Cleveland's Tower City may soon become tech hub

Tower City Center's The Avenue in 2008. This was before the
Great Recession, the apparent disinterest by Forest City Enter-
prises in sustaining its Cleveland holdings and declared disin-
terest by Bedrock LLC in retaining the downtown mall as a
retail center had reduced its occupancy by nearly half. Now,
the former railroad station is facing its next useful existence.
(KJP) (CLICK IMAGES TO ENLARGE)

Tower City Center, formerly Cleveland's main railroad passenger station, could soon enter its third incarnation -- this time as a $150 million tech hub. Dubbed City Block, the hub would become an incubator for a variety of technology firms, ranging in size from Fortune 100 anchor companies to flash-in-the-pan start-ups.

City Block, although sought by the heavy-hitting, civic-minded BlockLand initiative to give blockchain technology a home base in the USA, will unite all sorts of technology start-ups in a collaborative setting. After investigating a dozen Cleveland sites, BlockLand's Place Committee has zeroed in on The Avenue at Tower City Center, according to several sources who asked not to be identified. The reason is that negotiations haven't yet concluded, so it's not yet a done deal.

** UPDATE: Blockland founder Bernie Moreno and Cuyahoga County Executive Armond Budish both confirmed on April 19 that Tower City would be the site for City Block but were unable to discuss details as yet. **

The Avenue is the mostly retail space at Tower City topped by skylights which were originally built as the railroad and rapid transit stations of Cleveland Union Terminal in 1930 and converted to their current uses in 1991 by Forest City Enterprises.

Tower City Center had bigger plans in the late-1980s, including
the Riverview Phase shown here, including several skyscrapers
that were never built. The Riverview land remains available for
future development (Forest City Enterprises). 

BlockLand reportedly favors The Avenue because it meets their search criteria. The Place Committee prefers an existing building, one that is located in downtown Cleveland, and offers about 300,000 square feet of collaborative space. The Tower City complex surrounding The Avenue has under one roof nearly 2 million square feet of existing office space, 300 housing units, two hotels, and five rail transit lines fanning outward including to the airport.

Underutilized, The Avenue itself offers 366,000 square feet of space for retailers, cafes, restaurants and even offices. About half of The Avenue is vacant and more tenants will leave soon to make way for renovations. Some retailers will stay.

One of The Avenue's largest tenants is the City of Cleveland's Office of Sustainability. It has its Sustainable Cleveland Center in a former J.Crew store on two levels above the food court and below the Ritz Carlton Hotel. It plans to move out by July at the urging of Mayor Frank Jackson's administration, a City Hall source said.

Funding would come mostly from investors and foundations. A new $50 million partnership was announced between NCT Ventures of Columbus and the Cleveland Foundation to help boost the city's technology scene. It is not clear how much of this funding could be used directly for developing City Block, however.

Redevelopment of Tower City Center could feature a new vision
for Prospect Avenue, which is actually built on a bridge over The
Avenue. That vision could result in a more pedestrian-friendly
setting with wider sidewalks and outdoor cafes (Bedrock LLC).

City Block will also feature a school called Genesis where students in kindergarten through college would learn blockchain. Although popular around the world, blockchain, which uses cryptography to connect and secure electronic records and transactions, has been slow to catch on in the U.S. There is no North American "home base" for this technology yet, so BlockLand supporters are trying to position Cleveland as its American home.

"We're hoping to bring companies here who want to access U.S. markets and need a U.S. headquarters," said BlockLand leader Bernie Moreno in Crain's Cleveland Business. "I'm seeing Cleveland as a spot for that."

In that same article, Moreno said he wants to bring to City Block one or more Fortune 100 regional offices, or a nascent blockchain-brand being developed by a Fortune 100 tech firm. Here are the Fortune 100 tech firms, with one or more of these being approached by Moreno:

4 Apple
8 Amazon
9 AT&T
16 Verizon
22 Alphabet (aka Google)
30 Microsoft
33 Comcast
34 IBM
35 Dell Technologies
46 Intel
51 United Technologies (recently was broken up & bought out)
58 HP
74 Charter Communications (aka Spectrum)
76 Facebook
82 Oracle
83 Tech Data
98 Time Warner

The Avenue was bought from Forest City by Bedrock LLC in 2016. Ever since then, Bedrock has had little or no interest in maintaining retail as the dominant use at the The Avenue. Going as far back as last August, Ken Till, vice president of development for the Detroit-based Bedrock's Cleveland properties, identified all of the components of City Block without anyone realizing he was letting the cat out of the bag.

