Sherwin-Williams, Stark, Realife & the fate of an historic Superblock survivor

The Realife Building, 1350 W. 3rd St., at the bottom-center of
this view, stands alone at the edge of the Superblock of parking
lots where Sherwin-Williams proposes to build its new head-
quarters. With a new, land-hungry neighbor and a foreclosure
case pending, the fate of 1350 W. 3rd is in doubt (Google).
CLICK IMAGES TO ENLARGE THEM 

UPDATED MARCH 12, 2020

Downtown Cleveland's largest parking crater, the so-called "Superblock" where Sherwin-Williams (SHW) plans to build its new headquarters, has a sole survivor among its once vast building stock.

That monolith is set off to one corner of the Superblock, named because its sea of parking is actually spread among two blocks, separated by the one-way alley Frankfort Ave. The surviving building is the former Stark Enterprises headquarters that now belongs to 1350 W6 LLC, an affiliate of Realife Real Estate Group.

And the building may not be long for this world. There are two reasons why the building at 1350 W. 3rd St. is endangered. Ultimately, both reasons are apparently attributable to Realife which bought the building in the final days of 2018.

One is that Realife appears to want to sell the building, possibly to be associated in some way with SHW's HQ. The other reason is that Realife allegedly hasn't been making mortgage payments and may be forced to sell the building at a foreclosure auction.

According to a source, Realife reportedly had a potential tenant recently for 1350 W. 3rd. An Austin, Texas-based eCommerce firm named Zilker Technology was apparently intending on signing a lease here for its first Midwest office. But on or about Jan. 20, Zilker walked away due to some unfavorable stipulations in the lease.

The building at 1350 W. 3rd in 1964 was a soot-covered but
architecturally ornate, Victorian-era structure that served some
of the many printing companies in the neighborhood. Today,
the modernized structure awaits its fate amid a sea of parking
in the Warehouse District (CPL/Google).

"The language allowed for the lease to be terminated at any point, a result of developing situations with a future neighbor,” the source said. The future neighbor he referred to was SHW's HQ.

Turning back the clock to Dec. 24, 2018, affiliates of Stark Enterprises and Realife entered into a mortgage in which Stark lent $1,650,000 to Realife and awarded a deed to the property at 1350 W. 3rd. Per the mortgage, Realife must make regular payments to Stark of $11,052.74 and get Stark's permission for any improvements, demolitions or any other changes made to the property.

According to Stark, Realife has failed to make payments on the mortgage when due. On Jan. 23, Stark Enterprises filed a complaint on a cognovit promissory note against affiliates of Realife Real Estate Group. A cognovit promissory note favors the lender. It was agreed to by Stark and Realife as part of the mortgage, according to a copy of the mortgage on file with Cuyahoga County.

Realife representatives acknowledged the accuracy of the cognovit complaint and didn't wish to appeal it, according to the Cuyahoga County Common Pleas Court docket. On Jan. 27, Common Pleas Judge Joseph D. Russo rendered a cognovit judgment of $1,671,782.25 plus 14 percent interest against Realife and associates.

A cognovit refers to a judgment entered after a written confession by the defendant without the expense of ordinary legal proceedings.

Despite Realife's apparent lack of making regular payments on the Stark mortgage, the company has acquired $33 million worth of Greater Cleveland properties since it took title to 1350 W. 3rd, according to a Feb. 2 article in Crain's Cleveland Business. And since 2015, Realife has acquired at least 55 properties  throughout Greater Cleveland. It has received complaints that it has not maintained some of those properties.

First page of Stark Enterprises' complaint for
foreclosure against Realife and affiliates filed last
week (Cuyahoga County Common Pleas Court).

Stark on Feb. 6 filed a complaint for foreclosure against Realife et al, requesting that the Common Pleas Court preserve the property at 1350 W. 3rd, that Stark's mortgage be the first lien on the property and that the property be sold by the county with Stark paid by proceeds from the sale. Judge Cassandra Collier-Williams is overseeing the case.

Angelo Russo, attorney for Realife principal Yaron Kandelker, an Israeli citizen, did not return a phone message seeking comment prior to publication of this article.

The property in dispute is at the northeast corner of the Superblock, at the southwest corner of West 3rd Street and St. Clair Avenue. Despite its 1960s-era cladding in an attempt to modernize it, the building is 132 years old. It measures five stories and 18,000 square feet.

It's all that's left of a diverse collection of 19th-century and early 20th-century ornate warehouses, offices and other commercial structures that covered the nearly 6 acres of Superblock. Clearance of the Superblock, bounded by West 3rd and 6th streets, plus St. Clair and Superior avenues, began in the 1950s as highways began to intrude into the urban core.

The Superblock saw its last demolition in 2011 at the opposite corner, at West 6th and Superior. That's when a parking deck wrapped around a check-cashing business was knocked down. Few knew that behind the modernized facade of the check-cashing business was a small brick structure that dated to the 1830s. It was used as a factory for everything from cigars to eyeglasses, but served as a restaurant for most of the 20th century.

Looking across the sea of parking in the Jacobs (right) and
Weston (center) lots is 1350 W. 3rd. The Superblock is the
two blocks of parking in the center, divided by Frankfort
Avenue. Sherwin-Williams proposes to build it global
headquarters on these parking lots (Google).

