Megaproject program delays may curb $2 billion in development

A new state program to help finance large real estate developments
is taking a long time to launch. Only half of the promised tax credits
will be awarded to create much-needed jobs and housing in Ohio's
 urban centers -- unless lawmakers extend the program (file photo).

** UPDATED MAY 2, 2021 **

After nearly five months since Senate Bill 39 was signed into law by Gov. Mike DeWine, the so-called megaprojects tax credit it authorized still isn't a functioning program. Worse, it won't be functioning before the end of the state's current fiscal year ending June 30, a state official confirmed today.

Unless the program is extended, the delay will leave only two years or just half of the $400 million in authorized credits available for awarding over the program's originally intended four-year lifespan. DeWine signed the Transformational Mixed Use Development (TMUD) tax credit program into law on Dec. 29, 2020.

It will provide $100 million per year in tax credits to large, complex real estate construction or renovation projects, mostly in Ohio's large urban centers, having price tags of $50 million or more. The statute assigns administrative responsibility to the Ohio Tax Credit Authority, part of the Ohio Development Services Agency, to make TMUD credits available, review applications and award the credits according to agency rules.

Nearly five months later, on April 19, the Ohio Development Services Agency posted three pages of draft administrative rules for the TMUD program for the public to review and to submit comments. A public hearing on the proposed rules is scheduled for 9:30 a.m. May 26.

The state's fiscal year, along with the state government's two-year operating budget, or biennium, ends a month later. Todd Walker, chief communications officer for the Ohio Development Services Agency, confirmed the agency would not be able to start awarding TMUD tax credits before June 30.

With fewer obsolete commercial
buildings available for conversion,
more urban core housing will have
to be built new, requiring new finan-
cial resources like the the TMUD
tax credit program (KJP).

"We expect the program will launch in the first quarter of fiscal year 2022," Walker said. He added that the agency "is working diligently to make sure this program will be successful and have a positive impact on Ohio communities."

"We're still working through it," said John Werkman, chief of the Ohio Development Service Agency's Business Services Division during a monthly meeting of the Ohio Tax Credit Authority April 26. "The rules don't cover everything. We're trying to get the program ramped up as quickly as we can."

But Walker noted that the legislature may extend the TMUD program's authorization beyond its current sunset date of June 30, 2023 -- the end of state fiscal year 2023 -- to achieve the originally desired four years of program benefits.

"It is our understanding that the General Assembly is pursuing avenues to carry forward the tax credits allocated to the program for use in future fiscal years," he said.

When asked if unused tax credits from prior fiscal years could be awarded in the present, Walker referred to the statute authorizing the TMUD program.

"The tax credit authority may not preliminarily approve more than $100 million of estimated tax credits in each of fiscal years 2020, 2021, 2022, and 2023," Walker said in quoting the statute. "Meaning, that the approval of the tax credit amounts for projects by the authority is to be made in those fiscal years and limited to $100 million in each of those fiscal years."

Not all TMUD-eligible urban core housing projects are located down-
town or in other hot city neighborhoods. Large, difficult restoration
projects like the Richman Brothers factory on East 55th Street
are located in low-income areas. Their reactivation will help
add businesses and jobs in those neighborhoods (LoopNet).

There is a carry-forward provision in the law which, the bill's original sponsor Senator Kirk Schuring (R-29, Canton) said might allow the $100 million in tax credits in FY2020 and the current fiscal year to be awarded after June 30. But Walker disputed that.

"The carry-forward provision you referenced applies to the use of the credit by a person/entity that receives the credit, once a preliminarily approved project is completed, if the credit amount for the person/entity exceeds the applicable tax liability for the period the certificate is issued," Walker said.

Prior to publication of this article, Schuring did not respond to a phone message, a text message and an e-mail seeking further comment, including whether he might seek corrective legislation to change the four-year TMUD program's inaugural fiscal year from 2020 to 2022.

A TMUD credit cannot be claimed until the project, or a portion of a large project that is planned to be completed in phases, is completed. Thus, in any case, state officials said they do not anticipate revenue losses to the Ohio treasury before fiscal year 2022.

Since two years of the program can't be used, up to $2 billion worth of real estate construction or renovation projects in Ohio's cities may not happen. Or they may be scaled down in terms of their size and number of jobs created or they may face delays -- barring the program's extension.

There are dozens of projects just in Greater Cleveland that could tap into the TMUD program to fill in remaining gaps in their mix of construction financing resources, called a capital stack. NEOtrans identified up to 30 such projects, including nuCLEus whose developer Stark Enterprises came up with the idea several years ago for the TMUD program as a way of continuing the momentum of development in downtown Cleveland.

Some major developments need a small amount of public help
to close a financing gap. One of those is the proposed Bridge-
works tower at the northeast corner of the Detroit-Superior
Bridge and West 25th Street in Ohio City (Mass/LDA).

Most new residential inventory that's been added in downtown Cleveland this century was carved out of historic buildings that were considered obsolete for modern commercial uses. State and federal historic tax credits completed their capital stacks to renovate and convert those buildings.

Since 1995, 31 residential developments in downtown Cleveland 10 stories or taller were completed and only five of those involved new construction -- Crittenden Court Apartments, Pinnacle Condominiums, The Avenue District Apartments, The Beacon apartments and The Lumen apartments.

And, since 2006, seven 20+ story residential developments opened in downtown Cleveland. Only two of those involved new construction -- The Beacon and Lumen. The others were a result of rehabilitating historic commercial buildings, the remaining supply of which is becoming constrained and/or involving much more expensive renovation projects like The Centennial at 925 Euclid Ave.

