Rivian looking more likely to buy & use Cleveland-area Ford plants

More information is pointing to electric vehicle manufacturer
Rivian as the possible buyer of both of Greater Cleveland's
vacant Ford plants. This is Rivian's headquarters, located in
the Detroit suburb of Plymouth, MI (Rivian).
CLICK IMAGES TO ENLARGE THEM

Several thousand new, well-paying jobs appear to be bound for Greater Cleveland which could become a hotbed of Electric Vehicle (EV) production for many years to come. That's based on recent news and tips from a couple of insider sources.

In a NEOtrans article posted Sept. 23, I speculated that EV startup Rivian may be the likely buyer of two Cleveland-area plants mothballed by Ford Motor Co. One is the 1.7-million-square-foot Brook Park Engine Plant No. 2 that closed in 2000 and the other is the 2.1-million-square-foot Walton Hills Stamping Plant that closed in 2015.

That speculation could be a realistic outcome considering several recent developments.

A source familiar with the two factories said that Ford is going through the Ohio Environmental Protection Agency's (EPA) Voluntary Action Program (VAP) for the vacant Walton Hills plant. The VAP process would start by the end of this year or early next year for the Brook Park Engine Plant No. 2. An Ohio EPA spokesman confirmed this.

The VAP process starts when a property owner submits environmental data for Ohio EPA to review and determine if any environmental contamination exists and needs to be cleaned. Afterwards, if the property is found to be clean enough to meet Ohio EPA standards, the property owner would receive a covenant not to sue.

Ohio EPA says this covenant protects the property owner or operator and future owners from being legally responsible to the State of Ohio for further investigation and cleanup. For the subject of this article, it is important to note this protection applies only when the property is used and maintained in the same manner as when the covenant was issued.

In other words -- these are still auto manufacturing plants, albeit vacant, and would remain as auto plants. Furthermore, the source said Ford doesn't intend to demolish the vehicle production-related structures on these properties. The source didn't reveal the buyer. The Ohio EPA spokesman said Ford didn't reveal the buyer to them either.

However, the source said that Ford wanted to get the VAP process done quickly because the buyer for both plants is on a timeline.

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

So if the two properties would continue to produce new vehicles or parts for vehicles under the new ownership, who would the buyer be? Ford wouldn't sell to a competitor. Instead, it would likely be a firm with whom Ford has a partnership.

Volkswagen is one possibility. Ford and VW announced in January that they are joining forces on delivering medium-sized pickups for global customers starting in 2022. But the production facility for that has already been identified. It will be in Chattanooga, TN.

Then in July, Ford and VW expanded their partnership to include equal investments in Argo AI, an autonomous vehicle platform firm with dual headquarters in Munich, Germany and Pittsburgh, PA.

But the scale of Argo AI's facilities for producing software and computing equipment will likely be much smaller than two auto plants totaling nearly 4 million square feet. And multiple reports say a single buyer will acquire both of Greater Cleveland's two vacant Ford plants.

That brings us to Rivian.

The start-up EV manufacturer has developed a revolutionary electric engine and vehicle frames. Rivian's engines offer remarkable performance of 0-60 mph in three seconds and fossil fuel-competitive ranges of 400 miles or more per charge.

Rivian's flexible frames will be used not only in its vehicles but also in Ford's new EV products. Ford was so impressed with Rivian that it invested $500 million in the start-up firm which has yet to mass-produce any vehicles. Rivian has acquired a former Mitsubishi factory outside of Normal, IL and expects to begin mass production of EV pickups and SUVs in 2020.

But that doesn't address Ford's desire for mass quantities of Rivian's so-called "skateboard platform" vehicle frames (the chassis looks like a skateboard) for its as-yet-unidentified new EV line. Nor does it take into account Amazon's order to Rivian for $10 billion worth of electrically powered delivery trucks.

To consider the scale of production facilities needed, the 3.7-million-square-foot Ford Avon Lake, OH plant produces 370 truck chassis a day. That's 128,000 to 135,000 chassis per year. That's just chassis.

Rivian acquired and re-tooled a 2.6-million-square-foot
former Mitsubishi plant near Normal, IL where it will
produce its first two vehicle lines. But that doesn't take
into account where it will manufacture enough frames
for Ford's new line of electric vehicles that may be
produced at new facilities in Avon Lake (Rivian).

Speaking of Avon Lake, Ford and the United Auto Workers announced Nov. 1 a $900 million investment to expand the factory to accommodate a product line that would create more than 1,500 permanent jobs for Greater Cleveland.

This week, Crain's Cleveland Business reported that the product line would be Ford's new but unidentified EV -- likely the product line that would use Rivian's skateboard platform.

"Ford intends to develop a new vehicle using Rivian’s flexible skateboard platform," Ford said in a written statement released in April when it announced its investment in Rivian. "This is in addition to Ford’s existing plans to develop a portfolio of battery electric vehicles" including a Mustang-inspired crossover and a zero-emission version of the F-150 pickup.

