Tuesday, December 3, 2019

Cleveland Foundation acquires Midtown land for new HQ

The Cleveland Foundation has taken title to and recorded a
deed for land on which it will build its 50,500-square-foot
headquarters (shown in orange) on the northeast corner of
Euclid Avenue and East 66th Street (Cleveland Foundation).
Despite a cloud of legal action hanging over it, titles to two Midtown properties were transferred last week to the Cleveland Foundation for its proposed new headquarters.

A 50,500-square-foot HQ is proposed to be the first phase of a civic and mixed-use district along both sides of Euclid Avenue and on both sides of East 66th Street led by the foundation.

The Cleveland Foundation said it is leading multiple partners and investors in a direct real estate development approach to bolstering Midtown to enhance the vibrancy of Cleveland’s neighborhoods and public spaces.

The foundation said it considers the creation of a new civic and mixed-use district in Midtown to be essential to that mission. Relocation of its offices from Playhouse Square to Midtown will help further that mission, it contends.

Design, construction and relocation activities of its new HQ are expected to take up to three years. Transfer of the properties to the Cleveland Foundation will enable it to begin development of its new headquarters "as soon as outstanding contingencies are promptly resolved," as written in public statements issued by the foundation in recent months.

Presumably, those unresolved contingencies refer to the ongoing litigation. Cleveland Foundation Media Relations Officer Alan Ashby didn't return a phone call seeking comment prior to publication of this article.

Midtown Cleveland Inc. Executive Director Jeffrey Epstein said he could not comment on the foundation's HQ project, or the timelines of what comes next for it.

Two non-contiguous parcels totaling 1.364 acres along the east side of East 66th Street between Euclid and Chester avenues were transferred Nov. 25 to an affiliate of the Cleveland Foundation for $600,305, according to the Cuyahoga County Recorders' office.
Rendering of what the proposed headquarters of the Cleveland
Foundation could look like. At right is the Dunham Tavern Mu-
seum property including the large amount of urban greenspace
that will remain after the HQ is built (Cleveland Foundation).
East 66th Street LLC was incorporated on May 15, 2019 by Cleveland Foundation President Ronald Richard, Ohio Secretary of State records show.

The property was acquired from the Dunham Tavern Museum. Dunham Tavern, built in 1824 as a farmhouse and stagecoach inn, is the longest surviving structure in Cuyahoga County still located at its original site.

A limited warranty deed was also filed with the Cuyahoga County Recorder's office on Nov. 25. It has East 66th Street LLC's tax mailing address listed at Midtown Cleveland Inc., 5000 Euclid Ave., Suite 100.

The deed includes a number of property usage restrictions, including limiting any development built on the two parcels to no more than four stories in height. It also precludes pornography businesses, strip clubs, massage parlors, head shops, fast food businesses, houses of worship, disco/nightclubs, warehouses, single-use retailers of 25,000+ square feet, drive-through lanes and any operations associated with cannabis.

A third parcel measuring 0.4 acres was acquired by the Cleveland-Cuyahoga County Port Authority in February 20, 2019. It sits between the two parcels the foundation acquired. The port authority has a long-standing, formal partnership with Lassi LLC -- Midtown Cleveland Inc.'s real estate arm.

As seller, Dunham Tavern Museum, an Ohio non-profit corporation, originally reached a purchase agreement on March 18 with Lassi Enterprises.

According to the deed documents, the purchase agreement was assigned by Lassi Enterprises to East 66th Street LLC on Aug. 8. The agreement was then amended on Aug. 26 to acknowledge the assignment from Lassi Enterprises to East 66th Street LLC.
Looking north up East 66th Street from Euclid Avenue, the
Cleveland Foundation's proposed civic center will restore
some of the lost density of this once-vibrant urban neigh-
borhood, including a new property acquisition by the
foundation on Euclid just east of East 55th Street and
the railroad tracks (Cleveland Foundation).
But several Dunham Tavern Museum members had already filed suit on May 30, alleging that the museum corporation and two of its board members were acting in a manner that conflicted with the interests of the museum by selling the properties.

The lawsuit was dismissed on July 24 by Cuyahoga County Common Pleas Judge Nancy Margaret Russo.

The plaintiffs filed a notice to appeal the ruling on Aug. 16 and, as appellants, they have until Dec. 7 to file reply briefs to the appellee's brief that was filed Nov. 27, according to the Eighth District Court of Appeals' docket.

In addition to the Cleveland Foundation headquarters on the east side of East 66th, a partnership of investors will pursue the development of a 100,000-square-foot Center For Innovation on the west side of East 66th, north of Euclid Avenue.

Furthermore, in August, the foundation also acquired from the Greater Cleveland Regional Transit Authority 2.38 acres of land on Euclid Avenue just east of East 55th and the railroad tracks for the development of a mixed-use project. Like the Center For Innovation, the foundation will lead a partnership of investors to develop it.

"The foundation doesn't develop real estate," Epstein said. "Aside from their headquarters, their partners will develop the real estate. We'll work with them to decide what is the right mix of uses for the (Euclid Avenue) site" across from the new University Hospitals Rainbow Health Center.

Lassi and the port authority have acquired multiple properties throughout Midtown. They have razed and cleared any structures on those properties and are making the cleaned-up parcels available for redevelopment.


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