A third 20+ story residential tower is about to start construction -- the City Club Apartments. It, like The Beacon, could be affordably built only because their developers did not have to build new parking garages for them. 

The Lumen could be afforded because it was built by the nonprofit Playhouse Square Foundation which did not seek a financial return on its investment. And, it got millions of dollars in public subsidies to fund construction of a new garage.

The project that started it all -- nuCLEus. Stark Enterprises
sought the TMUD program to close a financing gap in
its long-planned downtown Cleveland project (Stark).

Yet there remains an unmet demand for downtown housing. The Downtown Cleveland Alliance estimates that demand amounts to 6,800 residential units by 2030 which would equal another 21 Lumen-sized apartment towers to meet that demand.

"This (historic tax credit) program has encouraged our urban areas to preserve their historic buildings, which is what gave our cities their character, and now we need to complement that character with a program that will allow our cities to set the stage for their futures,” said Steve Coven, Stark Enterprises’ vice president of real estate development.

Real estate experts have informed NEOtrans in the past that meeting the demand for urban core housing calls for access to the maximum amount of TMUD credits. This public funding will help investors and builders overcome Greater Cleveland's relatively high construction costs and low rents.

"This is obviously disappointing," said Tim Jackson, director of Integra Realty Resources – Cleveland. "I would hope the legislators are aware of this and carry forward the $200 million. In Cleveland, as well as many Ohio communities, financial feasibility is typically difficult to achieve with our current lease/rent levels. Add in the rise in construction costs and its really a double whammy for Northeast Ohio. These types of mega projects can be a catalyst for surrounding development and really help improve the immediate area."

"There seems to be so many projects in Cleveland that are so close to the finish line financially," said Zak Baris, president of Comprehensive Zoning Services, a real estate due-diligence firm. "This (TMUD program) would help complete the equity gap for numerous projects that couldn't previously work."

END

University Heights OKs 30-unit townhouse development

South Taylor Place, featuring 30 townhomes, many with rooftop
decks offering views of University Circle and Downtown Cleve-
land, are on a course to see construction start as early as this July
north of the Cedar-Taylor District in University Heights (Sixmo).
CLICK ON IMAGES TO ENLARGE THEM 

As part of University Heights' initiative to increase the city's population through housing investment, the northwest corner of the city will soon gain a new 30-unit townhouse development. The project, called South Taylor Place, should see construction start in July following the April 15 approval by the city's Architectural Review Board.

Knez Homes will build the market-rate townhouses on 0.7 acres the firm acquired just north of Cedar Road. Knez, one of Northeast Ohio's largest homebuilders, purchased the land in March from the University Heights City Beautiful Corp. for $7,000, according to county records.

The city-chartered community improvement corporation (CIC) was founded in 2018 for the “purpose of advancing, encouraging and promoting the industrial, economic, commercial and civic development of the City of University Heights,” according to its Web site.

Also, the University Heights City Beautiful Corp. is charged with implementing the city's development master plan. Governing the corporation is a board of directors made up of city elected and appointed officials and a resident of University Heights. The board includes Mayor Michael Dylan Brennan who led the initiative after his election in 2017.

Location of South Taylor Place in
relation to the Cedar-Taylor District
in University Heights (Google).

"The city has to go through a competitive bidding process but when you have a CIC you can pick and choose who you want to work with," Brennan said. "I saw Knez developments in Ohio City and Tremont and wanted to see what they could do here. Knez makes a quality home and we wanted the best."

Construction of the new housing will help address a shortage of available, for-sale homes in Greater Cleveland and especially in the Heights area, near fast-growing University Circle. In fact, being just three miles from University Circle is one of the reasons why Knez sought to develop this property.

"The proximity of that land to everything is pretty incredible," said Bo Knez, President/CEO and founder of Knez Homes. "It's real close to all of the amenities in the Heights."

"We're trying to diversify the housing offerings in University Heights," Brennan added. "There's a lot of demand for housing in our community. One of the things I love about this city is you're 10 minutes away from the medical and institutional centers of University Circle."

Site plan for South Taylor Place (Sixmo).

The immediate area has a mix of greenspace and a walkable commercial district. The townhouse development will have a pocket park, walkway and pet area on its north side, set on land just over the city limits in Cleveland Heights.

That strip of greenspace will be added above newly rebuilt gas and sewer infrastructure along another greenspace for the neighboring Deborah S. Delisle Educational Options Center. That facility is part of the Cleveland Heights-University Heights City School District.

The Heights is known for its walkable commercial districts clustered around major intersections. The Cedar-Taylor District is no different, with the 1997-built University Corners shopping center being one of the newest and most car-centric. Other buildings at Cedar-Taylor are approaching 100 years old, with some having apartments over storefronts.

A mix of shops and restaurants near the planned South Taylor Place townhomes include Cafe Tandoor, Anytime Fitness, Jamerican Kitchen, Family Dollar, International Food grocer, Pizzabogo, Sherwin Williams Paint Store, Irv's Sandwich Shop, Mister Brisket, Foodhisattva and more.

Courtyard in the planned South Taylor Place development (Sixmo).

Knez says that construction on the townhouses should be complete by this time next year. South Taylor Place represents an investment of about $12 million by Knez Homes in the community.

Each townhouse will measure about 3,000 square feet, including a two-car attached garage. Townhouses will have 15 years of tax abatement and be fee-simple, in other words, no condominiums. List prices are expected to be in the mid-300s, Knez said.

