City Block project at Tower City faces challenges post-SHW

An artists' rendering of a new entrance for Tower City Center's
Avenue shopping center, after renovations convert it into City
Block, a business incubator. This is the proposed new main
entrance and public plaza on Prospect Avenue (Vocon).
CLICK IMAGES TO ENLARGE THEM

One of the downtown properties in the running for Sherwin-Williams (SHW) headquarters plus research and development (HQ+R&D) facilities was Bedrock Cleveland's Tower City Center.

But when SHW chose to put its HQ elsewhere downtown and its R&D facilities in Brecksville, Bedrock lost out on landing a major anchor tenant for its ambitious, multi-phase City Block development, located in and south of Tower City Center.

Two sources said that SHW's decisions have caused Bedrock to review its options about the City Block project, especially the riverside phase, and to suspend pre-development planning work.  It is not known if this applies to The Avenue shopping mall portion of Tower City.

The goal has been to redevelop the 350,000-square-foot retail portion of Tower City Center into a $110 million entrepreneurship hub where new and emerging businesses or people seeking to monetize commercial ideas could interact, get expert advice and more easily access capital. However, no leases have been signed for this portion of City Block either, sources said.

That would be the first phase of the City Block plan. Later phases envision an office building, hotel and apartment buildings between Huron Road and the Cuyahoga River, featuring lots of riverside greenspace. The SHW HQ and/or R&D would have served as the anchor for those plans. Without it, the two sources said Bedrock is no longer actively working on City Block pre-development activities.

The riverside phase of City Block, featuring a hotel, apartment
buildings, office building and public parks (Vocon).

But tech entrepreneur and City Block promoter Bernie Moreno disputed the rumors.

"100 percent not true," he said. "If anything, Bedrock is dramatically more engaged in making it happen than ever before."

Although Moreno declined to discuss specifics on leasing activities, including what tenants are being pursued, he said Bedrock's leasing efforts are active.

"Bedrock is working on that part," he said. "We have lots and lots of soft commitments. Signing LOIs (letters of intent) is the next step."

To underscore the case that City Block is an active project, the Cleveland International Film Festival (CIFF) will relocate to Playhouse Square in 2021 after a 30-year run at Tower City Center. Presumably, the move was motivated at least in part by the pending renovation work of Tower City into City Block, although CIFF's press release makes no mention of it.

Ken Till, Bedrock's vice president of development could not be reached for comment.

The image shows conceptual interior renovations and redesign
of Tower City Center's Avenue shopping mall into a hub for
entrepreneurs while retaining some retail on site (Vocon).

Moreno is founder of BlockLand Cleveland the Blockland Solutions Conference and an advocate of blockchain technologies to safeguard and enhance business transactions, record keeping, sales and more.

He sold seven car dealerships in April 2019 to focus his business activities on blockchain technology as a way of securing the transfer of titles for cars but saw its value in other areas. Car dealership sale amounts were not disclosed but could be in excess of $100 million total.

The USA is lagging behind the rest of the world in blockchain development due to lack of standardization, unfamiliarity with the technology, lack of regulatory coordination and relatively slower transaction speeds.

Moreno announced the Tower City site for City Block last summer amid much fanfare. As SHW narrowed its list of potential HQ+R&D sites in October, Bedrock sold its casino businesses including selling off and leasing back its Cleveland-area casinos, raising $843 million in capital in the process.

Tower City Center's The Avenue has been
the hub of downtown shopping since its
conversion from the Cleveland Union
Terminal railroad station 30 years ago.
It retained the rapid transit station
but the retail components faded
away due to high rents, urban
sprawl and new technologies
affecting retail (KJP).

Much of that capital may stay with Bedrock's Rock Ohio Ventures rather than be used for any Bedrock investments outside of Cleveland. If so, Bedrock could use it to develop its Cleveland properties including Tower City/City Block or pursue other local opportunities.

"The combined efforts of our gaming properties together with the other Cleveland assets operated by our sister companies including the Cavs, Avenue Shops at Tower City and the May Company Building, have created a strong connection to the city and allows us to remain heavily committed to the Cleveland area," said Mark Dunkeson, CEO of JACK Entertainment, in an October press release.

JACK Entertainment, like Bedrock, is under Chairman Dan Gilbert's Rock Holdings umbrella.

"We will continue to invest significant capital into these properties which will have a lasting positive impact on the city and Cuyahoga County," Dunkeson added.

END