Sherwin-Williams has Cleveland's number, thankfully

The days may be numbered for Sherwin-Williams' Breen
Technology Center, 601 Canal Rd. But they also appear to be
numbered for the coatings giant's larger research facility in
Minneapolis. Both may be consolidated as a result of major
changes to the growing company's space needs (Ohio EPA).
CLICK IMAGES TO ENLARGE THEM.

One number can convey a lot information. But it also leaves a number of questions unanswered.

As many longtime readers of this blog know, I've been closely following Sherwin-Williams' (SHW) worsening office space situation and upcoming request for proposals (RFP) to build a new world headquarters (HQ) in the Greater Cleveland area. That coverage earned this blog some mainstream media coverage recently.

A source came to me recently with a succinct piece of information about the global coatings giant: "Sherwin-Williams' RFP has only 330,000 square feet," he said.

I said to him that that doesn't make any sense as another source had previously told me that the SHW HQ plus research and development (R&D) facility would total 1.6 million square feet. Two other sources had confirmed it by noting that a new SHW HQ tower, if built on the Jacobs Lot on Public Square, would be as large as the 1.25-million-square-foot Key Tower, if not larger. And that's without the R&D space included.

We both quickly came to the realization that the 330,000-square-foot structure in the RFP is probably SHW's R&D facility. After checking with other sources, all signs still indicate that the HQ RFP won't be issued until the end of this year.

Another realization: the number "330,000" could also portend some very good things for Greater Cleveland.

Breen Technology Center has an attractive riverside campus in
downtown Cleveland where Sherwin-Williams was founded in
1866. But the well-kept research center is undersized, cramped
and isolated from the rest of downtown (Google).

Consider.... SHW's existing R&D facility in Cleveland is the cramped 140,000-square-foot John W. Breen Technology Center, 601 Canal Rd., divided primarily among two buildings. One dates from 1948 and the other from 1998. Roughly 400 scientists and researchers help plot the future for the Fortune 500 company from that address.

When SHW acquired coatings rival Valspar Corp. two years ago, Valspar HQ office staff in Minneapolis was either bought out or moved here. Any replacements were hired to work locally. Many ended up at SHW's new flex office space on Hinckley Industrial Parkway.

But Valspar's R&D staff stayed in Minneapolis. SHW has been consolidating R&D spaces but couldn't bring any Valspar R&D staff to Cleveland due to the already crowded conditions at Breen and the lack of suitable flex research facilities here. Even SHW's Automotive Finishes office/lab in Warrensville Heights wasn't sufficient.

SHW wants to consolidate its research sites. SHW closed its Chicago lab and moved its employees into a former Valspar Applied Science & Technology Center, 1101 South 3rd St., near US Bank Stadium in downtown Minneapolis. That complex, spread among several renovated historic structures, measures more than 170,000 square feet.

All three brick buildings in this scene at 11th Ave. South and
South 3rd St. represent the former Valspar headquarters and
research center near downtown Minneapolis. This scene was
from August 2017, just two months after Sherwin-Williams
won regulatory approval to buy its coatings rival (Google).

Breen is 140,000 square feet. Valspar's R&D is 170,000. Combine them and you have 310,000 square feet. Add another 20,000 square feet for some breathing room and future expansion and you have 330,000 square feet.

If that calculus is sound, then it appears that SHW will consolidate its domestic R&D activities in the same structure. R&D consolidation has been the trend for SHW for a while now anyway. That could be good news for Greater Cleveland if the R&D facility ends up here. Word is that SHW executives like having R&D close by, preferably within walking distance of the HQ. R&D consolidation could mean hundreds more good-paying jobs for this region.

Back to the math.... Subtracting 330,000 from the 1.6 million square feet of total space needs for SHW's HQ and R&D leaves 1.27 million square feet for a new HQ. That puts it in Key Tower territory.

But all of this poses new questions that don't have any answers or even any solid clues yet. For example, why is a separate RFP for 330,000 square feet being put out there by SHW's real estate broker? If it's for SHW's R&D facility, as it appears, why is the R&D being pushed out to development teams separately from and in advance of the HQ?

Sources say this rendering that was part of Cleveland's sales
pitch to Amazon to attract its HQ2 here reportedly bears a
striking similarity to a 2015 rendering by SHW of its new
headquarters on the Jacobs Lot. Sources said the second-
tallest proposed building in this image, at the northwest
corner of Superior Avenue and West 3rd Street, was also
part of the SHW rendering, possibly enclosing an R&D
facility. The rest of the highlighted buildings are either
existing or part of a former Weston plan (WEWS).

The speculation here is that SHW already knows where it wants to build its HQ so it can consolidate offices from at least four scattered buildings into the same structure. It's likely the same site for which SHW has already done extensive due diligence since before 2015 -- the Jacobs Lot on Public Square.

As noted earlier, SHW reportedly is on track to issue an RFP by the end of this year for building the HQ tower, but it doesn't look like it will include a months-long site search. That RFP's distribution may be targeted only at construction project delivery teams to design and build a new tower.

The RFP for the R&D facility is apparently being left wide open to competing property owners with sites around the Greater Cleveland area. Unlike the HQ, which must be located in the City of Cleveland unless SHW's articles of incorporation are amended, the R&D facility can be located anywhere. Although I'll wager that the HQ and R&D facility will ultimately be built within walking distance of each other. What is to become of Breen? Will it be demolished or repurposed?

As for the Jacobs Lot, SHW already knows a lot about it -- from the air currents 1,000 feet above the city to the bedrock 250 feet below it. SHW will need to learn about proposed R&D sites around the region before deciding which is best for continuing the innovations that have arguably made SHW's products the best in the coatings industry. That will take time, and that's likely why SHW's 330,000 square feet of space needs are being put out there separately, now.

END

Cleveland can energize its lakefront in 10 years. Here's how...