The tax abatement doesn't apply to land, the property is now in private hands and the land will be developed. Thus, Brennan expects it to generate $20,000 in property taxes per year to the school district. And if it falls short, the city will make up the difference with income taxes generated by residents living in the new townhomes.

"The ARB (Architectural Review Board) was the last step before a building permit can be issued," Knez added. "There's still some minor tweaks to be done but we'll be pretty much ready to go in 90 days."

Westward view of South Taylor Place from the intersection of
Wynn Road and Washington Boulevard (Sixmo).

As part of development agreements approved by the University Heights City Beautiful Corp., Knez is also adding "in-fill" homes on a handful of vacant parcels throughout the city. These are mostly mature neighborhoods, filled with single-family homes that were built 60-100 years ago.

Some older homes that weren't well maintained or suffered fire damage got demolished. Nothing replaced them, leaving a few "missing teeth" along neighborhood streets. Over the past decade, University Heights' population has dipped by about 500 residents to 13,000, Census estimates show.

"This (South Taylor Place townhomes) and the in-fill of vacant, unused parcels with single-family homes is part of the mayor's progressive plan to add residents," Knez said.

"One of things I did when I became mayor was to not leave opportunities on the table," Brennan said. "The previous administration shied away from infill (housing) but I've embraced it. The city government took the view that development happened to it rather than embracing it. We haven't had a major housing development since the 1970s."

South Taylor Place will add more pedestrian activity to the Cedar-
Taylor District which features many restaurants, shops and other
businesses, some of which are seen along the bottom of this
eastward-looking view from South Taylor Road (Sixmo).

Most of the property on which South Taylor Place is planned was previously the home of the congregation Oer Chodosh Anshe Sfard, an Orthodox Jewish synagogue founded in 1894 in Cleveland by a group of Ukrainian Jewish immigrants. The synagogue was demolished shortly before the land was transferred to the city in 1999, county records show.

Other properties around the Cedar-Taylor District are finding new uses. Among those is the long-closed KFC restaurant, 2115 S. Taylor, which the city declared as a blight and threatened to demolish at the owner's expense.

That property was acquired in December 2019 by Taylor Raymont LLC, part of the family of companies founded by Donna Cheung Hom who passed away in January. The Hom family continues to develop, own and operate Chinese restaurants including Ho Wah in Beachwood, King Wah in Rocky River plus Li Wah and Asia Plaza in Cleveland's Asiatown neighborhood.

Brennan also said there is a buyer for the closed Midas car repair shop, 13483 Cedar, but he could not reveal it yet. He said the new user will not operate it as a car servicing business but the buyer intends to use the 0.46 acres of land as it is currently zoned, which is a local retail district.

END

CBIZ is latest biz seeking suburb-to-downtown move

CBIZ, Inc. is seeking to make a move from its existing offices in
Independence to downtown Cleveland but hasn't found a suitable
office building yet. But the first has to make a move by March 1
according to two real estate brokerage sources (Bing).
CLICK IMAGES TO ENLARGE THEM

A growing employer is seeking to move from the suburbs to downtown Cleveland and has less than a year to do it. CBIZ, Inc., founded in 1987, has grown to 4,800 employees in more than 100 offices nationwide with more than 200 of them at their headquarters in 6050 Oak Tree Blvd. in Independence.

The firm has to move by March 1, 2022, so the firm isn't a candidate for a proposed new office building like the 25-story building in nuCLEus or any other office towers in consideration. And, for that matter, CBIZ cannot consider moving to renovated office space planned in several existing buildings about to go under the knife like 925 Euclid, 55 Public Square or the Rockefeller Building.

That's the word from two real estate brokers who spoke off the record because they did not want to compromise future business deals. Allegro Real Estate Brokers & Advisors was hired by CBIZ to help it find a new home. Locally, Adam Gimbel, an Allegro principal, is handling the search.

But CBIZ, which provides accounting, tax, insurance and human resource services to businesses is seeking 50,000 to 60,000 square feet in a downtown office location. It also wants building naming rights for wherever it lands, the sources said. CBIZ is the sole company name on its current building.

The source also noted that MAI Capital Management, LLC will be taking over CBIZ's space at Park Center in Independence after CBIZ leaves. MAI is currently located at 1360 E. 9th St., Suite 1100, downtown. But a trading of spaces wasn't in the cards for CBIZ.

The office currently occupied by CBIZ will be taken over by
MAI Capital Management next year. Where CBIZ will land
in downtown Cleveland has yet to be determined (Google).

The brokers with whom NEOtrans spoke said CBIZ representatives did not like MAI's space nor did they like other existing office spaces they visited downtown. There is an East 9th office location being considered but the sources did not wish to identify it at this time.

If CBIZ lands downtown, it will be the latest of many such moves. The offices and studios of iHeart Media Cleveland recently announced it will move more than 100 employees from Independence to 668 Euclid Ave.

FM Global, a Providence, RI-based commercial property insurer, will soon be relocating more than 100 employees from the Great Northern Corporate Center in North Olmsted to the North Point Tower, 1001 Lakeside Ave., in downtown Cleveland.

Fathom marketing recently moved its 100 employees from 8200 Sweet Valley Drive in Valley View to a renovated space at Stonebridge Plaza, 2020 Center Street in the Flats. Also moving from the suburbs to an historic building downtown was Goldwater Bank N.A. Mortgage Division, which left 23500 Mercantile Road in Beachwood for the Utica Building, 2217 E. 9th. Goldwater has 46 employees here and has plans to more than double that.

And the biggest suburb-to-downtown move is the upcoming shift of CrossCountry Mortgage, LLC and its 500 headquarters employees with hundreds more hires expected after its new offices opens.