As for the 1350 W. 3rd building, the Cleveland City Directory shows its original address was 182-184 Seneca Street prior to the city changing north-south street names to numbered streets based on their distance from Public Square. It was called The Gilman Building, according to building preservation consultant Steve McQuillin.

The Gilman Building was designed by anarchist/socialist architect John Edelman, mentor to the famous architect Louis Sullivan, who credited Edelman with the concept of “form follows function,” McQuillin said.

Built in 1882 for the A.S. Gilman Printing Co., it later had tenants like the Ingraham Brush Works and the tobacco firm G.H. Mack & Co. It also had a billiards hall on the ground floor, according to Sanborn Fire Insurance maps of the late 1800s. More printing companies filled the building into the 1900s in a neighborhood once filled with printing, bindings and publishing companies.

Neighbors included the early addresses of the Cleveland Plain Dealer (southeast corner of Bank [West 6th] Street and Frankfort) and the Cleveland Press (on Seneca [West 3rd] just north of the Lake Shore & Michigan Southern Railway's offices that were at the northwest corner of Seneca and St. Clair.

Next door to 1350 W. 3rd on the St. Clair side was a dilapidated livery stable for storing wagons and re-shoeing horses. To the south, along Seneca/West 3rd was the Northern Ohio Fair Building to which the A.S. Gilman Printing Co. relocated. Gilman's most notable effort was its publishing of the weekly American Sportsman.

END

nuCLEus still lurks among many downtown projects

A rooftop cafe is just one of the amenities proposed by Stark
Enterprises and J-Dek Ltd. as part of their nuCLEus develop-
ment in downtown Cleveland. But the project has been on the
drawing boards for nearly six years while other projects were
proposed and built. Yet there is still progress to report when it
comes to nuCLEus (Stark). CLICK IMAGES TO ENLARGE

In two years, construction may be underway in downtown Cleveland for as many as a half-dozen towers. And that doesn't count all that are in pre-development. If you did, there would be at least 13 towers under consideration.

Starting this summer, construction is due to start on the City Club Apartments, followed by the new Sherwin-Williams headquarters, a probable Justice Center Courthouse tower and as many as three more towers that have yet to be announced but are in pre-development with significant financial backing.

And that doesn't count major renovation projects that could also be occurring in the next year or two like the 21-story Union Trust Building to be renovated as The Centennial, the 22-story 55 Public Square, 16-story Rockefeller Building and 11-story Baker Building. All are subject to pending renovations and/or possible sales.

Lurking in the shadows of the half-dozen new-construction, potentially imminent towers are a pair of proposed buildings. Many people aren't talking about these two proposed 24-story towers anymore. They are the towers in Stark Enterprises' and J-Dek Ltd.'s nuCLEus development.

One reason why people aren't talking about nuCLEus now is because people apparently have grown tired of talking about it in the future tense. It was on everyone's hot-topic list 5-6 years ago and was considered for multiple public financing ideas. Each of those ideas ultimately fizzled.

When nuCLEus was announced in October 2014, downtown's
development agenda wasn't so towering or crowded as it is
now. Four buildings of 11 stories or more were built since
with another dozen or so towers planned (KJP/w28th).  

During that time other projects came to the fore, including Stark's own 29-story Beacon tower it finished last year, Playhouse Square's 34-story Lumen that will be completed this year and all of the other planned towers mentioned above.

But nuCLEus shouldn't be written off despite its many fits and starts.

Stark Enterprises created new intrigue about nuCLEus Feb. 7 with a Twitter exchange instigated by Sherwin-Williams' headquarters news. Stark Enterprises congratulated Cleveland's 154-year-old corporate citizen and its hometown.

"Great news! Congrats to @SherwinWilliams and @CityofCleveland. The future is looking very bright in CLE! #ItsAllHappeningHere" Stark's official Twitter account tweeted.

In response, self-described Cleveland fanatic Mitch Rackovan tweeted to Stark "Your turn! #nuCLEus" which netted a cryptic reply from Stark Enterprises: "#StayTuned."

Maybe we should be talking more about nuCLEus. Or, at least, maybe we shouldn't stop talking about this $354 million development on East 4th Street between Prospect Avenue and Huron Road.

Stark Enterprises' cryptic Twitter
message "#StayTuned" regarding
nuCLEus combined with progress
on a large new tax credit program
lends hope that that $354 million
real estate development still has
a verifiable pulse (Twitter).

That project, like the new Sherwin-Williams HQ or the City Club apartments, would do their civic duty by obliterating visual blights on our downtown cityscape -- those hated, lifeless surface parking lots.

NuCLEus still has life because, among all the public financing schemes that Stark has floated, one of those schemes could be a couple of months away from becoming a reality. And it could help spark real estate developments in big and small cities throughout the state.

The Transformational Mixed-Use Development (TMUD) tax credit, or Substitute Senate Bill 39, is designed to encourage insurance companies to invest in Ohio real estate megaprojects. It would do so by refunding to insurance companies up to 10 percent of their investments in TMUDs.

Backers say the credits are justified in this state which has skyscraper construction costs nearly as high as those of New York City and Chicago but lacks their high rents to offset those costs. More on that later.