"We're really looking at mixed-use development," Till said to WCPN's Aug. 9, 2018 The Downtower podcast. "That means office space, school space, maybe a tech incubator."

Given the timing of the Office of Sustainability's departure, the number of local, national and even international heavy hitters involved, as well as other recent rumors, it's possible that the City Block project could see construction as early as this summer -- if an agreement between BlockLand and Bedrock is reached soon.

END

Ohio City mixed-use project may feature downtown ad firm

It was only a matter of time before the 1.7-acre Hingetown site
of the Cleveland Vibrator Company was acquired for redevelop-
ment. It is surrounded by recent, in-progress and planned high-
value, multi-story developments (Google).
CLICK IMAGES TO ENLARGE

An exciting mixed-use development is in the works for the Hingetown section of Cleveland's Ohio City neighborhood, according to multiple sources. Although still in a preliminary stage, the development's concept at this point involves putting the offices for a fast-growing downtown company on the lower floors of a new building with apartments on the upper floors.

Two sources say the site is 2828 Clinton Ave., the current location of one of the region's most well-known and oft-photographed businesses -- the 94-year-old Cleveland Vibrator Company which will relocate from the site. The downtown company seeking to move to the site is The Adcom Group, a full-service marketing and communications firm, according to two other sources.

However, Adcom CEO Joe Kubic would not confirm specifics at this time.

"I personally, along with some other partners, are in the process of buying some commercial property in Ohio City," he wrote in an e-mail. "We haven’t yet finalized our plans for it though. It is certainly a possibility that Adcom may relocate there at some point, but we are happy in our current location as of now."

Adcom is headquartered at 1370 W. 6th St. in downtown Cleveland's Warehouse District, above Starbucks Coffee.

The Adcom Group's Warehouse District HQ
is becoming constrained by the company's
rapid growth. The communications and
marketing firms anticipates further growth
and needs more office space (Google).

Two sources also say that The Snavely Group of Chagrin Falls will likely be the developer for the proposed mixed-use project. However, President Pete Snavely Sr., Vice-President of Marketing Polly Snavely and Vice-President of Development Pete Snavely Jr. have yet to respond to a Feb. 19th e-mail seeking comment for this article.

This would be Snavely's second Hingetown development. Last year, at the corner of Detroit Avenue and West 25th Street, it completed construction of The Quarter -- 194 apartments above 30,000 square feet of ground-floor commercial space. The commercial space is fully leased and the residential units are 93 percent leased, according to The Quarter's Web site. The $60 million development also involves the renovation of the historic Forest City Bank Building on the other side of Detroit with ground-floor commercial uses and 38 affordable apartments above.

One of the most well-known signs on the West Side is this one
at the corner of West 29th Street and Clinton Avenue in Ohio
City's Hingetown section. The manufacturer of industrial equip-
ment to resolve material flow challenges is already looking for
a new home in the area (Google).

Through 2828 Clinton Inc., Cleveland Vibrator owns 14 parcels totaling 1.715 acres, according to Cuyahoga County property records. The site is bounded by West 28th and West 29th streets, as well as Church and Clinton avenues. The proposed development reportedly does not include the Ohio City Firehouse, 1455 W. 29th, which was converted into offices and the Rising Star Coffee Roasters cafe. There is also no information to indicate whether the development site includes a residential property and the Banana Blossom Thai Cuisine at West 28th and Clinton.

Sources do not have information yet as to how tall the proposed mixed-use building might be or when demolition and construction might begin. Contrary to Kubic's statement, other persons close to the project say time is of the essence. Adcom reportedly expects to double in size in the coming years and needs more space soon.

Adcom was founded in 1990 and today has more than 110 employees although Kubic wouldn't clarify how many. The employment data comes from news coverage last year about 100-employee Adcom's purchase of fellow ad firm Arras Keathley that had 10 employees.