Ford's investment represents a little less than a 10 percent stake in Rivian. As part of the deal, Joe Hinrichs, Ford’s president of Automotive, will join Rivian’s seven-member board.

"I think we have a winner with the Rivian pick" to buy the two Ford plants, said a business investor with ties to Greater Cleveland who is familiar with Rivian. "If in fact Rivian takes the two Cleveland plants from Ford, I'd bet the payment will be some form of equity."

Putting Rivian's chassis production facilities and Ford's new EV production facility close to each other probably makes logistical sense. Also, it is interesting to note that Ford's facilities in Walton Hills, Brook Park, Avon Lake and even Rivian's Normal plant are all on Norfolk Southern Corp. rails, simplifying the production process.

Greater Cleveland appears to have the inside lane on the future of automotive technology -- EV production -- because it has two large, mothballed, yet well-maintained auto-making facilities in close proximity to each other. And it has a workforce that knows how to build stuff, especially cars.

It is rare for a region to get a large, closed automotive plant back up and running, let alone two.

END

Two sources: Sherwin-Williams chooses its HQ+R&D site

Two high-level sources say that Sherwin-Williams will build
its massive new headquarters plus research and development
facilities on 8 acres of parking lots to the west of downtown
Cleveland's Public Square. SHW has been planning its new
HQ+R&D for more than a year. However, construction isn't
likely to start until early-2021 with completion due sometime
in 2023 (Google). CLICK IMAGES TO ENLARGE THEM

[UPDATED 11-07-19]

Regarding one of Cleveland's most anticipated real estate developments in many years, two high-level sources say that Sherwin-Williams (SHW) has chosen its site for a combined headquarters plus research and development facility.

That site is the 7.93-acre swath of parking lots owned by the Jacobs Group and Weston Group, just west of downtown's Public Square.

The sources who contributed information to this article requested anonymity because they aren't authorized to speak publicly about the project. However, both sources are very close to and familiar with the HQ+R&D decision-making at SHW.

SHW has had a contract to buy the Weston lots for months, a third source said. While that doesn't guarantee that SHW would see that contract through to a sale and deed transfer, it does mean that SHW didn't want anyone else to have a shot at buying some or all of the Weston lots while SHW did its due diligence in the HQ+R&D search.

If SHW found a better site or found fault with the Weston lots, they could walk away from the contract and Weston would be free to negotiate with any other potential buyers. I don't know if SHW had a similar deal pending with the Jacobs Group for its Public Square property, but it probable that it did.

One of the sources stated that "the Weston lot excites them (SHW) as an opportunity to make a revolutionary sort of campus." The source said the other sites were more difficult to work with in achieving SHW's vision of a connected urban campus.

The other source confirmed details previously reported only at NEOtrans about the scale of the project. The combined HQ+R&D would measure 1.8 million square feet, with 1.45 million square feet for offices and 350,000 square feet for R&D, the source said. Also, roughly 2,000 parking spaces could be included for up to 6,000 employees.

The HQ+R&D employees would include nearly all of SHW's 4,400 employees already in Northeast Ohio, plus hundreds more from around the country. Additional future growth would bring the total to 6,000 workers in the coming years. There are currently about 3,300 SHW workers located downtown.

Weston/Citymark's 2015 plan for the "Superblock" featured
a mixed-use vision of four buildings of 20 stories or more,
the tallest being 37 stories. SHW's HQ+R&D site would add
another acre with the inclusion of Jacobs' lot but feature
1 million fewer square feet of new structures (Weston).

Parking isn't calculated in the 1.8 million square foot figure. When added, it could bring the project's total size to approximately 2.5 million square feet. Although it is too soon to know about proposed building heights on the urban campus, sources previously said SHW isn't interested in an "iconic" tower exceeding 40 stories.

SHW hasn't announced or officially revealed anything publicly about the HQ+R&D project since Sept. 12 when it first acknowledged it was pursuing a new HQ+R&D, more than 10 months after NEOtrans first reported the HQ project on Oct. 31, 2018. But an announcement could come soon considering the speed at which SHW is moving.

Mike Conway, SHW's director of corporate communications, wasn't contacted for this article because of information he has relayed in the past. In researching a follow-up article in May about the planned HQ, he denied that SHW was considering a new HQ and then said the denial was off the record.

When asked why it was off the record, he said "Because there is nothing to write about." He also said that SHW hadn't considered a HQ project in 2014-15 either, which also was false. Conway was communications director in 2014-15, too. He is retiring at the end of this year.

Bedrock Cleveland hasn't been notified about SHW's decision to build at the Jacobs/Weston lots. A source close to their legal team at Taft Stettinius & Hollister LLP said they are continuing to pursue a SHW HQ as part of its riverfront phases of CityBlock. It was one of SHW's HQ site finalists.

One of the two high-level sources referenced at the start of this article said SHW made its decision to go with the Jacobs/Weston lots more than a week ago, which resulted in the hiring of geotechnical surveyors from Enviroprobe Integrated Solutions Inc. and Environmental Works Inc. to gather soil samples starting Nov. 2 from a dozen holes drilled into the 6.76-acre Weston lots.

