Committee approves option agreement with Penrose for affordable housing at 4242 Lorraine Ave

The Committee of Development, Planning & Sustainability on Feb. 3 approved an emergency ordinance authorizing the director of development to enter an option‑to‑lease agreement with Penrose Holdings LLC (or its designee) for city property at 4242 Lorraine Ave for future redevelopment into affordable housing.

City staff member Trudy Andrzejewski briefed the committee that the site—home to the McCafferty Health Center—has public health occupying roughly 25% of the building and will be vacated in March when services relocate. Andrzejewski said the city issued a request for qualifications in fall 2024 and selected Penrose to pursue an affordable housing development with community amenities and nonprofit/social‑service ground floor space.

Jeff Mills, regional vice president for Penrose, said the proposal calls for 62–72 units targeted to a range of incomes (including units at 30% to 70% of area median income). He provided example rents from the project's targets: a studio at 30% AMI would rent about $522 in Cleveland, while a three‑bedroom at 70% AMI would be roughly $1,800. Penrose intends to pursue 9% low‑income housing tax credits and other elements of a large capital stack; staff said an option agreement is needed to establish site control for a Feb. 28 OFA application without triggering a choice‑limiting action that could jeopardize funding.

The city also intends to use an option to secure more than $1,000,000 already awarded by the Federal Home Loan Bank for the project, Andrzejewski said. Penrose described sustainability goals (LEED standards), community meeting rounds (four community meetings documented), pending design review with landmarks and planning commissions, and an anticipated construction timeline: closing in April/May 2027, construction completion in Sept. 2028, and full occupancy in 2029.

Committee members, including the ward council representative, voiced support and asked technical questions. A council member asked whether the existing building would be demolished; staff said the proposal calls for demolition because the existing structure is inefficient and not a contributing building to the landmark district, but that demolition still requires landmarks review and a vote. Penrose estimated proposed parking at about 42 spaces and confirmed Penrose Management Company would manage the property.

Chair closed discussion and announced Ordinance 282026 "stands approved." The transcript does not include a roll‑call vote. The option agreement gives Penrose site control adequate to pursue 9% tax credits and secure awarded funding; subsequent approvals (landmarks, planning commission, financing closings) remain as conditions to construction.