The Cleveland Vibrator site is reportedly under a sale contract but has yet to close. Terms of the deal were unavailable. In total, the land and buildings on the 14 parcels are appraised by the county at a combined value of $510,000 for tax purposes. Cleveland Vibrator has already begun a search for its new location and hopes to find a new home nearby soon, a source said.

Its current site is surrounded by new developments, in addition to Snavely's Quarter. Northward, across Church Avenue, Hemingway Development is building its $60 million, mixed-use Church & State project, featuring an 11-story building and a 6-story building. In the opposite direction, across Clinton Avenue, Casto will soon begin constructing its $22 million, 119-unit Dexter Place apartments. To the east, across West 28th, the $24 million West 25th Street Lofts were renovated a few years ago with 83 apartments over 9,600-square-feet of commercial space.

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Gordon Park area -- Cleveland's next housing boom site?

About 150 homes and 8,000 feet of commercial space are
proposed by Knez Homes at East 55th and the Shoreway,
near where Bo Knez grew up. But the site's access to the
lake, downtown Cleveland and University Circle were
bigger factors in him wanting to build here (RSA)
CLICK IMAGES TO ENLARGE

Recent real estate projects show the strength of the housing market in Cleveland, especially in certain neighborhoods accessible to downtown and the lake. New projects are taking at a stab at an undeveloped area for housing -- East 55th Street and the Shoreway, just west of Gordon Park.

When motorists enter Cleveland on Interstate 90, they get an up-close view of Lake Erie to their right that is spectacular at sunset. But to their left is an underwhelming collection of low-level, single-use commercial structures and vacant lots.

This "gateway" to downtown offers an immediate message -- Cleveland hasn't figured out how to capitalize on its lakefront. The highway itself is testament to that. When it was built, it sliced Gordon Park in two to skirt the coal-fired Cleveland Electric Illuminating Co. (now First Energy) Lake Shore Power Station, demolished in 2017. With the power plant gone, developer interest in the Gordon Park area has perked up. That includes rerouting the highway to restore the park and improve access to the lake.

Entering downtown from the east along the lakefront is under-
whelming. The lack of major developments conveys a message
that Cleveland hasn't capitalized on its lakefront (Google)

The latest developer to show interest in the area is Bo Knez, president and CEO of B.R. Knez Construction, Inc., DBA Knez Homes. Knez, who was born in Slovenia and raised in the East 55th-St. Clair Avenue neighborhood, said he has wanted to developed here for some time.

On Feb. 15, he presented conceptual plans to the Design Review Committee of the Cleveland Planning Commission to get its feedback before proceeding with more detailed designs for a mixed-use development. The site is at 5700 South Marginal Rd. with two parcels of city-owned land totaling 3.9 acres. In urban development, that is a large canvas.

On it, Knez says he plans 50-60 townhomes, 90-100 apartments and 8,000 square feet of ground-floor commercial space on the Shoreway side for retail, restaurants or offices. Townhouses would be above the commercial spaces, he said in a phone interview on Feb. 13 but asked for this article to not be published until after his plans were presented to the planning commission.

Views from the Shoreway (I-90) of Knez's proposed East
55th development. The tallest building is a 90- to 100-unit
apartment building, with the shorter structures being 50-60
townhouses. Those nearest to the highway would have
retail/restaurants/offices on the ground floor (RSA).

The site is the former Howard Johnson's 12-story hotel built in 1965 but demolished in 2009. Knez likes this location not just because he grew up nearby, but because it has easy access to downtown Cleveland and University Circle -- the first- and fourth-largest employment concentrations in Ohio. And, of course, the lake is a short walk away.

Planning Commission staff threw some of that cold lake water on Knez's plans, based on their written comments.

"The planned density feels somewhat relentless. Consider reducing the number of units, and create more communal spaces which encourage interaction and a sense of 'dwelling' for the residence," said one unidentified staff person.

"Consideration needs to be given to how this site connects to the surrounding neighborhood and environment to maximize the potential of the 'amenities' that surround this locations," said another commission staffer.