The City of Cleveland, Cuyahoga County and other regional
stakeholders possess the fiscal resources to turn downtown's
lakefront into one of the best on the Great Lakes. The above
vision for the lakefront is a mix of recent and emerging plans
that have failed to attract the political will needed to become
a reality. But perhaps pursuing all of those plans at roughly
the same time might draw enough support to achieve them.
Below is the existing, disconnected, unfriendly downtown
lakefront (Google/KJP). CLICK IMAGES TO ENLARGE

Greater Clevelanders' favorite past-time is to complain about the weather. But somewhere in their top-five of complaints is probably the attractiveness of our downtown lakefront. As I write this, several projects proposed for the lakefront are in active discussions by community leaders and appear to be competing for the same pieces of real estate.

They don't need to. In fact, when combined, they provide complementary uses and can tap funding resources that make them more likely to occur -- and possibly in short order, depending on political will.

The projects, in no particular order, are:

• Expansion of the Huntington Convention Center;
• Expansion of convention center parking;
• Construction of a second convention center hotel;
• Construction of a multi-modal transportation center;
• Reroute freight trains carrying hazardous materials off lakefront tracks;
• Construction of Mall D/land bridge over the railroad tracks;
• Conversion of downtown Shoreway into a lakefront boulevard;

What's even more important is that, when built out, they improve the likelihood for more development, more resources for lakefront investment and better lakefront access to push publicly accessible land uses right to the water's edge.

One of the more thoughtful lakefront plans was the 1999 North
Coast Transportation Center plan. It replaced the Shoreway
with a landscaped boulevard that could host future develop-
ment along it. But the plan lacked a wide land bridge over
the lakefront tracks (PB/WSP).

But first, two physical impediments need to be defeated.... The Shoreway highway and the lakefront railroad tracks. Better yet -- turn them into a means to better access the downtown lakefront and to increase the value of it. The funding already exists to do these things, although they're being used for two other things for a few more years -- construction of the Gateway sports complex and First Energy Stadium. Yes, these 30-year funding mechanisms have been on the books a long time and are about to become available again.

About $8.8 million per year in Cuyahoga County revenues will no longer service Gateway bonds after 2022. And nearly $10 million per year in City of Cleveland revenues will no longer service First Energy Stadium bonds after 2028. If these revenues, including a renewal of sin taxes, are used to retire new, 30-year bonds offering 2 percent yields, they could offer, in total, $425 million for lakefront improvements.

Existing convention center funding isn't considered for this conceptual proposal. The reason is that the existing convention center bonds, which mature in 2027, are entirely supported by a 0.25-percent sales tax hike passed by the Cuyahoga County Council. It would have to be renewed by the council and probably will be. My guess is that it will be tapped to finance construction of a new Justice Center.

Best of all, the city/county already have the funding in hand to start the preliminary engineering and environmental clearances to prepare a shovel-ready plan -- that is, if they don't cast it aside for a project that fails to change the game of the lakefront. There's about $20 million left from the ill-fated idea for an open-air, cable-stayed pedestrian bridge over the lakefront tracks and Shoreway. With this money, the city and county could jointly issue a request for proposals to design a a truly game-changing, shovel-ready plan in a matter of months, if they wanted.

An overhead view of the 1999 North Coast Transportation
Center plan. It enhanced lakefront connectivity via two
pedestrian linkages - the station itself, including a green
roof, and development along East 9th Street over the
railroad tracks. But the West 3rd Street corridor, at left,
was neglected by the plan (PB/WSP).

By including a multi-modal transportation center for Amtrak, Greyhound, Greater Cleveland Regional Transit Authority (GCRTA), and other transit agencies in this mix, it offers federal funding resources. The Northeast Ohio Areawide Coordinating Agency has $71.4 million total available from the Surface Transportation Block Grant Program (STBG) through 2024 with probably more thereafter.

Also, the Federal Railroad Administration (FRA) has two grant programs that are applicable here -- Consolidated Rail Infrastructure and Safety Improvements and the Federal-State Partnership for State of Good Repair Program. Combined these had nearly $590 million available in 2018. Congress is increasing funding for these programs. Federal funds should be pursued to pay for at least half of certain public improvements to make our lakefront more attractive for private investment and more enjoyable as a public space.

Federal funding (and Ohio Department of Transportation System Conditions funding) is not proposed for converting the Shoreway into a boulevard. The reason is that the Federal Highway Administration will not support a project that reduces a highway's Level Of Service, based on the fluidity of traffic.

Since the revenues for the county and city bonds become available six years apart, the lakefront improvements could be pursued in two phases -- transportation infrastructure first, followed by multi-modal center/convention center/hotel next.

2023 Phase One capital costs (rough estimates):

Parking (1000 spaces) + supports for future hotel & housing. . . .$ 40 million
Lakefront railroad capacity enhancements for passenger rail . . .$ 15 million
Lakefront bypass for general/hazardous freight rail traffic. . . . . . $ 40 million
Convert Shoreway to downtown boulevard + East 18th ext. . . . $100 million

TOTAL PHASE ONE COSTS -------------------------------------- $195 million

2023 Phase One resources (rough estimates):

Ohio Department of Transportation Urban Paving Program . . . .$ 50 million
Ohio Department of Transportation Municipal Bridges . . . . . . . .$ 10 million
Cuyahoga County Public Works Division (license renewal). . . . $  5 million
City of Cleveland Department of Public Works . . . . . . . . . . . . . .$  5 million
County bond issue (30 yrs @ 2% ~ post-Gateway maturity). . . .$ 70 million
Federal transportation program (STBG or FRA) grants. . . . . . . $ 25 million+
Parking garage revenues (20 yrs @ 3% bond issue). . . . . . . . . $ 30 million

TOTAL PHASE ONE RESOURCES ------------------------------ $195 million

2029 Phase Two capital costs (rough estimates):

300-room hotel built atop new parking garage. . . . . . . . . . . . . $150 million
Downtown Lakefront multi-modal transportation center. . . . . . $240 million
Convention center expansion with Mall D on roof. . . . . . . . . . .$200 million

TOTAL PHASE TWO COSTS ------------------------------------- $590 million

2029 Phase Two resources (rough estimates):

Private sector investment (hotel concession) . . . . . . . . . . . . . . $150 million
Other private (naming rights, Amtrak, Greyhound, etc). . . . . . . $ 10 million
County bond issue (20 yrs @ 3% ~ new bed tax revenues) . . . $ 75 million
County bond issue (30 yrs @ 2%, post-Gateway maturity). . . . $130 million
City bond issue (30 yrs @ 2% ~ post-FE Stadium maturity). . . $225 million

TOTAL PHASE TWO RESOURCES ----------------------------- $590 million

The City of Cleveland's lakefront plan of 2004, above, and the
city's lakefront plan from 2012, below (CPC).