As part of its search, CBIZ is reportedly looking at sites along East
9th Street in downtown Cleveland -- a prestigious address for many
financial and business development firms (Google).

The fast-growing firm has begun renovating for $40 million the former Tap Packaging (previously The Chilcote Co.) complex in the 2100 block of Superior Ave. CrossCountry is currently located at 6850 Miller Rd. in Brecksville.

In addition to offices, their new location will feature ground-floor retail/restaurants along Superior and a 40-unit apartment building fashioned from a structure at 2110 Superior. Apartments will be offered first to CrossCountry employees who may wish to work from home part of the time.

Many are also watching Moen Inc. USA, which might also make a move downtown. Among its options, Moen reportedly is considering an expansion of its existing headquarters at Interstate 480 and Great Northern Blvd. in North Olmsted or build a new HQ to replace its 27-year-old, 141,221-square-foot office building.

Moen, now with more than 600 HQ employees, has outgrown its 1993 HQ building and has since expanded into leased offices on the other side of I-480 along Country Club Boulevard. With growth continuing, all site options are on the table including a move out of Greater Cleveland.

END

Rockefeller garage demolition opens door for major development

A significant new development site was created today by the
Cleveland Landmarks Commission when it authorized the
demolition of an obsolete parking garage next to the new
Sherwin-Williams headquarters property (Google).
CLICK IMAGES TO ENLARGE THEM

Shortly before Cleveland Landmarks Commission approved the renovation of the neglected 116-year-old Rockefeller Building, it unanimously allowed the demolition of the century-old garage behind it. The potentially dynamic combination of those two actions received only a brief mention during today's commission hearing.

The result was that the Landmarks Commission just created a highly marketable and major development site.

NEOtrans broke the story last August about a partnership taking title to the Rockefeller Building property. The partnership of Realty Dynamics Equity Partners, LLC of Akron, OH and Wolfe Investments, LLC of Plano, TX. acquired the 17-story office building, the five-level parking garage and the 1.84 acres on which they both set for $13.35 million.

The 261,264-square-foot, half-leased office building at 614 W. Superior Ave. will be redeveloped with a mix of uses. Floors 5-16 of the Rockefeller Building will be repurposed with 436 apartments including 273 efficiencies. The apartments would measure anywhere from about 273 to 726 square feet each, preliminary plans show.

General contractor Geis Companies will renovate floors 2-4 with offices for existing or new tenants. The ground floor, with entrances off West Superior and West 6th, will have 12,000 to 15,000 square feet of retail, be it shops, barber/salons, restaurants and/or food hall. Geis will also manage the building.

Demolition plan approved today by the Cleveland Landmarks
Commission. Superior Avenue is along the bottom of the image
and West 6th Street is at the right side. The parking garage to be
demolished is near the top-center of the image along Frankfort
Avenue and will create an L-shaped development site (GLSD).

Geis revitalized two other major, historic structures downtown. The May Company department store on Public Square was renovated into apartments over retail and the former Cleveland Trust Rotunda was turned into the Heinen's grocery store. Geis' rehabilitation efforts in both projects received wide praise for their attention to detail in preserving historic features while adding modern technology and features.

The spark for this potential $100 million redevelopment is the new 1-million-square-foot global headquarters for Sherwin-Williams (SHW) that will start to rise by year's end across West 6th. The new HQ will bring up to 3,500 employees to this area, the southern part of the Warehouse District.

"Sherwin-Williams is a prime driver for business here," said Conrad Geis, director and managing partner of Geis Companies.

Having that spark to further investment next door was a key factor not only for the Rockefeller Building redevelopment but also for the now expanded development site surrounding it. That's why the demolition of the decayed garage is so critical.

As recently as last year, demolition of the garage seemed unlikely. It was the first structure in downtown Cleveland built as a multi-level parking garage, it's part of the historic Rockefeller Building with all of the history surrounding that, and it's located in a designated historic district.

Some architectural features may be preserved from
the Rockefeller Building's century-old parking garage
for possible re-use in public spaces along West 6th
Street and Frankfort Avenue, serving as a buffer to
parking lots or new high-rise buildings (GLSD).

But Osborn Engineering produced a report at the behest of Geis, showing that the garage doesn't meet building and design standards as a parking garage or for repurposing with human uses such as residential, offices or retail. In fact the garage hasn't been used for parking this century, said Brandon Kline, Geis' director of design development.

The vehicle ramps are too steep and narrow, there's no ventilation system, the stairways do not meet code and the building is in poor condition with major masonry failure and exposed rebar. The split level layout of the structure makes it difficult to convert for a human use, the report said.

Initially, demolition of the garage will create sufficient space for construction staging in the renovation of the Rockefeller Building, Kline said. Then it will provide an interim surface parking lot, landscaped along West 6th and Frankfort Avenue using architectural features that can be salvaged from the garage.

The last thing downtown Cleveland especially the Warehouse District, needs is more surface parking lots, said Thomas Starinsky, associate director of the Historic Warehouse District Development Corp.

"We're thinking about more human activation of our sidewalks and not car activation," he said. 

Kline said the property owner considers the new parking lot to be part of a future development site. Sources familiar with the site say the property owner is already getting inquiries but nothing has been finalized.

View of the Rockefeller Building from Prospect
Avenue and Tower City Center (KJP).

Starinsky reluctantly concurred with the garage's demolition, "knowing this is a development site and hopefully sooner than later that will occur," he said.

"Personally, there's nothing sadder than to be in front of a new building and there's like, pieces of the capitol of the historic building that once stood there that we're supposed to sit on and feel good about it," Starinsky added at today's meeting.