The eastern approach to downtown is a stark landscape, devoid
of any significant structures since the 2017 demolition of the
Lake Shore Power Plant that stood at the left. With it gone,
there's more interest in developing this area including relo-
cating the highway and adding more greenspace (Google).

The last comment is interesting because there is no nearby neighborhood to connect with nor any adjacent amenities. Knez's development, by adding about 150 living units and perhaps 300 residents, will hopefully jumpstart a lakefront neighborhood that can connect with his project.

Interestingly, Knez's presentation listing in the planning commission's agenda also showed his project included a city-owned site on the north side of the Shoreway, at 5500 North Marginal Road. But Knez said that was not correct.

"My interest is only on the south side of the Shoreway," he said. "That site (former Howard Johnson's) has been vacant for a long time."

While Knez may not be interested in the north side of the Shoreway, others are. In fact, that's where development of housing in this area began.

The Shoreline apartments, developed as Quay 55 in 2002, as
 seen from Gordon Park. A dozen more developments of this
scale, including multiple high-rises along this stretch of lake-
front, would offer the kind of neighborhood Knez is trying to
jumpstart with his proposed development (Marous).

It started in 2002 when the Nicholson Terminal building, once a new car warehouse, was converted to the 138-unit Quay 55 apartments by Rocky River-based Coffin Development Co. But Coffin defaulted on a $20 million U.S. Department of Housing and Urban Development-guaranteed loan.

Quay 55 went through several owners until 2017 when Landmark Lakeshore LLC bought Quay 55, renamed it The Shoreline, and got approval to add 29 apartments to the property by converting indoor parking spaces. Occupancy of the building has continued to be high. Only five apartments are currently available in the building, according to The Shoreline's Web site.

Unfortunately, a 4-acre lakefront parcel east of The Shoreline and west of 5500 North Marginal remains undeveloped. This flat, wide open, grassy parcel is owned by Coffin Development Co. -- the same firm that redeveloped the Nicholson Terminal. While it would be a terrific development site, the property remains untouched. There are no public filings to indicate any development activity here.

END

Downtown-lakefront land bridge has momentum, funding

Lake Erie Plaza was a wide pedestrian bridge lined with statues
and vendor spaces over the lakefront railroad tracks. But it was
built for the Great Lakes Exposition of 1936-37 and dismantled
soon thereafter. A land bridge of similar design or even wider
may be sought by city officials and others to link the downtown
malls and North Coast Harbor including its museums, new
development and a long-planned transportation center (PD file).
CLICK IMAGES TO ENLARGE

If the city has its way, a $65 million land bridge linking Downtown Cleveland's malls to the lakefront could soon be the centerpiece of a multi-faceted plan to enhance the area around North Coast Harbor. Developments surrounding the proposed land bridge include expansion of the Rock & Roll Hall of Fame, Great Lakes Science Center, Cumberland Real Estate Development's next phases as well as a multi-modal transportation center.

The City of Cleveland has $25 million in city, county and state funds left over from an earlier plan to link downtown and the lakefront with a flamboyant, curving, skinny and ribbon-like pedestrian bridge designed by "starchitect" Miguel Rosales. The bridge's cost had ballooned to $33 million. Instead, the Cleveland Economic Development Department is pursuing a land bridge envisioned more like the statue-festooned and storefront-lined promenade that linked downtown to the Great Lakes Exhibition of 1936-37. In fact, the land bridge could be even wider -- as wide as the malls themselves. City officials seem confident they can get it built by 2022.

To do so, the city is seeking another $40 million from a variety of public and private sources. The land bridge, also dubbed "Mall D," would replace the now-closed pedestrian bridge that has connected Mall C (above the Huntington Convention Center, north of Lakeside Avenue) with First Energy Stadium and Cleveland Municipal Stadium before it.

Because of this connection, the Cleveland Browns are reportedly contributing funding to the land bridge and possibly to a partnership with Cumberland's lakefront development plans. The amount or conditions aren't yet known and the Browns aren't revealing anything yet. So far, Cumberland has built on the lakefront the two-story Nuevo Modern Mexican & Tequila Bar restaurant and the three-story, 16-unit Harbor Verandas apartment building at the foot of East 9th Street.