With the Shoreway converted from a grade-separated highway into an at-grade boulevard with intersections, several new streets will be needed to be built or historic ones restored. These can be done with tax-increment financing (TIF) as development occurs next to the boulevard.

Not included in the above calculus is the fiscal impact of lakefront development (aside from a proposed hotel). With about 26 acres opened up for lakefront development along the new lakefront boulevard, more than $100 million in TIF-supported infrastructure improvements (new/rebuilt streets, sewers, sidewalks, bike routes, etc) along and near the boulevard could be afforded. These investments should further improve pedestrian and bike access within downtown and with the lakefront. And they should lead to development of waters-edge sites which are more isolated now.

Some Norfolk Southern (NS) freight trains can be detoured off
the lakefront via NS-owned rights of way -- except for less than
600 feet of former railroad right of way next to I-77 that would
need to be reacquired and 2.4 miles of rail corridor that would,
at minimum, need to be upgraded to mainline quality (KJP).

The lakefront bypass for Norfolk Southern's general/hazardous freight rail traffic involves reactivating a once-busy rail corridor through the North Broadway neighborhood. Now owned by Norfolk Southern, the former Erie Railroad runs from near GCRTA's East 34th-Campus Rapid Transit station, below Interstate 77, above Interstate 490, along Bessemer Avenue, and reunites with Norfolk Southern's mainline at Union Avenue. Mainline tracks would have to be realigned to offer more gradual curves on connecting tracks at both ends of the former Erie right of way segment.

Lakefront railroad capacity enhancements for existing and future passenger rail services would reduce delays with remaining freight rail traffic on the lakefront and simplify the movement of shipments in and out of the Port of Cleveland. That would allow passenger rail traffic in Cleveland to grow in the near future, making a more developed downtown lakefront more accessible.

Other aspects of this plan include reworking GCRTA's Waterfront Line into a more user-friendly, connected transportation system. This includes consolidating the stations at West 3rd and East 9th into a single station within the multi-modal transportation center, offering under-same-roof pedestrian connectivity with Greyhound, Amtrak, regional bus services and to nearby buildings including City Hall, convention center and hotels while retaining proximate access to First Energy Stadium and North Coast Harbor tourist sites.

An aerial view rendering of the 2004 downtown lakefront plan
that would have de-emphasized the Shoreway by lowering it to
street level including an intersection with West 3rd Street but
descending further to below East 9th Street (CPC).

While not funded by this conceptual proposal, the initial diagram includes extending the Waterfront Line as a loop around the east side of downtown, through Cleveland State University, Playhouse Square, St. Vincent Hospital, Cuyahoga Community College, and via low-density land opened up for development. The Waterfront Line extension/Downtown Loop, which was studied in 2000 and was shown to be feasible, could be built for $118 million ($179 million today). A TIF district could be established along its route to finance light-rail construction and operation.

Land would be opened up for development along the route of the downtown rail loop by Greyhound relocating its station to the multi-modal transportation center, and by redeveloping the many surface parking lots and low-level structures along the light-rail route.

The Port Access Road underneath West 3rd Street would be preserved, surrounded by retaining walls so that development could be built above it, offering sufficient overhead and lateral clearances for high/wide loads. And it would be combined with a widened South Marginal Road under East 9th Street. Together, they would also become a multi-modal station access route for Greyhound and regional transit buses separate from stadium traffic.

I hope that this conceptual plan, which actually combines a number of recent and older plans into a single vision for Cleveland's downtown lakefront, is taken seriously. I believe this plan would help put Cleveland's lakefront on a path to be on par with downtown lakefronts in Chicago, Toronto and even Milwaukee.

END

Cleveland-area Ford plants redo to spark local economy

Two Cleveland-area auto plants that were closed earlier this
decade could be repurposed into advanced manufacturing
and warehousing operations. (FordAuthority.com)
CLICK TO ENLARGE ALL IMAGES

Redeveloping one auto plant measuring nearly 2-million-square-foot for a single manufacturer is a pretty big deal. The redevelopment of two of them for a single manufacturer is a bigger deal. The use of them for producing game-changing automotive technologies is about as big as it gets.

At least one of the game changing technologies is the plasma ignition system, also known as the sparkless ignition, according to a party involved with sales transaction.

The plants are the 1.7-million-square-foot Brook Park Engine Plant No. 2 on Snow Road and the 2.1-million-square-foot Walton Hills stamping plant on Northfield Road.

Ford's 1.7-million-square-foot Brook Park Engine Plant No. 2
(above) that closed in 2000 and Ford's Walton Hills Stamping
Plant (below) that closed in 2015 (Google).

Sparkless ignitions will replace spark plugs which have been around since the 1800s. Using plasma-based systems to ignite fuel translates to cleaner-burning, more fuel-efficient engines. Most manufacturers conservatively say sparkless ignitions improve fuel economy by 10 percent, but the potential is for savings as much as 25 or 30 percent.

However, the source could not divulge the buyer's identity. But the information available narrows the focus of who the potential buyer may be, as there are few companies who have the ability and interest to mass produce sparkless ignition systems.

