A plan to transform the former Avalon Hotel at 16 W. 10th St. into an apartment complex has taken a big step forward.

The Erie County Redevelopment Authority announced Tuesday afternoon that the Erie County Industrial Development Authority has closed on a $30.6 million bond that will allow New York-based GoodHomes Communities LLC to purchase and renovate the eight-story property.

The purchase of the property also was completed Tuesday.

Plans for apartment complex

GoodHomes plans to transform the building, built as a Hilton Hotel in 1976, into what it calls a 197-unit affordable housing workforce apartment complex that will include leased space on the ground floor as well as a clubhouse, mail room and a laundry room for tenants.

The announcement, which comes on the heels of an announced plan for a $50 million renovation to the Renaissance Centre at 10th and State streets, represents a big step forward for Erie, said Tina Mengine, CEO of the Erie County Redevelopment Authority.

'An eyesore'

"This is a huge project," she said. "The Avalon has sat empty, decaying right in the center of our city. It's an eyesore. I don't think anyone would say anything less. Having an out-of-town investor come in and buy this massive block, it's really important. It's transformational."

Apartments will not be government subsidized, but will rent for what Mengine called affordable prices in the range of $800 to $900 a month. GoodHomes is also expected to lease space on the first floor to UPMC Hamot for medical offices.

Mengine said, "When you couple it with the Renaissance Centre project, this is going to anchor that end of downtown the way EDDC has anchored the northern part. I think this is huge for our city."

The authority's role

She said the Industrial Authority's role was to issue a $30.6 million bond.

"The borrower was able to go for a larger amount and get a lower rate," Mengine said. "It allows them to do this in one fell swoop rather than trying to line up capital stacks."

Construction is expected to begin immediately with spring of 2025 set as the expected completion date. The project is expected to bring about 100 construction jobs to the site. Once completed, the building is expected to be home to about 75 new jobs, including medical professionals, child care, food service and building maintenance.

“Erie’s stakeholder commitment in the renaissance of the downtown is very impressive and what drew us to the region," David Mitchell, who is described as a team leader for GoodHomes, said in a statement. "The support of the EDDC, Erie Insurance Company, Gannon University, UPMC Hamot, Regional Health Services and the ECRDA are making this development possible.”

Charles "Boo" Hagerty, president of Hamot Health Foundation, said in a statement that UPMC is proud to welcome GoodHomes to Erie.

"The Avalon is an iconic building that needed new life," he said. "No better use than to create a modern, clean housing model that is affordable to a vast workforce that would love to make beautiful downtown Erie home. We are a proud partner and excited for the future.”

Drew Whiting, CEO of the Erie Downtown Development Corp., also weighed in.

“Good Homes, encouraged by the recent investments on State Street, and empowered by a public bond financing, came to Erie uniquely equipped to take on the project, and has been steadfast in its commitment," he said.

"Good Homes’ redevelopment of Avalon, along with similar development in the area, serve as reinforcement of our mission and vision, and to double down on the work we’ve done to date.”

GoodHomes, formed in 2022, has been involved in residential development and redevelopment projects involving more than 5,000 apartment units

The company purchased the property from Ramesh Diora, whose ownership group bought the hotel for $1.8 million in 2010.

Contact Jim Martin at jmartin@timesnews.com.

This article originally appeared on Erie Times-News: Work to begin on $30 million transformation of Erie PA's Avalon Hotel