Cumberland Development's Harbor Verandas apartments over
retail are the latest phase of lakefront investments to turn North
Coast Harbor into more of a year-round setting (KJP).

Next phases for Cumberland and its partner Trammel Crow apparently include redeveloping two former Port of Cleveland warehouses into shops and restaurants. Full build-out shows 1,000 apartments, 80,000+ square feet of offices and 50,000 square feet of retail space. It also reportedly involves partnering with the Rock & Roll Hall of Fame and the Great Lakes Science Center on proposed museum expansions that would, among other things, connect their buildings with an enclosed, climate-controlled walkway.

Additionally, the latest of many iterations of a Lakefront Multi-Modal Transportation Center is part of the land bridge plan, sources said. The transportation center would unite Greyhound buses, Amtrak trains, Greater Cleveland Regional Transit Authority (GCRTA) buses and trains and possibly other regional transit agency buses.

Looking east toward East 9th Street from near the Amtrak train
station, and possibly from below where a new land bridge/Mall D
could be built, the Greyhound bus station portion of the planned
Lakefront Multi-Modal Transportation Center is seen. The Shore-
way is to the left and the rail tracks are to the right (CPC).

The 700,000+ combined annual passenger boardings (includes an anticipated 20 percent boost thanks to more convenient transfers between trains and buses) at this hub in downtown Cleveland would, for context, exceed the 619,000 enplanements at Akron-Canton Regional Airport in 2017. It would also exceed the attendance of 526,000 people at Cleveland Browns home games last year. With that kind of 24-hour, 365-days foot traffic, it could certainly attract a cafe, newsstand and possibly a convenience store that would also be supported by existing and planned lakefront tourism, housing and maybe a hotel.

The most recent plan has a refurbished Amtrak station and new Greyhound station built along and south of the Shoreway. The Greyhound station was assumed to be built in such a manner so that it could support a small building built above it, such as for a hotel, offices or residential. The transportation center at full build-out is estimated to cost less than $70 million. The Northeast Ohio Areawide Coordinating Agency, which oversees federal transportation spending in Greater Cleveland, has included the Lakefront Multi-Modal Transportation Center in its current funding priorities.

The city's most recent plan for a Lakefront Multi-Modal
Transportation Center with a possible location for the newly
proposed land-bridge/Mall D concept added (CPC/KJP).

In 1998, one of the most exciting variations of the lakefront multimodal transportation center was proposed (See the 1998 plan's Executive Summary here). Called the North Coast Transportation Center, it featured an enclosed station over the Norfolk Southern/Amtrak and GCRTA tracks plus a roadway for buses with a green roof that was nearly as wide as Mall C to the south. It could even feature meeting spaces to expand the convention center. In other words, it would provide indoor and outdoor pedestrian linkages between the central business district and North Coast Harbor.

Other transportation linkages are possible with this site. For example, the public transit advocacy group All Aboard Ohio has proposed a waterside terminal in Cleveland (possibly in the harbor) where high-speed catamarans could take passengers to Port Stanley or Shrewsbury to board Ontario's planned high-speed trains and be in downtown Toronto in less than four hours.

The 1998 plan for the North Coast Transportation Center that
would also feature a green roof and thus serve as Mall D over
the tracks and end at a boulevard that would have replaced
the Shoreway highway. A new lakefront hotel and parking
garage was also envisioned in this amazing plan (GCRTA).

Realizing the 1998 transportation center plan would cost about $200 million in today's dollars. But the $25 million already in hand could be used to fund the design/engineering and environment approvals. Then the city would be in a position to apply for and secure a no-match federal Railroad Rehabilitation & Improvement Financing loan (for which there is still $29 billion in direct loan authority remaining) to pay the entire cost of a transportation center. A $200 million loan would cost the city about $10 million per year. By the way, the $10 million per year to service debt that built First Energy Stadium in 1999 ends in 2028.

"Seems like a no-brainer" to debt-finance the land bridge incorporated with a transportation center, said one planner involved with the city's lakefront projects who spoke off the record. "But everyone is waiting around for a grant. We need to just do it and pay it back over time."

END