SHW already has core samples from beneath the 1.17-acre Jacobs lot, resulting from their hiring of AECOM five years ago to plan for a 900,000-square-foot HQ tower there. That HQ project was shelved when SHW redirected resources to acquire its Minneapolis-based rival Valspar.

Geotechnical surveyors cordoned of areas of the Weston lots
over the the last few days to extract core samples of earth from
deep below this Warehouse District parking crater (KJP).

Enviroprobe and Environmental Works, both out-of-state geotech firms, were hired within days of the site decision.

SHW facilities consultant Welty Building Co. of Fairlawn bypassed locally popular geotech surveyors -- Intertek/Professional Service Industries, Inc., Terracon Consultants Inc., David V Lewin Corp., Solar Testing Laboratories, Inc., said another high-level source who wasn't authorized to speak publicly about SHW's project.

"Taking samples helps us determine the type of foundation systems that we can use," the source said. "It (the soil boring) needs to happen before any real design can start."

Design may have already started on the Jacobs lot tower. SHW hired Vocon Partners LLC as its HQ+R&D architect, which helped it research potential sites. A city source said final programming could lead to building massings and renderings being submitted to the City Planning Commission within several months.

However, final design will likely take more than a year due to the scale of the project. Construction could begin in 2021 and would likely continue for more than two years.

"Any transition to new facilities is not expected to occur until 2023 at the earliest and would require board approval," SHW officials said in their Sept. 12 press release.

An urban campus with public spaces where workers can have
lunch, recharge their creativity, meet colleagues or just enjoy
the city is what SHW appears to have in mind for the Jacobs/
Weston lots. This setting is what Weston/Citymark planned
for the same area four years ago (Weston). 

Through a request for qualifications process, Welty selected Gilbane Building Co. on Oct. 8 to join its development team as SHW's HQ+R&D construction manager. Welty previously worked with Gilbane and Vocon on building Goodyear Tire & Rubber Co.'s global headquarters campus in Akron. The team also added star-architect Gensler to design Goodyear's exterior.

When researching recently built corporate headquarters, SHW CEO John Morikis reportedly liked what he saw in Goodyear's HQ. In contrast, a source said Morikis did not like the design of and finishes in Eaton Corp.'s new headquarters in Beachwood.

Ironically, Morikis bought the vacant Bay Village land on which his new, $10 million lakefront mansion sets from Susan J. Cook, vice president of strategic facilities planning at Eaton Corp.

Cook was in charge of building Eaton's new HQ. Morikis moved earlier this year into the lakefront home that he and his wife built, which suggested that SHW wasn't likely to move its HQ out of Greater Cleveland.

SHW's first store opened at 118 Superior Avenue on the east
side of downtown Cleveland's Public Square in 1866. SHW
plans to start construction of its 21st-century HQ+R&D on
Superior on the west side of Public Square (SHW). 

SHW has been headquartered in the Landmark Office Tower, 101 W. Prospect Ave., since 1930. It occupies about 800,000 square feet of the 900,000-square-foot building and outgrew it in 2014 when it began leasing 51,810 square feet of space in the neighboring Skylight Office Tower.

In 2017, after acquiring Valspar, SHW leased a 151,830-square-foot office/flex space at 4770-4780 Hinckley Industrial Parkway in Cleveland. There, it houses several hundred workers in office spaces that SHW renovated.

One of SHW's oldest facilities is the John G. Breen Technology Center, built in 1948 but was doubled in size in 1998 to 140,293 square feet. It was built next to SHW's pre-1930 headquarters and where SHW was founded in 1866. Today, it is the workplace for about 400 researchers and scientists.

The Breen Center is so full that most of Valspar's R&D staff remain in a 170,000-square-foot complex in Minneapolis. Interestingly, adding the floor space of SHW's R&D facility to that of the former Valspar R&D equals roughly 310,000 square feet. Adding 40,000 square feet of elbow room and expansion space would equal the 350,000 square feet desired for SHW's new R&D facility.

By 2023, the Jacobs lot on the west side of Public Square
and the parking lots beyond it on the Weston "Superblock"
will have significant buildings on them, hosting thousands
of jobs and reviving a part of downtown that hasn't thrived
since the early 20th century (Google).

The Weston "Superblock" is surrounded by Superior and St. Clair avenues, plus West 3rd and West 6th streets in the Warehouse Distrct. Four years ago, Weston and Citymark Capital LLC planned 3.5 million square feet of residential, offices, a hotel plus shops and restaurants. To guide the development, the city enacted at Weston's request a pedestrian-retail zoning overlay for the Superblock in 2016.

The site has been mostly parking lots since the mid-1970s when the nearby Justice Center was built with insufficient onsite parking. Dozens of 19th-century buildings were razed. The Justice Center is the subject of a study by the county to determine whether to rebuild it or construct new jail and courthouse facilities elsewhere.