Sub. SB39 is pending before the Ohio House of Representatives' Economic and Workforce Development Committee chaired by State Rep. Paul Zeltwanger. His legislative aide, Josh Ferdelman, said that the bill is likely to move forward following recent agreements among committee members. Those agreements resulted in significant changes to the bill that were accepted at a committee hearing Feb. 5.

Leasing signs for nuCLEus went up on Prospect Avenue at
East 4th Street -- in October 2014. More than five years later,
no dirt has yet been turned for the ambitious, mixed-use
real estate development (UrbanOhio). 

The committee has scheduled another hearing Feb. 12, to accept possible amendments, testimony and comments by interested persons. It will be the committee's seventh hearing on the TMUD bill. Zeltwanger probably won't ask the committee to refer it to the full House for a vote next week because there are too many changes to the bill to move it that fast.

But it is possible the bill may be referred to the full House for a vote the week after. The full House likely won't vote on the TMUD bill until after the March 17 primary election, said a source who spoke off the record.

The substitute bill would authorize up to $100 million in credits in each state fiscal year ending June 30 in 2020, 2021 and 2022. It remains to be seen if the bill moves fast enough to authorize and implement the 2020 round of tax credits. Having three rounds of awards instead of just two would increase the chances for Stark and others to win a TMUD credit. The bill would allow credits of up to $40 million per application.

But time is of the essence. If the House passes this substitute bill, it will be significantly different than the one the Ohio Senate passed last year 32-1. Yet the source said there would be a conference committee only if the Senate rejects the new House amendments.

Since the House leadership is already working with the bill's lead sponsor Senator Kirk Schuring (R-29, Canton), there apparently is little chance of a conference committee, the source added. That will save weeks or possibly months of time.

This is a simplified breakdown of the capital stack for
nuCLEus, as presented to the City of Cleveland in mid-
2019 and that appeared in an attachment to a proposed
ordinance for awarding a $12 million loan for nuCLEus.
The loan wasn't awarded. The breakdown doesn't show
 who contributed the equity nor does it show in what
amounts (City of Cleveland).

The legislation can be effective by June 30 if it goes to Gov. Mike DeWine for his signature before April 1 and he promptly signs it, according to the source. But the Ohio Tax Credit Authority, which would administer the tax credits per the substitute bill, still has to issue application rules before inviting requests for the credits.

So the clock is ticking if Stark and other developers hope to tap into the first $100 million worth of credits before the end of the current fiscal year.

Ezra Stark, Chief Operating Officer of Stark Enterprises, did not wish to comment on the pending bill or if his firm supports the significantly amended version now pending in the committee.

Rep. Mike Skindell (D-13, Lakewood) sought the addition of the $100 million cap on annual credit awards and a June 30, 2022 termination date of the TMUD tax credit program. He noted that, without the cap, the TMUD credits could incur as much as a $500 million hit to the state's budget per year.

And without the termination date, the TMUD credits would have no sunset to them or lack the possibility of review if the General Assembly wishes to continue the program beyond 2022 in some form. Skindell is a member of the Economic and Workforce Development Committee.

This rendering of nuCLEus shows the layout and location of
the proposed development, looking southward (Stark).

"We (at the state level) have $9 billion worth of tax credit incentives available right now," Skindell said. "There's no review or sunset to them and no accountability as to whether they're doing what they're supposed to being doing."

In response to questions by House committee members after his testimony Oct. 23, 2019 in support of the TMUD bill, Millennia Companies CEO Frank Sinito rattled off a list of public incentives his firm is receiving or expects to receive to help facilitate development of The Centennial in downtown Cleveland. Those include historic tax credits, Opportunity Zone financing and others. Millennia also may be seeking low-income housing tax credits to provide workforce housing.

One might ask is: how are other Cleveland skyscrapers getting built without the TMUD credit?

Stark put the Beacon apartments on top of an existing 524-space parking garage that was built in 2005 for $25 million but was bought by a partnership of Stark and investor Reuven Dessler in a post-recession, post-bankruptcy sale for $8 million, saving the partnership more than $17 million from having to build its own parking deck for Beacon.

Playhouse Square tried getting for-profit real estate developers to build The Lumen. None would touch it due to Cleveland's big-city construction costs and its mid-market rents. So the nonprofit Playhouse Square Foundation, which has real estate development experience in renovating and augmenting theaters, decided to take on the project itself, saving many millions of dollars.

Sherwin-Williams will build a new office tower for itself. It's not going to be leasing it out to anyone. And sources say the global coatings firm is probably going to limit the building's height to save construction costs. Building higher than 30 stories means having to dig caissons about 200 feet down to bedrock to support a larger tower's weight.

More than half of nuCLEus' proposed office tower space is
already spoken for. And at Stark's Beacon apartment tower
a block north of the nuCLEus site, 85 percent of its apart-
ments were leased only three months after its official
grand opening (Stark).

Meanwhile, the City Club Apartments, like Beacon, will share an existing parking garage that's filled with office workers' cars during the day but is mostly empty at night. City Club Apartments is proposed to be built at 720 Euclid Ave.