The checklist for helping to identify potential buyers includes a company that:

• Is seeking to mass-produce a sparkless ignition system;
• Has significant financial resources to buy, redesign/retool and sustain two massive manufacturing plants;
• Has significant know-how to redesign/retool them for their production line(s);
• Has existing supplier/buyer relationships to ramp up volume production to fully utilize 3.8 million square feet of plant space in a reasonable period of time;
• Produces other advanced automotive products for next-generation cars that produce low/no emissions, feature self-driving-technologies, etc. since the manufacture of sparkless ignition systems likely won't require the utilization of anywhere near 3.8 million square feet of plant space.

One of the pioneers in the field of sparkless ignitions is Plasma Igniter, LLC which makes the Coaxial Cavity Resonator Ignition System (CCRIS). However, it is a small company with few resources whose small, California-based production line is limited to military applications.

Another possibility might be an existing automobile manufacturer. All automakers are seeking to bring to market cars that offer sparkless ignition systems and other advanced powertrain technologies. However, Ford is unlikely to sell two of its large plants to a competitor -- unless that automaker has an alliance like the one Ford announced with Volkswagen earlier this year. 

In December, (Volkswagen CEO Herbert) Deiss said his company may expand its U.S. production presence beyond Chattanooga, Tennessee, by building products in underutilized Ford factories with UAW workers, according to the Detroit Free Press. That would be a significant change -- foreign automakers have avoided U.S. union labor other than a past General Motors-Toyota operation in California that now is the site of Tesla's factory.

But another source who knows who bought the Ford plants would say publicly only that the buyer isn't VW "unless they bought it under another name, but that would be unlikely," the source said.

Ford's Engine Plant No. 2 in Brook Park is located next to
Cleveland Hopkins International Airport, Interstates 71/480,
Norfolk Southern, CSX as well as large distribution hubs for
UPS and FedEx (Google).

So the speculation here is that the buyer could be part of Tenneco/Federal-Mogul LLC. Federal-Mogul is a company based in the Detroit suburb of Southfield and earns more than $7 billion in revenue per year. Last year, the Chicago-based multinational corporation Tenneco purchased Federal-Mogul for $5.4 billion.

Even more interesting is that newly combined businesses are proposed to be separated in late-2019 into two independent, publicly traded companies -- one an aftermarket auto parts company called Driv and the other a powertrain technology company, to continue to be called Tenneco. The latter has sought to introduce a sparkless ignition system called Advanced Corona Ignition System (ACIS) that Federal-Mogul has been developing and wants to put into volume production.

"Following the separation, the powertrain technology company will be one of the world’s largest pure-play powertrain companies serving OE markets worldwide with engineered solutions addressing fuel economy, power output, and criteria pollution requirements for gasoline, diesel and electrified powertrains," according to a written statement issued Oct. 1, 2018 by Tenneco. "The powertrain technology company would have 2017 pro-forma revenues of $10.7 billion, serving light vehicle, commercial truck, off-highway and industrial markets."

Ford's Walton Hills plant is located next to Interstates 271/480
as well as Norfolk Southern (Google).

So not only is Federal-Mogul/Tenneco making a big move into sparkless ignition systems, it has significant business in other aspects of automotive production. Furthermore, it is undertaking a major corporate restructuring to capitalize on a rapidly changing automotive industry that, with the exception of Tesla, has weak strategies for reducing emissions, improving fuel economy, developing electric vehicles and advancing driverless-car technologies.

While its eyes may be bigger than its wallet right now, repurposing the Ford plants offer a relatively affordable way for Tenneco to put sparkless ignitions into mass production. They also offer a means to consolidate their warehousing operations for the eastern U.S. and close down more costly locations on the East Coast. But these aren't necessarily game-changing moves for Greater Cleveland's economy.

The sale of the two Ford plants looks to be close to do a done deal. On May 15, a New York City law firm on behalf of Wilmington Trust Co. filed Uniform Commercial Code Financing Statement Amendments with the Cuyahoga County Fiscal Officer for Ford's Brook Park and Walton Hills plants.

Wilmington Trust, as trustee under some Ford-issued debt instrument, is confirming its interest in the two properties. As part of the sale process and title search, Ford is establishing what encumbrances there may be to a clear title.

END

Seeds & Sprouts - Early intel on real estate projects

This is the first edition of Seeds & Sprouts - Early intelligence on Cleveland-area real estate projects. Because these projects are very early in their process of development or just a long-range plan, a lot can and probably will change their final shape, use and outcome.

Voss Industries' aging, multiple-structure plant on West 25th in
Ohio City is due to be redeveloped with housing and likely some
ground-floor restaurants/retail following its sale to a Northbrook,
IL-based firm. That's the same home city as the company
developing the Market Square mixed-use complex across
West 25th (LoopNet). CLICK IMAGES TO ENLARGE

Ohio City: Voss plant to become apartment complex

More than 250 apartments are planned in Ohio City's Market District following the purchase of Voss Industries' property, 2168 W. 25th St., two sources said. The 4.2-acre site and its multiple buildings totaling 240,000 square feet were sold May 22 for $4.775 million to a paper company formed by David Rotenberg, a principal of Bixby Bridge Capital, LLC in the Chicago suburb of Northbrook, IL, according to Ohio Secretary of State filings.

The number of proposed apartments should translate to about 400 residents, or more than the current 267 jobs at Voss Industries (it had 320 jobs in the early 2010s), which is relocating to a more modern plant in Berea. Plus, there is likely to be ground-floor restaurant/retail uses in the redeveloped factory which dates to 1936, per its deactivated LoopNet listing.

Bixby Bridge Capital invests primarily in Sun Belt real estate, with some Midwest exceptions, mostly in Chicago. They also provide equity to renovation projects, carried out in partnerships with developers. The Voss Industries site is located in an Opportunity Zone, making it eligible for a new source of equity from the OZ program. Numerous Cleveland-area projects are moving forward as a result of this new program.