The Jacobs lot, on the west side of Public Square, has been surface parking since 1990. That's when the 13-story 33 Public Square building and the 12-story One Public Square building were demolished for the 1,198-foot-tall, 60-story Ameritrust Center tower. But the tower project was canceled before construction could begin when Society Bank acquired Ameritrust.

At long last, it appears this massive parking crater that has scarred downtown for decades may finally be developed. It should also be noted that real estate investors, aware that SHW's HQ+R&D could land here, have shown interest in neighboring properties. Expect those properties to change hands and for developments to be announced for them in the coming days, weeks and months.

END

Sherwin-Williams drills down on data for HQ sites

Geotechnical survey crews descended upon the Weston Group-
owned parking lots in downtown Cleveland's Warehouse Di-
strict Nov. 2-3 (KJP). CLICK IMAGES TO ENLARGE THEM

Identifying where Sherwin-Williams' (SHW) massive headquarters plus research and development (HQ+R&D) facilities might land requires lots of information. And the global coatings giant gathered a lot more detail this weekend.

Survey crews on Nov. 2-3 fanned out across 5.6 acres of parking lots owned by the Weston Group, a couple of blocks west of downtown Cleveland's Public Square.

In what's called the "Superblock," surrounded by Superior and St. Clair avenues, plus West 3rd and West 6th streets, geotechnical survey workers from Enviroprobe Integrated Solutions Inc. and Environmental Works Inc. labored in a cold drizzle. The brawny crews bored perhaps a dozen holes deep below the asphalt of the entire Superblock and extracted core samples.

The broad area of sampling suggests a massive development over the whole Weston Superblock. A source close to the HQ property negotiations says that "the Weston lot excites them (SHW) as an opportunity to make a revolutionary sort of campus."

SHW already knows a lot about the 1.17-acre Jacobs Group-owned lot on the west edge of Public Square. It's where the Fortune 500 company planned to build a new, 900,000-square-foot HQ tower in 2014-15 until it redirected its resources to acquire rival Valspar.

When Weston-Citymark planned to develop the Superblock
according to their vision, they imagined three 20- to 25-story-
tall towers on the site with a fourth tower being a 37-story-tall
office building. Sources say few if any SHW buildings on the
Jacobs/Weston lots would be so tall. That makes sense consi-
dering SHW's 1.8 million square feet would be spread across
more land than Weston-Citymark's plan for 3.5 million square
feet of office, residential, hotel and retail space (Weston).

Just five years ago, SHW hired civil engineering firm AECOM to help it plan a new HQ. As part of its fact-finding, AECOM subcontracted with a geotechnical driller to gather soil samples all the way down to bedrock, some 200 feet below the Jacobs lot.

Today, SHW is a larger, faster-growing company. Not only are its HQ needs much larger. This time, with Valspar's R&D workers in Minneapolis unable to unite with SHW's research workers in Cleveland's overcrowded John G. Breen Technology Center on Canal Road, a new or expanded R&D facility is in the cards too.

Combining the HQ+R&D brings the scale of the project to 1.8 million square feet (not including parking), per a request for qualifications by SHW's facilities consultant Welty Building Co. for construction management services for some or all of SHW's HQ+R&D. Two sources say Gilbane Building Co. won the bid on Oct. 8.

But Bedrock Cleveland, which owns Tower City Center and its Riverview parking lots plus other parcels between Huron Road and the Cuyahoga River, is the leading competitor to the Public Square site that SHW had long desired.

Bedrock is making a strong pitch to SHW. And it can tell SHW what the earth looks like far below the surface of its properties because it gathered soil boring data several years ago when it planned to build the phase two casino south of Huron.

Geotechnical survey crews began taking core
samples at Weston's Superblock Nov. 2. Here,
crews worked near St. Clair Avenue and West
6th Street (UrbanOhio/Cleveland95).

So the only place where SHW doesn't have good soil data below its final, desired sites for its HQ+R&D is at the Weston lots -- until now. Despite the impressions from well-informed sources, the surveying work this weekend shows that SHW may not yet be favoring one of the two final sites.

"Taking samples helps us determine the type of foundation systems that we can use," said a high-level source who wasn't authorized to speak publicly about SHW's project. "It (the soil boring) needs to happen before any real design can start."

And knowing what type or scale of foundations are needed will establish a baseline of costs for comparing the Jacobs/Weston and the Bedrock sites. So will the actual value of the land involved.

Unlike 2014-15, SHW has added a new/larger R&D facility to go along with a new HQ. So more land than just the Jacobs lot would be needed this time around. That's why the Weston lots are in play, offering a 6.77-acre site by combining the Jacobs/Weston lots for the HQ+R&D.

The riverfront site is even larger. SHW already owns 9.2 acres of riverfront land for the Breen Center, next to the 2.7 acres of land Bedrock is offering between Huron and Canal, just east of the Carl B. Stokes U.S. Courthouse tower. For either site, a large amount of downtown land is involved and it is expensive.