Additionally, the City Club Apartments tower is proposed to have lower ceilings to save on construction costs. The tower might max out at less than 230 feet although decorative elements on the roof may push it above that.

For NuCLEus, Stark and J-Dek propose to build its own parking garage with an estimated 1,300 parking spaces, costing potentially $40 million or more based on similar garages elsewhere. Built below the garages would be 80,000 square feet of ground-floor retail, restaurants and entertainment for the Gateway District.

Atop the garages, Stark and J-Dek propose two 16-story towers -- one with 400,000 square feet of offices and the other tower with 250 apartments. Nine floors of the office tower are reserved for announced tenants like Benesch Friedlander Coplan & Aronoff LLP and Stark's own offices.

While it's way too early to know how successful nuCLEus' apartment component might be, 50 percent of Stark's new Beacon tower is leased, commanding rents of $2 to $4 per square foot. Its grand opening was just three months ago.

END

University Circle-area housing finds new Heights

Integrity Realty Group plans to develop a 58-unit boarding
house complex across Euclid Heights Boulevard from the
hotly contested Top of the Hill project (Cleveland Heights).
CLICK IMAGES TO ENLARGE THEM

Last week, this blog reported on a $72 million dormitory project by Case Western Reserve University (CWRU) to add 600 beds to the South Residential Village at Murray Hill and Adelbert roads. This week, a private developer joined the party with a 58-unit boarding house project just up the hill.

Integrity Realty Group LLC's plans for property it owns in Cleveland Heights, at 2345-2361 Euclid Heights Boulevard, were revealed when the 12-year-old Beachwood-based firm applied for a conditional use permit from the city. The permit is requested because the site plan proposes 93 parking space whereas 111 are required by building code.

The developer is also seeking five variances to permit several new buildings to be built in closer proximity to each other than the building code allows. Integrity Realty is scheduled to appear before Cleveland Heights' Board of Zoning Appeals at its next meeting on Feb. 18.

Dan Siegel, founder of Integrity Realty, said that his firm's proposed development doesn't need that much parking because it would legally be a boarding house -- rooms are larger than those in a dorm but smaller than an apartment unit. If the new buildings were considered as a dormitory or apartment building, the proposed development would exceed the minimum required parking spaces.

Integrity Realty's proposed boarding house will be marketed to students and interns -- a growing population in and near University Circle. The site is located within easy walking and biking distance of much of the CWRU campus, several major hospitals, Cedar-Fairmount shops and the development site is served by frequent bus services.

"The project is a small luxury student housing development," Siegel said. "That will serve the many students at Case and the hospitals. It is very well located for that purpose."

Site plan for Integrity Realty's proposed boarding house
development at the intersection of Overlook Road and
Euclid Heights Boulevard (Cleveland Heights).

It is also across the street from the site of the Top of the Hill development that will rise on land owned by the City of Cleveland Heights. After more than 40 public meetings, some of them contentious, the $100 million project by Flaherty and Collins Properties is due to break ground this spring. It will feature 275 apartments, 15,000 square feet of ground-floor commercial space and 550 parking spaces.

Siegel said he doesn't expect his proposed development will get the same level of public scrutiny as Top of the Hill did.

"My project is a much lower density project than the Top of the Hill," he said. "Our design will mesh with the neighboring buildings so the impact is not close to Top of the Hill. My development will look similar to the other existing condo developments on its block."

He added that, since he owns the land on which he intends to build, there is less community involvement compared to building on city-owned property as was the case with Top of the Hill. There is also a complex legal agreement and extensive public financing with Flaherty and Collins that required community input.

Through an affiliate Overlook Park Partners LLC in April 2019, Integrity Realty acquired not only 2.44 acres of land but several existing structures on the site for $2.46 million, according to county records. The existing structures include a 45-unit apartment building, 5,200-square-foot house and a 5,140-square-foot carriage house.

Integrity Realty plans to renovate the houses with three residential units in each, then build three new boarding houses on the site totaling 88,829 square feet of new construction. The total amount of square footage will be less than the maximum allowed by the city's zoning code. That site's multi-family zoning allows a high-rise apartment building to be built.

No dollar amount for the development's projected cost was provided. Based on the cost of other recent, similarly sized developments, Integrity Realty's investment in the community could be between $10 million and $20 million.

END

An analysis of Sherwin-Williams' HQ news: it's just the beginning

Sherwin-Williams will likely build more structures in down-
town Cleveland as part of its new headquarters than they've
let on in today's big announcement (KJP file).
CLICK IMAGES TO ENLARGE THEM

Up in the 90-year-old Landmark Building, where Sherwin-Williams' (SHW) headquarters has been growing and expanding for the duration of that Art Deco beauty's lifetime, the employees' response to The Big News appeared to be less than big.

"There seems to be little to no reaction here today," said an employee in SHW's Performance Coatings Group (PCG). "I can tell you one thing, no one is throwing a party or jumping for joy."

And that seems to be the same reaction to SHW's HQ announcement today across social media or among the urbanistas on the forum at UrbanOhio. It was also my reaction -- at first.

To some, SHW's proposal appears timid. To me, it is intentionally incomplete.

