City officials and developers leaned heavily on the program to attract capital for downtown office conversions and new hospitality projects. Now, community groups and local funders are pushing for proof that the deals did more than polish up the city’s core.
As reported by Crain’s Cleveland, several marquee efforts have been proposed in recent years as Opportunity Zone plays, including Project Scarlet, the planned conversion of the Rose and Sloan buildings into apartments and a Marriott-branded hotel. Those high-profile downtown projects became test cases for a strategy that steered tax-advantaged capital toward historic rehabs and new construction.
Where the Money Went
A postmortem from the Fund for Our Economic Future shows why scrutiny is picking up. The group’s debrief found that Cleveland attracted more than $302 million in reported Opportunity Zone investment, ranking third nationally. Yet most of that money went to market-rate housing and commercial space, not to neighborhood businesses or to direct job creation.
The Fund concluded that much of the activity “likely would have happened anyway,” raising doubts about whether the federal tax break produced the equitable outcomes that were promised.
Project Scarlet and the Downtown Playbook
Project Scarlet, the adaptive reuse of the Rose and Sloan buildings, is a clear example of the model. State historic tax paperwork pegs total costs at roughly $100.15 million and shows the project received credits, according to the Ohio Governor’s Office. Contractor materials list Cleveland Construction as the lead on the office to hotel and residential conversion.
Strategy Aligned With Preexisting Plans
That pattern was by design. Cleveland’s Opportunity Zone selections were drawn to line up with preexisting downtown and corridor plans, with a deliberate tilt toward commercial and industrial tracts that were more likely to attract private capital…