"We're not really thinking about that," he continued. "To the extent that this is practical and cost-effective was the position. It wasn't really any kind of condition (of approval). Related to the historic elements, we do feel strongly about creating an active place for human use along the West 6th edge and the Frankfort edge."

But there's a chance that the new parking lot may never happen, what with the dynamic combination of SHW's new HQ next door, the recent passage of the Transformation Mixed Use Development (TMUD) tax credit and a usable development site created by the garage's demolition.

Developers are already positioning themselves for spin-off momentum from the SHW HQ, starting with the Rockefeller Building's renovation. That could be followed by K&D Group's proposed renovation of 55 Public Square into residential and offices, as well as a new-construction high-rise by Chicago-based Magellan Development Group, north of SHW's new HQ.

Like the Rockefeller Building, renovation of 55 Public Square will reactivate an underused building but without the Rock's Gilded Age architecture. And with its garage soon to be gone, the land surrounding the Rock will have a leg up on the proposed Magellan development site which, at least for now, has to work around two historic buildings that the Warehouse District Development Corp. has shown an interest in protecting.

The Rockefeller Building, its garage behind it and the site's
surroundings including the future Sherwin-Williams HQ
location is shown in this aerial photo (Adam Greene).

The reason for hope in developing next to the Rock is that the demolition of the garage creates an uninterrupted 1.1 acres of open land for development. It is next to what will be the new SHW HQ. And it is in the hands of motivated real estate developers Agostino Pintus of Realty Dynamics Equity Partners and Kenny Wolfe of Wolfe Investments who have a knack of getting things done.

Not having to split up a development around an unmarketable garage removes a huge burden for them. It creates a blank canvas for them to design a mixed-use project that meets the needs of potential commercial tenants seeking to locate across the street from a Fortune 500 company's global headquarters.

In Cleveland, where skepticism is a self-fulfilling prophecy, observers may look to another site to bolster their pessimism. In 2015, Geis acquired 0.3 acres of land at 2173 E. 9th St. on which the New York Spaghetti House stood.

Geis paid $1.5 million for the tiny property and added it to another 0.8 acres the well-heeled developer owned next door, giving it frontage for potential structures on both East 9th and Prospect Avenue. Given the amount of money Geis invested in the property, Kline told Cleveland.com that "We are very motivated to get our own money out of this in the future development."

Sources who spoke off the record said that, if the pandemic hadn't happened, a development plan for the East 9th site would likely have been submitted already. Indeed, Geis reportedly has several irons in the fire here. But any vertical development here or next to the Rockefeller Building may require tapping a TMUD tax credit to make a project's numbers work in this high-construction-cost, low-rent city.

The onus now is on the property owners and development teams associated with both sites to make sure these two properties don't remain as surface parking lots much longer. With Downtown Cleveland running out of obsolete commercial buildings to convert and a robust state incentive for new-construction projects becoming available, the timing couldn't be better for developing those windswept parking lots with vibrant urban uses.

END

Talks restart for Superior Viaduct linear park

Discussions for reusing Superior Viaduct for more public spaces
and fewer parking spaces have restarted after nearly a year of
going silent. City Councilman Kerry McCormack is now
leading those community conversations (AoDK).
CLICK IMAGES TO ENLARGE THEM

With high-rise developments planned and built along the Superior Viaduct, an idea was floated to turn the remaining portion of the 1878-built stone bridge into a linear park. But that idea faded when a Stonebridge Condominiums resident who initiated community discussions about the idea was relocated to Philadelphia.

Or, perhaps said better, the idea briefly faded.

That's because Ward 3 City Councilman Kerry McCormack has brought it up again and will lead the discussions for the time being. The first of those discussions was a meeting held April 14 with the executive board of the Waterfront District Block Club and other Flats West Bank residents.

Those involved emphasized that the discussions were preliminary and still very early. But the goal of the meeting was to start a process to determine the future of the Superior Viaduct, leased by K&D Group, and what public amenity improvements it should have.

"I convened a group of residents," McCormack said. "I will be leading it, but convening all stakeholders including residents, K&D and others as well. The conversations will include all stakeholders and be collaborative."

On a warm evening last spring, a small number of people came
out on to the vehicle-free eastern part of Superior Viaduct. In
spite of the spectacular views, there were and are few seats,
tables, cafes, vegetation or interactive features to make
lingering on the viaduct more enjoyable (KJP).

McCormack said there is no date set yet for a follow-up meeting. But, at last week's meeting, he said the attendees wanted to create a more formal working group among stakeholders having an interest in how Superior Viaduct is used.

"This will require getting all stakeholders on board," McCormack said. "The conversation (on April 14) was just about the viaduct itself and starting a community process for the future designs of the viaduct."

That's where things were left off last year. That effort was begun by then-block club chairman Scott Aylesworth. He said the viaduct could become a small version of New York City's High Line Park, developed from an abandoned elevated freight railroad through the Chelsea section of Manhattan.

Current Waterfront District Block Chairman Mike Rogalski didn't respond to an e-mail seeking comment prior to publication of this article.

The westernmost 400 feet of the viaduct has about 140 parking spaces for Stonebridge residents, office tenants and restaurant customers. The eastern 600 feet is closed to vehicular traffic and open only to pedestrians. It has has few amenities, public seating, gardens or other features that invite people to linger on it.

The western end of the viaduct is a parking lot for Stonebridge
residents, accommodating about 140 of their cars (KJP).

Redesigning the viaduct as a linear park would require relocating the parking spaces to a new location, such as a parking garage. Building a new parking deck or converting an old warehouse nearby to relocate the parking would cost millions of dollars.

