After four tries, Manchester Hotel awarded $4M state historic tax credit. But a lawsuit is still pending

The Manchester Hotel in Middletown has sat empty for nearly a decade, but the latest nudge toward a possible redevelopment came this week.

The Ohio Development Services Agency announced Thursday that the project, which also includes the adjacent Snider Ford/Sonshine building, was awarded a $4 million historic tax credit. The project cost was estimated at nearly $40.3 million, according to ODAS.

It was the fourth time that a historic tax credit application was submitted for redevelopment of the 98-year-old building.

ODAS said the Manchester project was among the more than $26.5 million in Ohio Historic Preservation Tax Credits in the program’s for the rehabilitation of 51 historic buildings. Together, the projects are expected to leverage approximately $259 million in private investments in 11 communities, the agency said.

Developer William Grau of Historic Urban Developers, who had been unsuccessful in receiving this tax credit in previous rounds, remains in a legal battle with the city of Middletown.

The city claimed the project should had been completed and took action to try to regain ownership in October 2018. Grau filed suit in December 2018. The litigation put a hold on the project.

Grau did not return a call for comment on the tax credit award or upcoming court case. His attorney, Rick Hamilton, declined comment as he had not spoken with Grau on Thursday.

Both buildings have been vacant for years, but plans include restoration to serve as a hotel again, and the Snider Ford Building would become a neighboring microbrewery and taproom.

Built in 1922, the hotel will have 91 rooms and suites and will maintain the restaurant, bar, and ballroom spaces.

The Manchester Hotel was added to the National Register of Historic Places in 2014.

Grau’s company purchased each building for $1 as part of a redevelopment deal in 2014. Both buildings have been vacant for several years and have been the target of break-ins and vandalism.

City officials were not optimistic about seeing the project move forward after the tax credit award was announced.

“Unfortunately, the granting of State Historic Tax Credits accounts for only one small piece of the necessarily complex capital stack that would be required to result in the Manchester project moving forward as a large-scale adaptive reuse of the property for a boutique Hotel and micro-brewery,” said City Manager Jim Palenick.

“The city is not optimistic that all of the other necessary components of said capital stack can yet come together to make the project a reality.”

He said more information on the project’s future is expected in the coming weeks.

The case has a Feb. 16 trial date in Butler County Common Pleas Court. A pre-trial and settlement conference is scheduled for Jan. 7, according to court records.

Manchester Hotel timeline

1922: Formal inauguration of the Hotel Manchester was Nov. 3. Named for a village once located at the northeast corner of Middletown, it was built over a three-year period at a cost of $600,000.

1985: Armco briefly closes the hotel and dining service due to lack of funds. State Sen. Barry Levey buys the hotel from Armco.

1995: A $1.7 million renovation of the guest rooms, corridors, lobby and front desk is completed.

Jan. 3, 2011: Manchester Enterprises LLC announces at 7 a.m. to staff that the hotel is closing. Employees are sent home, the doors are locked and signs are posted announcing the closing.

2014: Listed in the National Register of Historic Places as the Hotel Manchester.

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