The site is across West 25th from the Market Square development, where Harbor Bay Real Estate Advisors, LLC of Northbrook, IL (same hometown as Bixby Bridge Capital) expects to break ground this year on a 10-story 150,000-square-foot office building, a 7-story 267-unit apartment building (both buildings timber-framed), plus 75,000 square feet of retail and 560-space parking deck.

Just east of Market Square, Carnegie Development won a bid from the Greater Cleveland Regional Transit Authority (GCRTA) to develop 1.3 acres of land next to the Ohio City Red Line station and additional space above the tracks south of Abbey Road. To the north of the station, and despite putting the project on hold if not considering selling the property outright, Brickhaus Partners will reportedly pursue development of the mixed-use One West Twenty after all.

Clearly, the real estate market near the West Side Market and the GCRTA train station is picking up steam.

The Lumen apartment tower, under construction at Euclid
Avenue and East 17th Street, soars into Cleveland's May sky
as the Playhouse Square Foundation considers its next move
following completion next year (Ichabod The Crane/Twitter).

Playhouse Square: The Lumen, Act II

What will Playhouse Square Foundation (PHS) in downtown Cleveland do for an encore if early leasing at The Lumen apartment tower on Euclid Avenue at East 17th Street meets or exceeds expectations? The next performance could well be another residential tower for the theater district.

One place might be atop PHS's two-story Cowell & Hubbard Building on Euclid at East 13th (has the big "Playhouse Square" sign above it) which was designed to support an eight-story vertical addition. However, PHS can and reportedly does receive a tax deduction from a conservation easement of air space over this qualified historic structure. In other words, PHS gets a tax break by not developing above the Cowell & Hubbard Building in order to preserve its historic integrity. So it's in no hurry to develop it.

Instead, the site at the southeast corner of Chester Avenue and East 13th Street has PHS's interest, according to two sources. That's where PHS in 2016 strategically acquired 0.9 acres of land, currently used as a 114-space parking lot, for future development. PHS did so as it was finalizing the financing package for The Lumen.

For comparison, The Lumen sets on a 1-acre parcel, but the tower's floorplates are much smaller than the garage which occupies most of the lot. No new parking deck may be necessary for a Chester-East 13th development. In other words, there's plenty of room there to build something vertical even though it's not on a main drag as are The Lumen or Cowell & Hubbard.

One of the rationales in PHS building the 34-story, 602,000-square-foot Lumen tower was that it would put more pedestrian activity on Euclid Avenue. The activity would come from more than just those living in the 318 apartments. It would also come from shifting many visitor parking spaces from behind the theaters to across the street from them, thus encouraging more theatergoers to step out on Euclid to see and patronize the district's restaurants and shops. The Lumen's 550 parking spaces will help make that happen.

So the strategy comes from freeing up parking in the 800-space deck behind the theaters, at 1450 Chester Ave., to help support a residential tower built on the neighboring lot at Chester and East 13th. The land here is zoned for general retail and height district 6, meaning a mixed-use building as tall as 600 feet can be built without a variance.

No one yet knows how tall would it actually be. But if lots of people rent apartments in The Lumen, this second act could have a bigger, happier ending.

J-Roc Development's planned West 78th Street Community
could represent the start of housing density pushing westward
from Battery Park in to an existing industrial area (J-Roc).

Detroit-Shoreway: Lake Avenue gap-filling

As investment in redevelopment pushes west along Detroit Avenue and the lakefront toward the well-kept Edgewater neighborhood, a gap of investment remains in the middle. Specifically, the section of Lake Avenue between Detroit Avenue and Clifton Boulevard has been left out of the revitalization of the west side's lakefront. So far...

The Lake Avenue Master Plan hopes to change that. Two public meetings were scheduled to gather input for the master plan. The first was in February with the second set for April 10. But that was rescheduled for 6 p.m. May 29 at the 78th Street Studios, 1305 W. 80th St.

The Detroit-Shoreway Community Development Corp. is the plan's sponsor. Bialosky Cleveland is their consultant. Lots of ideas are being submitted for redesigning the Lake Avenue street right of way, refurbishing the railroad underpass, and establishing a land use vision for the area.

One idea is for redeveloping the 21-acre industrial triangle north of Lake toward the Norfolk Southern railroad tracks with mixed use, including some vertical housing. The land is currently zoned for general industry and semi-industry, but with height districts allowing buildings as tall as 60 feet (six stories) along Lake and 115 feet (11 stories) just south of the tracks. That height district or higher (the next levels up would permit 175 and 250 feet) would allow great views of Edgewater Park, Lake Erie and downtown Cleveland

There are already rumors that Lowe Chemical Co. wants to move from its 2.7-acre parcel at 8300 Baker Ave. Since 1984, the 51-year-old firm has owned this facility, built in 1890 with a well-kept, brick, 17,072-square-foot plant office building. It uses its rail access and is apparently seeking a new site with rail access. Next door are three largely underutilized parcels totaling 2.156 acres owned by Brian Spurgeon and partially used by his family's company, B&K Scaffolding Co.

To the eastern end of this hemmed-in industrial district is the Battery Park neighborhood, formerly the Eveready Battery Co. factory. More housing could soon be encroaching deeper on the industrial district, as J-Roc Development has acquired a 1-acre strip of land along the east side of West 78th. There, based on early conceptual massings, J-Roc envisions a long, six-story apartment building fronted by townhouses.

It's across the street from the West 78th Studios (site of the May 29 public meeting), a factory converted into artist galleries, studios and performance spaces a decade ago. It may have been what set this lakefront neighborhood on a course toward a conversion from industry to mixed uses. Then again, the spread of redevelopment west from Gordon Square might have already fated this area's 21st century purpose.

The makeup of retail on West 25th Street may continue changing
with a planned Pins bowling alley, across the street from Mitchell's
Ice Cream shop. Daniels Furniture will reportedly consolidate into
an existing store location at 2800 Superior Ave. (Google).