The concept arose last year as several high-rise residential developments along the viaduct were coming to the fore and would complement Stonebridge's high-rises built by K&D Group 10-20 years ago. New high-rise projects include Bridgeworks at West 25th Street that recently won approval by City Planning Commission to build a 16-story residential and hotel tower.

Activity surrounding another high-rise development, a 27-story apartment tower called The Viaduct, had gone quiet since it was approved by planning commission last August. But it resurfaced April 6 on the Opportunity Exchange website. United Community Developers is seeking $16 million in Opportunity Zone equity to help finance the project's construction costs which the developer estimates at just $65 million.

Wayne Jatsek, founder of United Community Developers, didn't respond to e-mails seeking more information. 

There have been no recent updates about other projects surrounding Superior Viaduct, including a proposed 20-story building at 1250 Riverbed Street and proposals to develop acres of parking lots in the Nautica Waterfront District. However, that could change after details are announced by the Ohio Tax Credit Authority about a new Transformational Mixed Use Development incentive.

New York City's High Line Park turned a rusty eyesore of an unused
elevated freight railroad that once served old warehouses and meat-
packing plants into a magnet for residential and office develop-
ments in the Chelsea section of Manhattan (KJP).

But, like last year, Stonebridge developer K&D Group appears dismissive of the effort or, perhaps more specifically, dismissive of the block club. K&D and the block club have had some legal fights in the past regarding the development of Stonebridge.

"No new talks have been held," said K&D Group CEO Doug E. Price III when e-mailed this week about the latest meeting. He did not respond to a follow-up e-mail. Last year in a NEOtrans article, Price said he liked Superior Viaduct the way it is. 

K&D affiliate Stonebridge Phase One Ltd. has a 40-year lease with the city that started in 2000 for the use and maintenance of Superior Viaduct. K&D pays the city $1 per year but Price said his firm renovated the viaduct at its own expense 20 years ago. In 2040, the city and K&D can renew the lease every two years thereafter.

The lease also says that the agreement should not be construed as a partnership between the city and K&D. It allows the city to walk away from the lease at any time if a public purpose for the viaduct, such as a park, is identified.

Superior Viaduct is much shorter than the High Line Park but also
roughly twice as wide. It was to offer a mixture of uses side-by-side,
including outdoor cafes, historical exhibits and interactive features
but not parking for cars, as envisioned 20 years ago by developer
K&D Group. The parking was to be built in a 150-car garage
next to the bridge at a bend in Washington Avenue (Corna).

"This lease may be terminated prior to its expiration by the director of public service should the city reasonably need the leased premises for public purposes," per the lease.

The lease refers to the zoning code on how the viaduct was to be improved and used by K&D. Price contends the current uses conform to that plan.

However, designs developed by K&D and their architect Robert Corna 20 years ago show the roadway deck of Superior Viaduct would have no vehicles on it except for replica streetcars as a nod to its history as Cleveland's first elevated crossing of the Cuyahoga River valley.

"Stonebridge Phase One Ltd. has proposed to lease the Old Superior Avenue Viaduct for the purpose of reconstructing, rehabilitating, preserving and maintaining the structure for use in connection with a planned residential and retail development to be constructed consistent with a Planned Unit Development Overlay District," the lease reads.

END

AAO: why Amtrak hub at Tower City makes sense

An Amtrak mini-hub at Tower City Center in Cleveland, midway be-
tween Chicago and the East Coast, could cost similar to providing a
station free of freight train interference on downtown's lakefront.
The open door for creating this transportation center could soon
close with more development at Tower City (All Aboard Ohio).
CLICK IMAGES TO ENLARGE THEM

All Aboard Ohio’s Board of Directors voted unanimously this week to favor Tower City Center as the site for a proposed Amtrak mini-hub. But the Board of the non-profit passenger rail and transit advocacy association noted that it would not oppose development of the existing Amtrak station site as the transportation hub.

The statewide group said that Amtrak's proposed mini-hub at Cleveland makes a major capital improvement like this justifiable. It didn’t make sense with Amtrak running just one or two trains each day in the middle of the night. But Amtrak’s proposed Cleveland mini-hub would bring significant new passenger traffic and business activity to downtown Cleveland.

The Board said the timing of its statement urging restoration of Tower City Center, the former Cleveland Union Terminal (CUT), as the city main railroad terminal was motivated by these factors:

• Amtrak is proposing new routes and expanded services on existing routes that could grow its passenger rail services at Cleveland from four nightly trains to 22 trains a day, arriving and departing around the clock. Amtrak passenger boardings at Cleveland may grow from 50,000 per year (or one-fifth of Greyhound’s traffic here) currently to 500,000-1 million (or up to one-fifth of Hopkins International Airport’s annual traffic). This passenger traffic is based on rail service levels existing at other mid-sized metro areas;
• Development is possibly on the horizon for the Riverview parking lots, between Huron and Canal roads, that could end further consideration of the remaining opportunity for restoring Tower City Center as a railroad station unless actions were taken now to preserve a railroad right of way below any development and inclusion of station facilities in any development planned by Bedrock Real Estate or its partners and affiliates;
• Sherwin-Williams has donated to the City of Cleveland the property on which its John G. Breen Technology Center sets, prior to relocation to Brecksville in 2024. With the research facility gone, it allows for the western throat of an Amtrak station at Tower City Center to be built around the Stokes Federal Courthouse.

Moments after departing Cleveland Union Terminal (now Tower
City Center) in 1971, Erie-Lackawanna's afternoon commuter
train picks up speed, bound for Youngstown (Dave Mackay).

