they can connect directly with people in that community.”

SLSCO, a general contractor and construction manager specializing in disaster relief, was one of Garrett’s clients. The company had the cash to buy the property in June – and was willing to provide financial guarantees while letting Merritt take the lead.

“These guys, white dudes from Texas, believe in me more than any other partner I’ve had,” Merritt said. “They believe in me, and then they show up.”

The structure of this partnership allows him to earn enough money to hire more employees and get more credit for his business. She sees the project, which the team calls Ninety-Four Ten Hough, as the basis for several deals where she can be the majority partner, rather than working for a small stake or modest fee.

It plans to open a satellite office in Cleveland by the summer and is already pursuing other local projects. She also talked about buying a house here.

“My husband has now asked me if we are going to continue living in Baltimore County,” she told council members last month.

The council-approved legislation covers American Rescue Plan Act funds and the sale of a few city-owned plots of land to make space for the community center. The $8 million will be a grant to a nonprofit entity associated with the project, said Michiel Wackers, the city’s acting director of community development.

It is an exceptionally important contribution for the city to an agreement, he acknowledged. But 9410 Hough was eventually going to land at the feet of officials, he said, perhaps as a teardown that could take up a huge chunk of the city’s annual demolition budget.

“At the end of the day, it’s about whether we deal with it now — or whether we get sucked into it later and then unravel a mess,” Wackers said.

The federal injection of money for pandemic relief has provided a one-time opening to clean up wreckage, create much-needed affordable housing and support a minority female developer, he said. The grant will not flow to the project until the remaining funding, including tax-exempt bonds and non-competitive low-income housing tax credits, is in place.

Merritt began visiting Cleveland in July and meeting locals from Hough. She didn’t want to publicize the project until she heard about the neighbors’ needs — and until she told them about herself and Project Community Capital, an economic empowerment initiative she started. imagined in 2010 and officially marketed in 2017.

Working with Merritt is exciting and different, said Khrys Shefton, director of property development for Famicos Foundation, a nonprofit development corporation that serves part of the East Side. Famicos will lead Ninety-Four Ten Hough.

“It gets into the conversation with the residents in your mouth before they’re in mine,” Shefton said of Merritt’s style. “That it’s not cute for you, or cute for your business, in terms of putting residents to work. It’s already part of the model. It’s ingrained in the job.”

Shefton envisions this pocket of Hough becoming a true mixed-income neighborhood. There is plenty of housing for low income people. Developers are tying up vacant land for mark-to-market projects, such as the Axis at Ansel apartment building that opened in 2020 and the planned 77-unit Park Lamont Residences to the south. Merritt’s project will fill a gap between the two.

“To really solve housing problems and inequality in this country, it takes a village,” Garrett said. “It takes people who are willing to go the extra mile. It takes foundations. It takes community. team…we can make an impact.”