Geotech crews moved their way south to alongside and then
beyond Frankfort Avenue which divides the Superblock in
half. Usually, a geotech survey crew pokes a few holes in
the ground at a proposed development site. These crews
drilled perhaps a dozen such holes over a 5.6-acre area,
suggesting a very large development project (KJP).

The Jacobs/Weston lots are appraised by the county for tax purposes at about $4 million per acre, which is based on the most recent, comparable property sales in that area. By comparison, Bedrock's Riverview parking lot currently is valued at $2.4 million per acre. But it was valued by the county at $5.26 million per acre as recently as 2014.

In the past week, several insider sources were equally split on which site had the edge. But all agreed that SHW was close to nailing down its preferred location for an HQ+R&D. That facility would become the workplace for up to 6,000 employees in the coming years.

This weekend's activity shows how refined that data gathering process has advanced. In the end, SHW may have requested the geotech work to either justify sticking with a long-desired site or to eliminate it from further consideration.

END

Sherwin-Williams HQ+R&D is down to two sites; decision due soon

This unofficial massing represents how Sherwin-Williams' new
headquarters and new/renovated research facilities (all shown
in dark orange) might appear if built on Bedrock Cleveland's
and SHW's properties between the Cuyahoga River and Tower
City Center in downtown Cleveland. It also shows, to the right
of the increasingly likely SHW site, apartment, hotel and office
buildings that represent later phases of Bedrock's CityBlock
development (Geowizical). CLICK IMAGES TO ENLARGE

A source close to ongoing property negotiations said Sherwin-Williams could decide in "the next week or so" between two downtown Cleveland sites for its new global headquarters plus research and development facility.

Officially, SHW has held steady to its official statement that it will announce its HQ+R&D site decision by the "end of this year or early 2020."

However, the source said SHW's decision is now down to two sites and may be leaning toward one of them:

1. Bedrock/SHW riverfront: The site includes about 2.7 acres of Bedrock Cleveland-owned land, between Huron and Canal roads, and between the Carl B. Stokes U.S. Courthouse tower and the Tower City Center Riverview entrance. Next to it, SHW owns 9.2 acres between Canal and the Cuyahoga River. It is where SHW's John G. Breen Technology Center is located and where SHW was founded 153 years ago.

2. Jacobs/Weston: West of Public Square, a total of 6.77 acres of parking lots owned by the Jacobs Group and the Weston Group would provide the site for a connected, urbanized office campus. It would be fully integrated into the amenities of a major city's central business district. Cuyahoga County officials apparently are interested in this site for a new Justice Center complex, as well.

The source believed that the Bedrock/SHW riverfront site had the advantage for several reasons.

"They (Bedrock) can move quicker, they can take a lower return since Dan Gilbert is a multi-billionaire, and it will also tie better into CityBlock, giving that some life," the source said. "I think there's enough of a push politically by Bedrock and the CityBlock team that will probably get it done."

Another view of the unofficial massing, showing a possible
juxtaposition of new and renovated SHW buildings in dark
orange at the riverfront site. To their right or east are four
buildings that could become the later phases of Bedrock's
CityBlock development. To the right of them are new and
planned buildings by Stark Enterprises (Geowizical).

Previously, NEOtrans reported that SHW had narrowed its HQ+R&D search down to four downtown Cleveland sites.

In 2014-15, SHW had completed civil engineering and architectural work for a 900,000-square-foot headquarters on the Jacobs lot on Public Square. That effort was shelved as SHW worked to acquire rival Valspar.

This time around, SHW, led by its facilities consultant Welty Buidling Co., is pursuing a 1.8-million-square-foot HQ+R&D complex, highlighted by a 40-story HQ tower. On Oct. 8, SHW through Welty chose Gilbane Building Co. as its construction manager, according to a high-level source.

That same source said that the HQ+R&D facilities would be immediately adjacent to each other, regardless of site, and accommodate up to 6,000 employees. About 3,300 SHW workers are currently employed in downtown Cleveland and another 1,100 elsewhere in Northeast Ohio.

If the Jacobs lot on Public Square was chosen for the HQ, then the R&D facility and all structured parking for the HQ+R&D would probably go on the neighboring Weston-owned lots in the Warehouse District. Yet there has been no chatter among insiders in Cleveland's close-knit real estate community that the Jacobs/Weston site was favored by SHW in this HQ endeavor.

Instead, a source said that the county and many influential law firms want a new Justice Center courthouse tower built within a few blocks of Public Square. Even with the jail possibly relocated out of downtown, the only undeveloped lands large enough and so close to Public Square are the Jacobs and Weston lots.

Any deal that might be part of a new Justice Center is still years off as the county has yet to decide its course of action. But it could be enticing to Weston and/or Jacobs to accommodate a new courthouse tower if the county buys their land and, in exchange, gives the keys to the old Justice Center complex to rebuild or raze it for new development.