All Aboard Ohio said the biggest reason for developing Amtrak's mini-hub at Tower City Center is because the region’s rail transit and bus hub is already in and next to Tower City. Plus, the proximity of many businesses and attractions, the potential for co-locating with an expansion of the Cuyahoga Valley Scenic Railroad, having a station free of interference from freight trains and a crossing of the Cuyahoga River that won’t further inconvenience boaters and commercial shipping are important reasons, too.

The nonprofit organization said it spoke up now because time could soon run out on considering Tower City Center as an Amtrak mini-hub. Future development may possibly encroach on the Riverview parking lots between Huron and Canal roads. This may well be the last opportunity to restore passenger railroad service to what was the Cleveland Union Terminal. Cleveland has a good back-up location on the lakefront, but All Aboard Ohio said it would like to see the better location explored now before it’s too late.

Here is additional detail on why All Aboard Ohio said Tower City Center is a superior location for an Amtrak mini-hub station in Downtown Cleveland:

Today, restoration of passenger rail service at Tower City Center
would have to be sited differently than it was decades ago, due
to development encroaching on the former Cleveland Union
Terminal rights of way. But other changes, like the departure
of Sherwin-Williams' research center will create opportu-
nities for restoring stations here (All Aboard Ohio).

• Greater Cleveland’s public transportation hub is located at Tower City Center and outside its front door on Public Square. Not only is Tower City the hub of all rail rapid transit lines, but the downtown Cleveland routes of the Greater Cleveland Regional Transit Authority (GCRTA), Akron Metro RTA, Laketran, Portage Area RTA and Stark Area RTA all converge on Public Square.
• Tower City Center is also within a five-minute walk of more employers, hotels, restaurants, shops and attractions than the lakefront station site. And it offers the potential for air-rights development above the station, tracks and related facilities – something that is more complicated above tracks that also host freight trains, especially those carrying hazardous materials, as is the case on the lakefront.
• Railroad rights of way accessing Tower City Center remain largely intact even though tracks were removed shortly after railroad passenger service to CUT ended in 1977. They are mostly owned by GCRTA and exist parallel to GCRTA rail rapid transit tracks which Amtrak trains cannot use due to federal regulations regarding crash impact standards as well as insufficient lateral clearances.
• The 2002 construction of the Stokes Federal Courthouse on CUT’s west throat had presented an obstacle. But during the West Shore Corridor Alternatives Analysis a decade ago, Parsons Brinckerhoff (now WSP) showed that railroad commuter trains from Lorain could enter a station built on the former CUT coach yards, now the Riverview parking lot. It required building above Canal Road to avoid the Stokes Federal Courthouse. But now, Canal Road can be rerouted or removed and the western throat to a Tower City Amtrak station built where Sherwin-Williams Breen Technology Center is now located after its probable demolition sometime after 2024.

  

  Numerous cities throughout the United States are restoring or
  expanding their historic railroad stations for their intended pur-
  poses. This is the historic Denver Union Station which was
  being modernized and dramatically expanded in 2013 to
  accommodate regional passenger trains (Ryan Dravitz).

• Amtrak officials expressed to All Aboard Ohio their desire for having a station in Cleveland with operations that will have to contend with few if any freight trains. A station at Tower City Center would offer that. To enjoy this same benefit at a lakefront station would involve rerouting freight trains to a “Lakefront Bypass” just south of downtown Cleveland, requiring the investment of about $200 million to add tracks to existing Norfolk Southern rights of way.
• Tower City Center offers the potential for a shared station facility with the Cuyahoga Valley Scenic Railroad (CVSR), offering enhanced visitor access to the Cuyahoga Valley National Park. CVSR has long desired an extension of their train services to downtown Cleveland which, according to past studies, would result in annual ridership growing from about 200,000 passengers per year to more than 300,000. Direct CVSR service to the lakefront is not operationally or economically feasible.
• Another advantage of a Tower City Center station is that trains would cross the busy, navigable portion of the Cuyahoga River on a high-level bridge. On the lakefront, that crossing is via a drawbridge that must be raised and lowered every time any boat larger than a small recreational watercraft seeks passage. The railroad has the legal right of way here, which causes significant traffic jams of boats and larger lake carrier ships. Increasing rail passenger traffic on the lakefront will worsen this waterway congestion and negatively impact commercial shipping.

Cleveland's tiny Amtrak station on the lakefront is served only by
four pre-dawn trains. Yet they provide a brief bit of nightlife to
downtown's windswept lakefront as seen here in 2015 (KJP).

Lastly, Greyhound bus service is likely to follow Amtrak into a new or expanded station facility in Cleveland, as has happened throughout Ohio and the nation. Greyhound traffic is about 250,000 passenger boardings per year in Cleveland. A multi-modal transportation center that combines Greyhound with an Amtrak mini-hub would consolidate passenger boardings and improve connectivity between transportation modes. At stations where Amtrak and Greyhound co-locate, total passenger boardings have typically increased by about 20 percent.

While the former CUT rights of way are mostly intact, some uses have encroached upon the right of way in the past four decades. In nearly all situations, there is sufficient room for the new uses and the restored railroad track to co-exist. For example, through Ohio City, the CUT right of way was built to accommodate six tracks (two for rapid transit and four for railroad). There is room to shift the existing Red Line Greenway closer to Columbus Road to allow for two Amtrak tracks to be constructed. In other locations, such as on the east side of Tower City, RTA tracks and electrical installations would have to be moved slightly to accommodate Amtrak tracks.