I'm overjoyed that downtown's Cleveland largest parking crater, embarrassingly located on our central square, is publicly marked for death. The nearly 7 acres of parking lots owned by the Jacobs and Weston groups was privately threatened, or at least part of it was, when SHW last considered a new headquarters in 2014-15. That was before it made the bold move to acquire Minneapolis-based rival Valspar.

Sherwin-Williams official maps showing sites for new
HQ and R&D facilities, as well as their current
facilities in downtown Cleveland (SHW).

SHW put its HQ plans on hold as the 154-year-old paint company absorbed Valspar's employees into its ranks and, just as importantly, into its facilities. It couldn't add them into its already full John G. Breen Technology Center on Canal Road. Nor could it add them into the 900,000-square-foot (SF) Landmark Building of which SHW occupies nearly 90 percent. The rest is leased to other tenants.

SHW in 2015 had already overflowed its Landmark cup into the neighboring Skylight Office Tower, leasing 52,000 SF there. So SHW leased a flex office space on Hinckley Industrial Parkway in Cleveland, renovating part of it for at least $740,000 according to public records. There, it put up to 250 employees, some of them Valspar staff relocated from Minneapolis.

At first it seemed like SHW's HQ plan was responding to its spatial needs pre-Valspar. Back then, SHW pursued a new HQ when it outgrew Landmark and expanded into Skylight. Together, those spaces total about 950,000 SF.

As of today, SHW's proposed new HQ is an announced 1 million square feet. It will not accommodate Hinckley. It will not accommodate Valspar staff left in Minneapolis for lack of space here. According to a company e-mail sent this morning, SHW will relocate some of its office staff from Breen and the automotive/PCG facilities in Warrensville Heights into the new HQ.

An unofficial conceptual massing of what SHW's new HQ,
shown in yellow, could look like when built on the Jacobs
and Weston lots next to Public Square (Geowizical).

Then there's the R&D facility. Sure I hate to see several hundred R&D jobs leave downtown Cleveland for the 100-acre former Veterans Administration site in Brecksville to be developed by the DiGeronimo Companies as Valor Acres. But the city of Cleveland is being more than compensated. It will enjoy the addition of thousands of construction jobs as well as SHW's projected increase of 400 permanent office jobs resulting from near-future corporate growth.

Some of you were worried several months ago that SHW was bound for Dallas or Atlanta. Or we could have been in Greater Cincinnati's shoes today. Ask Macy's HQ employees who are being relocated to New York City or AK Steel's 1,000+ HQ employees who will be moved to Cleveland as a result of AK's acquisition by Cleveland Cliffs. Greater Cleveland has been enjoying some HQ wins lately. More may be coming, including from Brecksville.

The loss of the R&D jobs are not Cleveland's fault. Cleveland and the State of Ohio offered to clean up SHW's favored R&D site on Scranton Peninsula. But they couldn't force the property owner to be responsive to SHW's overtures. Similarly, SHW couldn't be forced to locate the R&D on a more complicated and expensive site on the other side of the Cuyahoga River, below Tower City Center.

"While it is far too early in the process to comment on the project specifics, we look forward to sharing our enhanced vision for Valor Acres and the surrounding area when it is appropriate to do so," said DiGeronimo Companies spokesperson Stacey Kirth.

So the only true loser in this whole thing is Warrensville Heights. It will lose several hundreds well-paying jobs from SHW's 100-acre, 389,000-SF former Sohio/BP research facility. Much of that site is still undeveloped 20 years after SHW acquired it from BP. SHW is one of Warrensville Heights' biggest and best employers.

SHW's 100-acre Warrensville Heights property is outlined in
yellow in this satellite view. Most of the site is undeveloped
as it is covered here with dark-green vegetation (Google).

With all of these changes, it becomes clear that the amount of new HQ+R&D facilities, totaling 1.5 million square feet, is less than what has been discussed privately over the past half-year. The number that's been discussed was 1.8 million SF. But the HQ number is smaller at 1 million SF announced vs. 1.45 million SF previously discussed. And the R&D number is larger, at 500,000 SF announced vs 350,000 SF previously discussed.

So what about the possibility that SHW is not done?

A few days ago, a source said their company is under contract with SHW as part of its HQ project for the next five years. Consider that it should take about a year to plan and design the new HQ and another two years to build it.

The type of work performed by this source's company is on the front-end of a real estate development. Their contract term strongly suggests that there are more facilities coming. There is more to this HQ project than what SHW has let on so far.

Large areas of the Weston lots near Public Square were
cordoned off last November as geotechnical crews on
behalf of SHW gathered soil samples from deep below
the pavement. Some of the crews are visible in the back-
ground, in front of the historic Warehouse District build-
ings dominated by the Rockefeller Building at left (KJP).

Another source said it is likely that SHW may yet consolidate Hinckley and/or Minneapolis employees to the new HQ, requiring additional construction. But it will be three years before that happens. If SHW announced relocations now, it could lose a lot of employees in the next few years because they have the chance to look for another job close to home. It would be difficult for SHW to fill those openings prior to relocation.

Large companies would rather get their project moving first, securing all the government approvals and incentives for the site, add more facilities for "future growth" and then quietly shift employees around as needed.