Adding 1.8 million square feet of new HQ+R&D facilities for
SHW just west of Public Square could require more significant
new construction yet fill downtown Cleveland's largest parking
crater. But developing that 7 acres of parking lots may have to
wait for a decision by county officials on whether to build a
new Justice Center courthouse tower (Geowizical).

Meanwhile, relocating to the Bedrock/SHW site would be less disruptive to SHW. It could use its existing parking, albeit expanded. And it could allow SHW to modernize and expand its existing, 140,000-square-foot R&D facilities at the Breen Center. Without it, SHW would have to build an entirely new R&D facility measuring, by some estimates, up to 350,000 square feet.

How easy could relocating to the Bedrock/SHW riverfront site be for SHW? It could move its office furniture, equipment and materials without using trucks or even having to go outside. Passageways through Tower City Center would allow for such an indoors move.

Recent news has created a buzz around the Bedrock site. It started with CityBlock's announced $110 million first phase in The Avenue Shops at Tower City which is due to get underway in early 2020. The next phases of CityBlock, between Tower City and the Cuyahoga River along Huron and Canal roads east of SHW's Breen Center, may soon receive a jolt of capital.

Bedrock Real Estate exited its casino businesses including selling off and leasing back its Cleveland-area casinos, raising $843 million in capital in the process. That capital may stay with Rock Ohio Ventures, allowing it to develop the riverside phases of its CityBlock project.

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

This massing by Vocon, SHW's and CityBlock's architect,
shows future phases of CityBlock immediately east of the
 site that some say has the lead in landing SHW's HQ. And
it is just east of SHW's existing R&D facilities that could
soon be expanded. This massing's view is cut off right at
the edge of a candidate SHW HQ+R&D site (Vocon).

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

Several large buildings are proposed by Bedrock adjacent to and east of the site that SHW is weighing. They were included in a massing for Bedrock by Cleveland-based Vocon Partners LLC, which is also SHW's architect. The massing represented potential future work by Bedrock above the river but south of Huron Road, including offices, apartment buildings and hotels, according to another source.

It should also be noted that the law firm guiding SHW's HQ+R&D project -- Korman, Jackson & Krantz LLP -- is the same law firm assisting the CityBlock effort. But it is not the same law firm representing Bedrock Cleveland in its negotiations with SHW. Instead, that law firm is Taft Stettinius & Hollister LLP.

More news this week pointed to increased buzz surrounding the CityBlock site. The London Stock Exchange Group's Elite Initiative, an international business support program, chose Cleveland for its North American headquarters. A source close to Bedrock's CityBlock project was hopeful that Elite would soon sign a lease at CityBlock for its HQ.

In the early 1970s, SHW's 19th-century HQ and factory in the
foreground still stood next to its 1948 research facilities that
would be expanded in 1998. This view looks west from SHW's
post-1930 HQ in the Landmark Building. Scranton Peninsula is
at left and Ohio City is beyond the many bridges (SHW).

Lastly, just across the river, NRP Group is finalizing its designs for 330 residences on Scranton Peninsula. NRP Group usually goes where the action is or is going to be. But what action exists on Scranton Peninsula -- currently a desolate, 80-acre blank slate of land?

None, but the calculus changes dramatically if a Fortune 500 company builds a massive new facility just a half-mile walk away. NRP Group reportedly was aware that the Bedrock/SHW riverfront site was seriously being considered by SHW for many months.

A real estate development source with intimate knowledge of downtown Cleveland projects pointed to the developments at and near Bedrock's CityBlock and its legal and architectural linkages to SHW as intriguing. He argued that it reinforces what the source close to the SHW negotiations believed -- the Bedrock site had the edge for SHW's HQ+R&D.

"At this point, I would be shocked if the Bedrock site wasn't selected," he said.

END

TMUD tax credit could be law in November; help big Cleveland projects

Stark Enterprises released a new presentation for its $350
million nuCLEus development in downtown Cleveland on
Oct. 22 -- while new life was breathed back into legislation
that would benefit nuCLEus and other Ohio mega projects
(Cresco/Loopnet). CLICK IMAGES TO ENLARGE

Skyline-changing legislation has suddenly sparked back to life in the Ohio legislature. Substitute Senate Bill 39, to create a tax credit for insurance companies to invest in Transformational Mixed Use Developments (TMUDs), could aid several big real estate developments in Cleveland.

If the legislation continues on what appears to be a new, fast track, it could become law as early as next month.

There was little visible activity surrounding Sub. SB 39 since it passed the Ohio Senate 32-1 on June 25. It was introduced into the House of Representatives the following day. But there had been no action on the bill since it was referred to the Economic & Workforce Development Committee on June 30.

That changed this month when three hearings were scheduled, with Sub. SB No. 39 being the only legislation on the committee's docket. The bill could be reported out of the committee as early as Oct. 30 or Nov. 6 for a vote by the full House, with as many as a half dozen House sessions available in November for the House to pass it.