Here is 2019 passenger boarding data (and change from the prior year) for Amtrak stations that have Amtrak service levels in the 14-28 trains per day range, plus 2019 Cleveland Hopkins International Airport passenger enplanements data:

• Albany, NY — 26 trains/day — 806,960 boardings +0.08%
• Seattle, WA — 14 trains/day — 682,132 boardings -0.06%
• Milwaukee, WI — 16 trains/day — 639,713 boardings +5.8%
• Portland, OR — 16 trains/day — 585,344 boardings +1.6%
• Lancaster, PA — 28 trains/wkday, 16 Sa/Su — 577,305 boardings +1.7%
• St. Louis, MO — 14 trains/day — 354,304 boardings -2%
• Cleveland Hopkins International Airport — 4,894,541 enplanements +4%

With an Amtrak station, Cuyahoga Valley Scenic Railroad station and Greyhound station — all combined under one roof at Tower City Center — the total passenger traffic from all three modes could exceed 1.3 million boardings per year.

Developing an Amtrak mini-hub that's largely free of freight train
traffic on downtown Cleveland's lakefront will require relocating
freight trains to a bypass route just south of downtown. That may
be as expensive as restoring Tower City Center/Cleveland Union
Terminal (below) but without as many of the benefits as serving
the transportation center on Public Square (All Aboard Ohio).

END

ARPI Apartments to continue Hough's residential growth

Construction could get underway in June on a 42-unit apartment
building on East 93rd Street in Hough, led by ARPI Development
LLC. Thanks to meeting the right people, the project moved from
idea to the cusp of construction in just eight months (GLSD). 

City Planning Commission today approved plans for a new apartment building in Cleveland's Hough neighborhood, marking the latest sign of continued investment in new housing options for that community.

The $12 million development, ARPI Apartments, 1865 E. 93rd St., will offer 42 units of mostly studio and one-bedroom apartments with a small number of two-bedroom units. All apartments in the four-story building will have first-floor patios or upper-floor balconies. 

There will also be an on-site gym, rooftop patio and community room. A 28-space parking lot is planned behind the building. Two vacant residences will be demolished to make way for this project.

It will join the likes of Signet Group's Axis at Ansel Apartments, Inspirion Group's East 90th Apartments, Famicos Foundation's 75Chester and Cleveland Custom Homes' plan to build 100 houses in Hough.

The sudden growth of housing development activity in this long-troubled neighborhood is a direct result of what is happening nearby in University Circle and Fairfax, namely the growth of the Cleveland Clinic and the Health Tech Corridor. That includes the recent announcement of the Cleveland Innovation District.

The new apartment building is designed to complement a variety
of architectural styles and colors on East 93rd. Principals involved
with the development said they strived to be extra-sensitive to the
neighborhood that has long had a tumultuous history (GLSD).

"Our goal is to find undervalued properties that are on the cusp of being developed," said Richard Arnstine, CEO of ARPI Development LLC which he founded with his son-in-law Zach Pinkert. "With the Cleveland Clinic, Case Western Reserve University and the new businesses growing in the area, we wanted to build here."

But building new housing in a low-income neighborhood like Hough can be a delicate issue. Arnstine is sensitive to that and is pledging to work closely with neighborhood stakeholders on how his development can better support residents and businesses in need.

"We want to take some of the profits we make and put them back into the neighborhood," said the retired orthodontist who originally started out at The Ohio State University as a real estate major. "We'll sit down with neighborhood groups and Councilman Basheer Jones to identify how best to support the neighborhood."

He singled out Jones for praise along with Council President Kevin Kelley for their support. Justin Fleming, real estate director of Stay Realty/‎Cleveland Neighborhood Progress, also was instrumental in assisting ARPI's efforts, Arnstine said.

"We'll continue to work with the city to aggregate additional lands for future phases and expand our partnership with the neighborhood," he added, noting the speed at which the project moved forward. "We were pleasantly surprised at how fast this all came together. It happened because we met the right people along the way."

The first phase by ARPI Development is seen at the bottom of
this image, with north to the right and Chester Avenue to the
left. Future phases could rise on the next block west, which
is East 90th Street, near other developments (GLSD).

One of the first people he met was Zak Baris, president of Comprehensive Zoning Services Inc. He put him in touch with Conrad Geis and Brandon Kline, principals at Geis Companies, as well as Mike Bowen at Calfee, Halter & Griswold LLP. Those connections, in turn, put Arnstine in touch with investors Agostino Pintus of Akron and Kenny Wolfe of Dallas.

Because of them, the project went from an idea last October to possibly putting shovels in the ground as early as this June. Construction should take about one year, Arnstine predicted.

"Kenny Wolfe and I have been actively looking at that area for nine months," said Pintus who invests heavily in Northeast Ohio. He is delivering 300 residential units in the coming months in this region with another 700 in the planning pipeline. That includes the redevelopment of the Rockefeller Building in downtown Cleveland.

"When the ARPI Apartments project cropped up, we realized we had to be a part of it," Pintus added. "We wanted to be a part of the dynamic growth of the area, with everything that is happening in Cleveland. It's just phenomenal. It's becoming a shining gem like it was 100 years ago."

"The goal was to create a formidable project that blends perfectly with the neighborhood," Baris said. "We're looking at blending our project with the neighborhood by meeting the current residents' needs and being mindful of them. We don't want to build anything too tall or anything too large."

He said that construction financing is due to close in a matter of weeks. The group continues to work with city officials to aggregate additional lands for future phases that could deliver up to 160 residential units on East 90th and 93rd streets, according to preliminary plans submitted to the city.

END