Ohio City: from furniture to Pins

Daniels Furniture, 1882 W. 25th St. in Ohio City, is reportedly under a purchase agreement by developer Chad Kertesz for renovation and conversion into a bowling alley named Pins, two sources say. The Ohio City neighborhood is popular with young professionals and bowling is a popular participatory sport among young people, so it's not surprising that a bowling alley is a strike for the Market District.

The decades-old store is spread among two parcels totaling 0.26 acres and two brick buildings, a 4,402-square-foot structure built in 1923 and a 13,826-square-foot structure built in 1910 with a terra cotta facade. The larger building was built with several second-floor apartments but are no longer occupied and their windows were covered with concrete blocks.

Daniels Furniture is a local chain of three stores, so it will stay in business. It reportedly plans to consolidate its two center-city stores into its location on the east edge of downtown, 2800 Superior Ave. in the Superior Arts District. Daniels Furniture other Cleveland-area location is 4569 Northfield Rd. in North Randall. A Daniels Furniture representative refused to comment.

END

Sherwin-Williams' HQ: will it be Ohio's tallest or suburban-bound?

Based on new information about Sherwin-Williams' proposed
headquarters and research facility space needs, it's possible that
the global coatings firm could build the tallest skyscraper in
Ohio, like the 1,200-foot-tall Ameritrust Center tower planned
 in 1990 (at left), soaring above the neighboring Key Tower,
Terminal Tower and 200 Public Square. Or SHW could build
a sprawling campus in the city of Cleveland or in the suburbs
(Heintges/KJP).(CLICK TO ENLARGE ALL IMAGES).

UPDATE: Sherwin-Williams isn't commenting on this story and, after it was published, an internal e-mail was sent to company managers and department heads advising them to not comment if any media asks about the company moving its headquarters/research and development activities to new facilities.

It appears the stakes couldn't be higher for the City of Cleveland as global coatings giant Sherwin-Williams Co. (SHW) prepares to issue a request for proposals from development teams seeking to build a massive new headquarters and research facility.

How high are the stakes? Perhaps as high as the 947-foot Key Tower or possibly more. That's how tall the 153-year-old company's new corporate headquarters could be, according to two sources. Or, considering that SHW's executives like being within walking distance of the company's research and development activities, it's possible that the new HQ and R&D facilities could both move to Cleveland's suburbs, taking nearly 4,000 good-paying jobs with them.

So the potential outcomes are an iconic new skyscraper for a growing multinational company in downtown Cleveland or the loss of thousands of jobs from a city trying to recover from decades of job losses.

Those are pretty monumental stakes.

It is apparent that SHW prefers to stay in downtown Cleveland. Since 2014, it has commissioned at least two concepts by an out-of-town architect for a new skyscraper on the Jacobs Lot on Public Square. It hired the world's largest civil engineering firm to flesh out the concepts into plans that were nearly ready to be released to the public in late 2015. That was when SHW executives switched course and began the process of buying Minneapolis-based rival Valspar. The debt from that $11 billion acquisition should be paid down just three years from now.

At right is the Jacobs lot, vacant since 1989, on the West Roadway
of Cleveland's Public Square. It was to be the site of the Ameritrust
Center tower until Ameritrust merged with Society Bank and then
Key Bank. Multiple sources say it was Sherwin-Williams' favored
site in 2015 for a new headquarters tower, before the company
acquired Valspar, became larger and faster growing. Weston's
five-acre Superblock of parking lots is just beyond (Google).

More information is becoming available as the world's biggest commercial real estate services firm prepares to circulate an RFP for a new HQ and R&D facility for the fast-growing coatings giant. It appears months of work by a century-old Cleveland-based law firm in drafting the RFP is nearing conclusion. The RFP is due to be released by the end of this year, multiple sources say.

Everything is on the table. SHW will listen to all offers. And SHW will get a lot of them as it seeks to build 1.6 million square feet of HQ space and R&D facilities, according to two sources.

Those space-needs figures are much higher than what was previously reported on this blog. SHW is growing so quickly and it needs to have the elbow room in its HQ to accommodate future growth for decades to come. Spread among six locations, SHW's Cleveland-area employment is rapidly approaching 5,000 workers, roughly 80 percent of which are office/lab personnel; the rest are industrial. SHW has been headquartered in the Landmark Office Building, 101 Prospect Ave., since 1930 and in the Breen Technology Center, 601 Canal Road, since 1948.

It isn't publicly known how that 1.6 million square feet will be divided among HQ and R&D. But it appears that anywhere from 200,000 to 300,000 square feet could be for R&D. SHW's existing R&D (currently in 140,000 square feet in the crowded Breen Center) space in Cleveland could nearly double in size.

SHW closed its Chicago lab and moved its employees into a former Valspar Applied Science & Technology Center, 1101 South 3rd St., near US Bank Stadium in downtown Minneapolis. That complex measures more than 170,000 square feet. Some R&D employees may stay in Minneapolis. Some may move to Cleveland when SHW's new, larger R&D facility opens.

Even if all of Minneapolis' R&D staff moves to Cleveland (which is unlikely), that leaves about 1.3 million square feet for SHW's HQ space. For comparison, the 57-story Key Tower is 1.25 million square feet. If SHW decides to stay downtown, it might stick with past plans to build its HQ tower on the Jacobs lot on the west side of Public Square. That lot measures 50,000 square feet, but could be reduced to about 40,000 square feet if Frankfort Avenue and the Public Square sidewalk are widened as part of a plan to build a new super-tall here.

The 1990-planned 63-story Ameritrust Center
tower on the Jacobs lot was to be built on a 12-
story-tall pedestal with 50,000-square-foot floor-
plates (same size as the lot itself), then narrow
significantly among the upper floors (KPF).

The base of Key Tower is only 28,000 square feet. Key, like many tall buildings, tapers inward as it soars higher. Its floorplates average 22,000 square feet. If a new SHW tower's floorplates average close to that, it could be at least 60 stories tall.