The House may move the bill quickly as it had already passed a similar bill, House Bill 469, last year by a 91-0 vote. It came after six hearings over two months in the House Government Accountability and Oversight Committee. But the legislative session expired before the Senate could pass it.

Originally drafted by Thompson Hine LLP at the request of Stark Enterprises, the legislation would allow an insurance company investor to fill a missing piece in the capital stack for Stark's nuCLEus development in downtown Cleveland. In fact, a source said the $350 million, 2-million-square-foot project couldn't move forward without it.

The level of detail in Stark's newest presentation about its
nuCLEus development is omnipresent. So is the fact that
it centers on the commercial uses in the new-construction
project for which there are few public-sector incentives
from the city and others (Cresco/Loopnet).

Perhaps coincidentally, and with the legislation showing promise of passage, Stark's real estate broker Cresco released on Oct. 22 a new nuCLEus presentation with more detailed images about the project.

The presentation heavily promoted the office building, more half of which is already spoken for by prospective tenants. And it promoted specific retail spaces, the rentable areas of those spaces, and noted that the spaces would become available in "March 2020." While tax abatement is available from the city for residential real estate it is not available for commercial development.

Ezra Stark, chief operating officer, of Stark Enterprises did not respond to an e-mail seeking comment for this article.

NuCLEus is proposed to feature two 24-story buildings, one for residential and the other for offices, atop a muli-story pedestal of parking and retail between Prospect Avenue and Huron Road at East 4th Street. NuCLEus is pursued by a partnership called Gateway Huron LLC, comprised of Stark Enterprises and J-Dek Investments Ltd.

For a development to be considered a TMUD it must include a mix of land uses, have a development cost of more than $50 million and be 15 or more stories in height or at least 350,000 square feet. The bill authorizes a nonrefundable insurance company tax credit of up to 10 percent of total eligible project costs for contributions of capital to eligible projects.

The transformational aspects of the nuCLEus development
are also emphasized in Stark's latest presentation, which is
no coincidence since sources say the downtown Cleveland
mega project can't proceed with the proposed transforma-
tional tax credit (Cresco/Loopnet).

NuCLEus would likely qualify, but a number of TMUD credits per year still has to be authorized by budget corrections language that has yet to be introduced to the Ohio General Assembly. Then, nuCLEus would have to be one of the limited number of projects certified by the state's Director of  Development Services as eligible for the tax credit.

Ohio Senator Kirk Schuring (R-29, Canton) is sponsoring Sub. SB 39. The bill has 18 bipartisan co-sponsors. Schuring delivered his sponsor testimony Oct. 16 to the House Government Accountability and Oversight Committee.

"Sub. SB 39 will have a catalytic effect on the surrounding areas where these mega projects are constructed," Schuring testified. "It will trigger an economic chain reaction that truly will be transformational, fostering new retail establishments, new office buildings, new residential facilities and new entertainment venues. In short, it will be a vibrant place where people will want to live, work and play."

It isn't known if the new Sherwin-Williams (SHW) headquarters and research & development facilities, likely to be built in downtown Cleveland, would be eligible for the TMUD tax credit. It has been assumed that SHW would pay for the roughly $1 billion project from its own significant net cash flow, which is nearly $2 billion per year.

But if an insurance company did invest in SHW's new HQ+R&D under the TMUD program, it could create a roughly $100 million public incentive to build the anticipated 1.8-million-square-foot project in Ohio. Sources say that up to $200 million in public incentives from the city, county and state were pledged to SHW to build its new HQ+R&D in Cleveland.

A week after Senator Schuring testified, on Oct. 23, Frank Sinito, CEO of Cleveland-based Millennia Group of Companies, testified before the committee that redevelopment of its 1.3-million-square-foot Centennial building couldn't happen without Sub. SB 39. The Centennial is the former Huntington Bank building at 925 Euclid Ave.

Redevelopment of  the 1.3-million-square-foot The Centennial
in downtown Cleveland could also benefit from the proposed
TMUD tax credit. The legislation was written so it could aid
new-construction megaprojects, but it could also help a few
large-scale historic redevelopments (Millennia).

He noted that, as opposed to new construction, the redistribution of mechanical, electrical, plumbing and other circulation systems throughout an existing building is extremely challenging and "far exceeds" the cost of new construction.

The renovation of existing buildings often results in much lower efficiency factors in the range of 65 percent as opposed to new construction which is usually 85 percent and above. Of the 1.3 million square feet in The Centennial, over 350,000 square feet is non-income producing circulation and other space.

"The rents from the other income-producing areas of the building simply are not sufficient to subsidize the costs associated with these very large but non-income-producing areas of the building," Sinito testified.

"So, given these realities, it is very important to see -- and I think it becomes quite clear -- that existing buildings often have an even greater need for the type of financial assistance that SB 39 is intended to provide than new construction does," he added.

In his testimony before the Senate Finance Committee in April, Stark Enterprises CEO Robert Stark said that the TMUD tax credit wouldn't be a replacement for the limited-duration and since-expired "catalytic" historic tax credit. Instead, it would apply equally to new construction and foster investment in the future of Ohio's cities.

