Developer succeeds by tapping into urban market
By Marc Lefkowitz
Conventional wisdom suggests that during sustained
periods of low interest rates, people purchase homes and high-end
apartments go vacant. Such wisdom would make developer David Perkowski
far from conventional.
Perkowski develops and manages market-rate apartments
at a time when Cleveland ranks near the top of national indices
of housing affordability. And his places are filling up with tenants.
Perkowski has tapped a market—urban dwellers with money—
and supplies what they want, he says.
David Perkowski grew up in Strongsville where his
father worked in a factory. When he received his undergraduate degree
from Cleveland State University in 1987, he started buying small
apartment units in the city. Soon after, Perkowski left his job
in banking and began redeveloping larger buildings into apartment
spaces. He convinced his more mechanically inclined brother Doug
to go into business with him and they formed Charge Development.
David had the financial acumen and Doug managed the
buildings, and together they would pioneer the wave of market-rate
apartment projects in Tremont and Ohio City. For the next 17 years,
they rehabbed places like The Merrill on W. 25th and the Federal
Knitting Mills at W. 29th and Detroit and marketed them to artsy
and urban types.
The business relationship ended a few years ago, but
Perkowski and his wife, mother of two sons, and business partner,
Karen, divulge few details of the split, except to say “we
changed directions and lifestyles.”
It’s a hazy summer afternoon and Perkowski is
giving a tour of his latest creation—the $4.5 million Hyacinth
Lofts—51 units in a converted Cleveland Board of Education
building. The building and lot occupy a sleepy, tree-lined corner
of E. 63rd Street and Waterman, facing a park in Slavic Village.
Perkowski excitedly talks about the building’s
common video screening area, and swats away questions about the
inherent risks in managing properties.
“There’s been a lot of success in Slavic
Village,” he says, matter of factly summing up the extent
of his market research. “The five-year holding period [required
on deals that get Historic Tax Credits like the Hyacinth Lofts before
most developers sell units off as condos] is just one part. The
key to the rental business is building community.”
With receding light brown hair, small, oval-frame
glasses and a dash of Woody Allen-like nerdish confidence, Perkowski’s
voice climbs a notch as the tour of Hyacinth leads into a six-car
garage that he’s in the process of converting to a shared
studio space for performing artists. Some units are equipped with
sound editing rooms and all have industrial touches like giant concrete
support columns and exposed brick and ductwork.
Perkowski’s track record helped secure some
public financing, including a $420,000 grant from Cleveland’s
Housing Trust Fund (which is supplied by Federal block grants),
and a $500,000 forgivable second mortgage from the Cleveland Development
With construction nearly complete, 30 percent of
the units are rented to the likes of a filmmaker with two small
children, a photographer and a dancer—established professionals.
Unlike Perkowski’s much higher profile project, the $10 million
Tower Press apartment renovation completed last year, Hyacinth isn’t
offering 16 below market rate lofts to artists based on a juried
review. That move earned Perkowski instant recognition for a project
that is first of its kind for the region, perhaps the nation.
“When we called other cities like Austin to
find out how to do this, they didn’t have anything like [Tower
Press],” says Karen Perkowski.
She speculates that her husband’s reputation
for “getting things done” may have been the reason then-Community
Development director Linda Hudacek called. Hudacek was helping the
building owners find a developer who didn’t mind a tree growing
through the roof and other structural issues.
“Nothing is insurmountable to David,”
Karen says. “He never gives up.”
The higher risk at Tower Press—“Literally,
every day we had to check the structural columns,” he says—offered
greater rewards. Tower Press is nearly 100 percent occupied and
interest continues to have a spill over to Hyacinth Lofts (Perkowski
has done very little in the way of advertising).
There may be greener pastures to pave over for profits
in the ‘burbs, Perkowski admits, but he’s found his
niche in the city.
“There’s a higher growth opportunity outside
of Ohio, in places like Las Vegas...we need to create jobs in Cleveland
and that will help increase the demand for housing.”
Perkowski doesn’t pretend to have answers on
how the city could begin doing that. But, for his part, he sees
Tower Press and Hyacinth Lofts as a calculated gamble on the future
The Tower Press is once
again announcing the availability of subsidized live/work lofts
for artists earning less than $25K a year. Artists will be selected
through a competitive 2-part jury process. First, artists' submissions
will be screened, and finalists will be selected by a jury of outstanding
regional arts professionals. Then finalists will be interviewed
and selected by a panel of community leaders. To apply, artists
should submit a resume (including complete day and evening contact
information), 10-15 clearly labeled slides of work (at least 10
current work), a slide description sheet, and a self- addressed,
stamped envelope (for return of slides) to: Tower Press Ltd. P.O.
Box 91644 Cleveland, OH 44101-3644. For details, email email@example.com.