Everyone should pay closer attention to SHW's site plans once they are released for the new HQ. Look to see if they will feature a greenspace or two set aside for future development. Or, possibly, portions of parking decks could be proposed atop concrete pads or caissons so that office structures can be added above the parking decks to accommodate future expansion.

Furthermore, there is likely to be some significant spin-off development resulting from SHW's new HQ downtown and R&D in Brecksville. This project isn't ending with this announcement. It's just beginning.

So if you're not throwing a party yet in your office at one of SHW's half-dozen local offices in Northeast Ohio, or at Cleveland City Hall, or at a real estate-related company in the area, that's understandable. But I would keep an eye out for where to buy the cake, ice cream and party poppers in the coming months and years.

END

SHW company e-mail sent to employees regarding staffing etc.

Sherwin-Williams official maps showing sites for new HQ and

R&D facilities, as well as their current facilities in downtown

Cleveland (Iryna Tkachenko). CLICK IMAGE TO ENLARGE

Email sent to all corporate employees at about 8 a.m. Feb. 6. It was not edited in any way...

Dear Fellow Employees,

I am writing to share an exciting update with you regarding the planned locations for our new global headquarters and new R&D center.

After many months exploring multiple sites nationally, I’m pleased to share with you that we are finalizing plans to build a new global headquarters in downtown Cleveland and a new R&D center in the Cleveland suburb of Brecksville. The plans are contingent upon completion of standard due diligence, approvals of incentives and other matters at state, county and city levels, and resolution of business and legal matters that accompany such major real estate investment projects.

The planned new global headquarters would be in downtown Cleveland just west of Public Square between Saint Clair Avenue and Superior Avenue and is expected to be approximately 1,000,000 square-feet in size. The planned new R&D center would be located in Brecksville, just off I-77 at Miller Road and Brecksville Road. The R&D center would serve as the corporate anchor for a new mixed-use development project and is expected to be approximately 500,000-square-feet in size. 

With these new facilities, we plan to create a next generation workplace environment that attracts and retains top talent and further ignites the creativity, collaboration and industry-leading innovation that our customers have relied on throughout our long history. The plan to stay in Cleveland and Northeast Ohio builds on the 154-year legacy of Sherwin-Williams as one of the region’s top employers and drivers of economic activity. This major planned investment in Cleveland and Northeast Ohio reflects our confidence in the continued strength of the region and its people and our project partners’ ability to deliver on their commitments.

Preliminary plans call for Sherwin-Williams to invest a minimum of $600 million to build both facilities. Combined, the two facilities would house more than 3,500 employees with room to accommodate significant future growth. We estimate adding a minimum of 400 jobs at these facilities over time, an increase of 11 percent to the Company’s current local workforce. Many of these jobs will be professional staff, engineers and chemists.

Current plans will have R&D roles transfer from the Breen Technology Center and Warrensville Heights, Ohio locations to the planned new R&D center in Brecksville. Employees located at Landmark Office Towers and Skylight Office Tower in Cleveland will transfer to the planned new global headquarters along with non-R&D professional roles currently located at Breen Technology Center and Warrensville Heights. The Company has no plans to move other facilities to the new R&D center or the new global headquarters at this time.

I want to emphasize that this process will extend over several years. As previously announced, any transition to the new facilities is not expected to occur until 2023 at the earliest. During this time we will continue to update employees as new information becomes available.

Later today we will issue a press release announcing our plans. This release and additional materials will be available on buildingourfuture.com. Please visit mySherwin to view additional employee-specific materials, including FAQs.

Today’s press release will likely generate considerable media coverage on a wide variety of channels, including social media. Only the Sherwin-Williams Corporate Communications Department is authorized to speak publicly or communicate externally on behalf of the Company. If you receive any inquiries from the media or other third parties, please politely explain that you are not able to comment on behalf of the Company, gather their contact information and let them know a Company representative will get back to them. It’s also important to remember that any mention of Sherwin-Williams on social media could be quoted by the press. Please be thoughtful if you engage in social media, express only your personal opinions and do not identify yourself as a representative of the Company.

Forward all media and public inquiries as well as any media activity outside of a Sherwin-Williams store, office or facility to:

Julie Young, Vice President, Global Corporate Communications
corporatemedia@sherwin.com
216-515-8849

Thank you for your hard work, dedication and patience as we work through this important process. This is exciting news that will shape our Company’s future success. In the meantime, let’s continue to focus our efforts on the service, quality and innovations that fuel our commitment to help customers around the world succeed.

Sincerely,

John G. Morikis
Chairman & Chief Executive Officer
The Sherwin-Williams Company

SHW confirms HQ on Public Square, R&D to Brecksville

Sherwin-Williams current headquarters is the background
with its Cleveland research center in the foreground-center.
New facilities will be built and these old facilities will be
closed (Iryna Tkachenko). CLICK IMAGES TO ENLARGE

The following is a press release issued at 8 a.m. Feb. 6 by Sherwin-Williams....