Why would SHW consider the suburbs? Again, because SHW wants its HQ and R&D to be close to each other. And since R&D activities for a coatings company involve combustible materials, albeit in small quantities, it might need to be in a location where nearby land uses aren't threatened by an accident.

But right next door to the Jacobs Lot is the largest swath of undeveloped land in the central business district -- Weston Inc.'s Superblock. Currently a five-acre surface parking lot, the Superblock has lots of room and no pending plans for at least half of it. Weston's most recent plan for the Superblock, a multi-building, multi-phase development, has faded away.

The northern half of the Superblock may be in play by Realife Real Estate Group. Through an affiliate 1350 W6 LLC, Realife purchased Stark Enterprises' headquarters, 1350 West 3rd St. Apparently Stark's planned move in a few years to a 24-story office tower in its nuCLEus development isn't soon enough for Reallife. Whatever Reallife has planned for the north half of the Superblock is of a time-sensitive nature -- so much so that Stark will temporarily move by the end of this year to a 28,000-square-foot space at 629 Euclid Avenue.

That still leaves the door wide open for the 2.6-acre southern half of the Superblock -- the portion closest to the Jacobs lot. A 300,000-square-foot R&D facility in two buildings securely separated by 30 feet, each measuring 70 feet wide by 200 feet long (offering floorplates similar to Breen's) and 11 stories tall could front Superior Avenue.

At this location, Superior is a 130-foot-wide right of way with no buildings across the street except for the corner of a hotel ballroom with windowless, concrete walls. Behind the R&D facility could be an 11-level, 3,000-space parking garage for SHW's HQ and R&D workers along Frankfort Avenue, effectively shielding whatever is ultimately built north of Frankfort from the R&D structure.

This view along Canal Road show the proximity of the Breen
Technology Center (far-right) to the Carl B. Stokes Federal
Court House Tower across the street. In the distance is
Sherwin-Williams' headquarters since 1930 -- the
Landmark Office Building (Google).

But the R&D concerns may be overblown in the first place. After all, the federal government doesn't consider SHW's existing R&D facility a structural threat. If it did, it wouldn't have built its 23-story, 430-foot-tall Carl B. Stokes Federal Court House Tower a mere 80 feet from SHW's Breen Technology Center in 2003.

Even if SHW decides against putting an R&D facility in Cleveland's central business district, other sites at the edges of downtown could be in play. One that has been discussed among real estate insiders is Scranton Peninsula. Developers of the 22-acre Thunderbird site have courted SHW, a source said.

There have been references shared in past articles in this blog that SHW's corporate charter requires the company to keep its principal executive offices within one mile of where the company was founded in 1866 -- basically where the Breen Technology Center is today. But a keyword search of corporate governance documents reveals no such requirement.

SHW's articles of incorporation do require "the place where this Company shall be located and its principal business shall be transacted is the City of Cleveland in the County of Cuyahoga and State of Ohio." It appears that amending the articles requires a vote by two-thirds of the company's shareholders.

Outlined in yellow, Sherwin-Williams' 80-acre Warrensville
Heights World Automotive Headquarters and technical center
is only partially developed, offering a potential suburban site
for the corporation's principal executive offices and research
facilities. But it would limit the growth of the Automotive
Finishes Group or force it to relocate as well (Google).

In the end, SHW's consideration of Cleveland's suburbs for its HQ and R&D spaces may have more in common with Swagelok's recent facility search. In 2018, Solon-based Swagelok Co. issued an RFP for a new corporate headquarters and innovation center. While company officials claimed that it would consider building a new home anywhere, few expected Swagelok to leave the city where it was founded in 1965. Sure enough, Swagelok decided to stay put and build a new Solon facility for 400 employees now, and possibly growing to 1,000 in the near future.

SHW's roots go 100 years deeper into Cleveland's soil. To pull them out would be a tremendous blow to the city and to SHW as well. And it wouldn't merely be a public relations stain on SHW.

Executives at Eaton Corp., which relocated its headquarters and 700 jobs from downtown Cleveland to suburban Highland Hills in 2013, are reportedly regretting their move. The reason is Eaton is having a difficult time luring young talent to their sprawling, disconnected office campus. Companies like PNC, NRP Group, BrightEdge, New York Life Insurance and more have moved offices downtown, while others like CrossCountry plans to move its HQ downtown and Progressive Insurance is considering growing its downtown presence.

A departure of SHW to the suburbs may not have a strong chance of occurring, but there is a chance. And it's one that the city and downtown Cleveland cannot afford. On the flipside of that coin is a skyscraper that could become Ohio's tallest and, when combined with an R&D facility, would help fill downtown's largest parking crater with 4,000 jobs and urban vibrancy.

The stakes are monumental.

END

Mid-rise housing on Detroit Ave heads west

This seven-story apartment building is proposed to be built at
4005 Detroit Ave. by Adam Hayoun in Cleveland's Ohio City
neighborhood (LDA).(CLICK IMAGES TO ENLARGE)

Housing continues to make its inexorable push westward along Detroit Avenue in Cleveland's Ohio City neighborhood. The latest project is 4005 Detroit, a seven-story apartment building with ground-floor retail. Plans for the project were recently submitted to the city for approval.

Proposing the 36-unit residential development is Hayoun Corp. owner Adam Hayoun whose Ohio City resume includes notable historic renovations like the Belden Seymour House, 3805 Franklin Blvd., and the Masters House, 3811 Franklin Blvd. Hayoun is also the principal at ABC Renovation LLC.

In addition to 11 one-bedroom units and 25 two-bedroom units, the proposed apartment building would feature a leasable, 1,318-square-foot retail space and a 605-square-foot lobby fronting Detroit Avenue. It would also have 44 parking spaces on two levels, accessible from Wheat Court, an alley behind the property.

The proposed building is designed to have small frontage on
Detroit Avenue with the structure widening to the south along
the Wheat Court alley (LDA).