CLEVELAND, February 6, 2020 – The Sherwin-Williams Company (NYSE: SHW) today announces it is finalizing plans to build a new global headquarters in downtown Cleveland and a new R&D center in the Cleveland suburb of Brecksville. The plans follow an extensive competitive site selection processand are contingent upon completion of standard due diligence, approvals of incentives and other matters at the state, county and city levels, and resolution of business and legal matters that accompany such major real estate investment projects

“Our plans to continue investing in Cleveland and Northeast Ohio build on our 154-year legacy as one of the region’s top employers and drivers of economic activity,” says Sherwin-Williams Chairman and Chief Executive Officer John G. Morikis. “Driven by our continued need to serve our customers at the highest level and retain and attract top talent, we intend to create a next-generation workplace environment that ignites creativity, collaboration and industry-leading innovation. We currently operate out of a 90-year-old headquarters building that has served us well but is no longer conducive to meeting our future needs. The major planned investment in Cleveland and Northeast Ohio we are announcing today reflects our confidence in the continued strength of the region and its people and our public partners’ ability to deliver on their commitments.”

Preliminary plans call for Sherwin-Williams to invest a minimum of $600 million to build both facilities. The planned new global headquarters would be in downtown Cleveland just west of Public Square between Saint Clair Avenue and Superior Avenue and would be approximately 1,000,000-square-feet in size. The planned new R&D center would be in Brecksville, conveniently located off I-77 at Miller Road and Brecksville Road. The R&D center would serve as the corporate anchor for a new mixed use development project and would be approximately 500,000-square-feet in size.

Combined, the two facilities would house more than 3,500 employees with room to accommodate significant future growth. Sherwin-Williams estimates it would add a minimum of 400 jobs at these facilities over time, an increase of 11 percent to the Company’s current local workforce. Many of thesejobs will include professional staff, engineers and chemists.

Sherwin-Williams is working with several state and local partners on this project, including the State of Ohio, JobsOhio, Cuyahoga County, Cleveland-Cuyahoga County Port Authority, the City of Cleveland and the City of Brecksville. Approvals of the Company’s economic development packages and other matters remain pending and are expected over the next several months.

“The process to date has been an outstanding example of an effective public-private partnership, with particularly strong leadership from Ohio Governor Mike DeWine and Lieutenant Governor Jon Husted,” adds Morikis. “JobsOhio President J.P. Nauseef, Ohio Development Services Agency Director Lydia Mihalik, Cuyahoga County Executive Armond Budish and his economic development team, Cuyahoga County Council President Dan Brady, City of Cleveland Mayor Frank Jackson, Cleveland City Council President Kevin Kelley, the City of Cleveland’s economic development team, Brecksville Mayor Jerry Hruby and Brecksville City Council President Mike Harwood all have demonstrated ongoing support for our Company’s ongoing success as we near the final stages of our plans. We also thank Team NEO, the Greater Cleveland Partnership (GCP), Downtown Cleveland Alliance (DCA) and ClevelandCuyahoga County Port Authority for their work and assistance.”

Valor Acres in Brecksville, site of SHW's new R&D facility
(DiGeronimo companies).

The Company’s public and private partners estimate significant positive economic impact in Cleveland and the State of Ohio driven by jobs, payroll, tax revenue, incremental jobs created by companies supplying goods on the projects, and the recirculation of wages throughout the regional economy. Sherwin-Williams current local footprint in Cuyahoga County including the City of Cleveland has generated more than $4 billion in employee payroll and $140 million in taxes over the past 10 years. Based on current site plans, the City of Cleveland estimates that when the new global headquarters is occupied, the Cleveland Metropolitan School District will receive an estimated $3 million in additional annual revenue from Sherwin-Williams.

“We are pleased to be a partner with Sherwin-Williams on this highly competitive project,” says Ohio Governor Mike DeWine. “The state of Ohio, JobsOhio and our regional and local economic development partners have been focused on keeping one of Ohio’s leading companies right here where they belong. Sherwin-Williams is an important part of the Cleveland and Northeast Ohio community, and the announcement today will provide good jobs and strong economic activity for Ohioans for years to come.”

Sherwin-Williams has conducted a national search and explored multiple potential sites in other states as part of this project. The Company acknowledges their efforts and appreciates the thoroughness of the offers received. After a detailed analysis, the proposals from the State of Ohio, JobsOhio, Cuyahoga County, the City of Cleveland and the City of Brecksville have proven to be the most attractive in enhancing our ability to serve customers and retain and attract top talent over the long term.

“Sherwin-Williams has been a tremendous asset to our community, and we’re pleased to see their planned commitment for continued growth,” says County Executive Armond Budish. “This project again demonstrates that our region can compete on the national stage, and we intend to use this model as an example for other companies to locate in Northeast Ohio.”

Over the past 10 years, the Sherwin-Williams Foundation, the Company and its employees have given more than $20 million to support local communities in Northeast Ohio. Sherwin-Williams employees also serve on more than 100 non-profit boards in Northeast Ohio. This philanthropic spirit contributed to the Company’s plans to remain in Cleveland and Northeast Ohio.

“Sherwin-Williams has been a part of the fabric of our community for 154 years. A new global headquarters in Cleveland lays the foundation for the next chapter for both Sherwin-Williams and our city’s history,” says City of Cleveland Mayor Frank G. Jackson. “Cleveland has two of the largest business districts in Ohio, with world-class health care and arts and entertainment options, all connected to our thriving residential neighborhoods. The robust and vibrant quality of life here attracts the world’s best and brightest talent, as does our proximity to 25 colleges and universities in Northeast Ohio. Sherwin-Williams recognizes these important strengths of Cleveland.”

“We are excited about Sherwin-Williams plans, which would bring an infusion of jobs and additional tax revenue into our community,” says Brecksville Mayor Jerry Hruby. “We believe the new R&D center in Brecksville would be a catalyst to attract increased office, residential, hospitality and retail investment.”

The R&D center and global headquarters project continues to be a multi-year process. The transition to the new facilities is not expected to occur until 2023 at the earliest. No announcements have been made regarding construction partners, and no decisions have been made regarding the disposition of the Company’s current R&D center and headquarters, located in Cleveland at Canal Road and W. Prospect Avenue, respectively.

For ongoing updates on the Company’s new R&D center and new global headquarters, please visit sherwin-williams.com/buildingourfuture/.

END

SHW: HQ lands west of Public Square, R&D to Brecksville

Parking lots belonging to the Weston (foreground)
and Jacobs (just beyond) groups are slated to be
developed with Sherwin-Williams' massive new
headquarters facility and up to 1 million square
feet of structured parking (Garfield12323).
CLICK IMAGES TO ENLARGE THEM

Tomorrow, as has been reported on this blog many times in recent months, Sherwin-Williams (SHW) will announce that its new, consolidated headquarters facility will be built on parking lots owned by the Jacobs and Weston groups west of Public Square, according to several sources.

A press release will be issued tomorrow by SHW. It is doubtful that any site plans or renderings of the new HQ facilities will be included. The current headquarters with about 3,150 jobs is located in the Landmark Building, 101 Prospect Ave., with other SHW offices in the neighboring Skylight Office Tower.

The fact that SHW is not only staying but will relocate and add to downtown as many as 1,800 office jobs, company-wide training facilities and development of nearly 7 acres of windswept parking lots in the central business district is a tremendous victory for downtown Cleveland. SHW's HQ will reportedly measure 1.45 million square feet and represent a $1 billion investment.

The jobs will be consolidated downtown from throughout Northeast Ohio and from other states. There will also be significant spin-off developments that have been pending for months on nearby properties downtown.

An unofficial conceptual rendering of what the SHW HQ on the
Jacobs/Weston lots could look like, based on sources involved
with the project. It is unlikely that a supertall tower will rise as
part of this project considering the amount of land that SHW
will be acquiring for its new HQ (Geowizical).

Construction on the new headquarters could start as soon as one year from now. It will create thousands of construction jobs and benefit many of SHW's contractors like Welty Building Co., Gilbane Building Co., Vocon Partners LLC architects, First American Title, Enviroprobe Integrated Solutions Inc., Environmental Works Inc., DRS Enterprises, Strategic Environmental Services Inc. and many more.

But it isn't a complete victory for the city of Cleveland although it is one for Greater Cleveland. Also in play was SHW's consolidated research and development (R&D) facility with up to 1,000 jobs, including about 400 R&D jobs to be relocated from Minneapolis. The R&D facility will go to the former Veterans Administration Hospital site in Brecksville, being redeveloped as Valor Acres by the DiGeronimo Companies.

It was one of two finalist sites for the R&D center that included Bedrock Cleveland's riverfront phase of its CityBlock development. Cleveland will lose 350-400 R&D jobs with the closure of SHW's John G. Breen Technology Center, 601 Canal Road. As many as 300 jobs will be relocated from SHW's automotive and performance coatings groups, 4440 Warrensville Center Rd., Warrensville Hts.

A month ago, SHW took a harder look at Brecksville after it abandoned its favored site for the R&D facility -- about 9 acres of land owned by Scranton-Averell Inc. on Scranton Peninsula. The site, across the river from the Breen Center, was apparently polluted with wood preservatives by decades of use as a lumber mill and storage yard.

Valor Acres, the 100-acre former Veterans Administration
Hospital property in Brecksville, is owned by the city. It
awarded DiGeronimo Companies rights to clean up and
develop the site at I-77 and Miller Road (DiGeronimo).

Sources said the property owner didn't respond to offers to clean-up the site and and to development overtures in a timely manner. A Scranton-Averell representative didn't answer questions submitted by NEOtrans via e-mail or even return a reply receipt.

Just a few days ago, Bedrock company officials were reportedly very confident that they would land the R&D facility and be an anchor for its ambitious plans for developing the riverfront below Tower City.

But a source said the proximity of SHW's HQ didn't matter for the R&D facility once it was decided that it wouldn't be attached to the HQ. So, in that respect, it is fortunate for Greater Cleveland that the R&D facility didn't end up in another state.

The R&D facility will measure about 350,000 square feet, compared to 140,000 square feet at the existing Breen Center. One building at Breen dates from 1948 and the other from 1993. Some of the 170,000 square feet of buildings at the R&D facilities in Minneapolis that SHW acquired in the Valspar acquisition are much older than Cleveland's R&D center. But like Cleveland's, Minneapolis' buildings were recently renovated.

In the coming weeks and months, more details about SHW HQ+R&D projects will become known, including site plans, massings, renderings and other design elements for both the downtown Cleveland and Brecksville sites.

END