Under the corporate name 4007 Detroit, LLC, Hayoun bought the two-parcel, 0.258-acre property for $155,000 in 2016 from David Steinberg, doing business as 4005 Detroit LLC, county records show. The property is located at the western edge of an Opportunity Zone, making it eligible for OZ program equity. A decaying, vacant, 5,602-square-foot warehouse built in 1920 on the site is due to be demolished.

The site is located at the only curve in Detroit Avenue between West 25th and the Cudell neighborhood. It is next to offices for Progressive Urban Real Estate, Blain's Folding Service and Cleveland Bagel.

4005 Detroit Avenue would tower over its one-story neighbors,
but probably not for long. Developers continue to acquire more
properties along the Detroit corridor (LDA).

And while, many real estate insiders have speculated that the spread of high-density housing on Detroit Avenue overlooking Whiskey Island would ultimately force out the growing manufacturing presence of the Kowalski Heat Treating Co., this project shows it would leapfrog it instead. Ironically, 4005 Detroit designer LDA Architects Inc. planned the six-story The Edge apartment building just east of Kowalski.

The project fits in with the citywide 2020 development masterplan's proposed use for this site, which is mixed use/residential. The zoning code allows a 60-foot-tall building to be built here; this building would be 81 feet tall. The gross floor area and minimum setbacks also would require variances from the Board of Zoning Appeals. The building's maximum gross floor area of 49,785 square feet exceeds the 11,237 square feet allowed under the zoning code.

This is the rear of the 4005 and 4007 Detroit Avenue properties
along the Wheat Court alley, as seen in 2016 (Google).

Also, the minimum rear yard setback along the Wheat Court alley is 32 feet, six inches. As proposed, the building has zero setback for the garage and eight feet for the residential part of the structure, according to documents submitted by Hayoun and LDA Architects Inc. to the City Planning Commission.

END

Gordon Park lakefront housing - the sequel

Conceptual renderings show the Shoreline Phase II at East 55th
Street and Interstate 90 would offer views of Lake Erie from
seven sides of its northern frontage. But the building would be
too short to see the downtown Cleveland skyline over its five-
story Phase I next-door neighbor to the west (Vocon).
(CLICK TO ENLARGE IMAGES)

The Gordon Park area on the East Side isn't to be confused with the Gordon Square area on the West Side. Gordon Square is a populous, fast-growing, historic neighborhood. But the lakefront lands along and near Gordon Park could soon add "fast-growing" to its descriptions too, as first reported in a February NEOtrans article.

Now, there's more happening -- a 212-unit, five-story apartment building called The Shoreline Phase II is proposed to be built at 5455 North Marginal Road, according to documents filed with the Cleveland Planning Commission. The four-acre site is on the northwest quadrant of the Interstate 90-East 55th Street interchange. It is located next to the 167-unit The Shoreline apartment building, currently the only housing in the Gordon Park area.

The four-acre patch of grass outlined in red shows the proposed
location of an investor partnership's planned, 212-unit apart-
ment building, just east of downtown Cleveland (Vocon).

The Shoreline Phase II represents an investment of approximately $30 million by a group of investors led by the property's owner Quay 55 East Limited Partnership. An exact investment amount isn't yet known. Mark Coffin, whose name is listed prominently on public records associated with the property and the partnership, has yet to return a phone call seeking more information.

Coffin's firm developed The Shoreline on six acres next door in 2002, back when it was called Quay 55 and had only 138 apartments. This five-story apartment building was originally the four-story Nicholson Terminal building, once a warehouse that received new cars from Detroit by ship. But Coffin defaulted on a $20 million U.S. Department of Housing and Urban Development-guaranteed loan.

The five-story Shoreline Phase II western face, as it would
appear to the existing residents of The Shoreline Phase I,
from across an expanded parking lot (Vocon).

The property went through several owners until 2017 when Landmark Lakeshore LLC bought Quay 55, renamed it The Shoreline, and got approval to add 29 apartments to the property by converting indoor parking spaces to housing. That 2018 development represented a new spark of developer interest in the area, fueled by the quick leasing of the added units.

The partnership's 144,016-square-foot second phase includes 160 one-bedroom apartments, 32 studio apartments, and 20 two-bedroom apartments, as well as a new pool and poolhouse to be shared with The Shoreline Phase I. Phase II will add 322 outdoor surface parking spaces and 95 indoor spaces. In Phase I are 63 indoor and 67 outdoor parking spaces. Total parking is proposed to be 561 spaces, planning documents show.

Site plan and parking plan for The Shoreline Phase II shows
the location of a total of 561 existing and planned parking
spaces, as well as the location of the new pool and a new
poolhouse for residents of both phases (Vocon).

It is the second large housing development to be planned within walking distance of Gordon Park this year.

On Feb. 15, B.R. Knez Construction, Inc., DBA Knez Homes, presented conceptual plans to the City Planning Commission to get its feedback before proceeding with more detailed designs for a mixed-use development.

Commission members urged Bo Knez, president and CEO of Knez Homes, to reduce the density of his proposed plan and improve connectivity with "nearby amenities," according to planning staff feedback. The site is at 5700 South Marginal Rd. with two parcels of city-owned land totaling 3.9 acres. In urban development, that is a large canvas.

Knez's concept for a mixed-use development at Interstate 90
and East 55th were not warmly received by the City Planning
Commission which urged Knez to reduce the proposed density
and improve connectivity with nearby amenities (RSA).

On it, Knez says he plans 50-60 townhomes, 90-100 apartments and 8,000 square feet of ground-floor commercial space on the Shoreway side for retail, restaurants or offices. Townhouses would be above the commercial spaces, he said in a phone interview.

Knez, who is a very active developer in Greater Cleveland and especially in the urban core, was born in Slovenia and raised in the East 55th-St. Clair Avenue neighborhood. He said he has wanted to develop near his old neighborhood for some time but the market wasn't right. Now, the market for housing in the Gordon Park area is obviously improving.

END