"We're seeing an international phenomenon of re-urbanization," Stark said. "We're faced with attracting and keeping the best and the brightest. To do that requires a culture of an interconnected, collaborative society and undoing the isolationism of sprawl."

END

Cleveland neighborhoods win $9 million to boost development

The Buckeye-Kinsman is one of Cleveland's neighborhoods
that will benefit from new funding to improve housing, work-
force development, access to living-wage jobs and fresh food,
as well as support of small businesses and minority entrepre-
neurs (Google). CLICK IMAGES TO ENLARGE THEM

Cleveland Development Advisors today announced $9 million in new commitments to help stimulate projects with measurable social impacts in the Cleveland neighborhoods of Clark-Fulton, Glenville and Buckeye-Kinsman, and the immediately surrounding areas.

JPMorgan Chase is investing $5 million over three years to expand access to opportunity in Cleveland's target neighborhoods so more residents can share in the rewards of a growing economy. This investment is part of the company's sixth Partnership for Raising Opportunity in Neighborhoods (PRO Neighborhoods) competition to support neighborhood development projects and promote inclusive growth across communities in the U.S.

Cleveland is one of only seven winning submissions in this year's national competition for philanthropic funding. Overall this year, JPMorgan Chase received 75 applications covering 49 U.S. cities to support capital and planning projects. The successful application was submitted by Cleveland Development Advisors, the real estate and business development financing affiliate of the Greater Cleveland Partnership, and Finance Fund Capital Corporation, a nonprofit real estate developer serving Ohio.

Cleveland Development Advisors will add $3.75 million to JPMorgan Chase’s commitment, and form and oversee a revolving loan fund that will offer qualifying developers financing at below market lending rates. Finance Fund Capital Corporation will provide real estate technical assistance.

These neighborhoods have an average poverty rate of 44 percent and an unemployment rate of 25 percent, which exceeds the city’s overall poverty rate of 31 percent and jobless rate of 18 percent.

The nearly $9 million in commitments will be coupled with other incentives to attract projects that residents of the neighborhoods have identified as top priorities:  affordable housing, access to fresh food and greenspace, access to living wage jobs, workforce development, digital connectivity and support of small businesses and minority entrepreneurs.

"This commitment from JPMorgan Chase and the matching loan funds from Cleveland Development Advisors will give us another significant tool to leverage new investments aimed at benefitting residents of the Clark-Fulton, Glenville and Buckeye-Kinsman neighborhoods," Mayor Frank Jackson said. "These funds will complement my Neighborhood Transformation Initiative, which has designated all or parts of these neighborhoods for economic development funding and other assistance."

NRP Group is building a $60 million mixed-income apartment
complex in the Clark-Fulton neighborhood. The new funding
awarded today can help put more opportunities within walking
distance of this and other new housing developments (RDL).

"Helping more people share in the rewards of a growing economy is critical for the long-term viability of Cleveland," said Rudy Bentlage, Market Leader for JPMorgan Chase in Northeast Ohio. "We have an important role in working with the local leaders and community partners to identify solutions that promote growth, development and collaboration. This investment is a great example of this partnership at work and we’re proud to work with Cleveland Development Advisors to ensure that more residents have the resources they need to grow and thrive."

Yvette Ittu, Cleveland Development Advisors President, said the new funds will help to attract additional incentive financing including Opportunity Zone funds to these neighborhoods. Federally-sanctioned Opportunity Zones offer tax breaks for investors as an incentive to attract and assist development projects in designated areas.

"We're very focused on trying to attract projects to these neighborhoods that will improve the lives of the residents there," Ittu said. "These dollars complement our work, and our community's work, by strategically investing in neighborhoods that can benefit from it the most. This grant from JPMorgan Chase – when bundled with the city's incentives, other public and private monies and the Opportunity Zone designations – allows us greater ability to attract, encourage and assist investment and development to empower these neighborhoods."

Since 1989, Cleveland Development Advisors has invested nearly $450 million in more than 135 projects in Greater Cleveland that have resulted in 6,750 new housing units and seven million square feet of commercial space.

Cleveland City Councilman Blaine Griffin, whose ward includes a neighborhood selected for the new investments, lauded the announcement.

"This is great news for three Cleveland neighborhoods that have experienced years of abandonment, disinvestment and neglect," said Councilman Griffin. "And I commend JPMorgan Chase and Cleveland Development Advisors for this infusion of much needed capital that will surely help in the revitalization efforts already happening in these neighborhoods."

Finance Fund Capital Corporation has worked with Cleveland Development Advisors previously on a wide range of community development projects in the Cleveland area. The organizations will partner in working with the neighborhoods and local community development corporations including Famicos, MetroWest and Burten Bell Carr.

"This investment from JPMorgan Chase gives us another opportunity to work successfully with Cleveland Development Advisors to help create positive change in Cleveland neighborhoods driven by local residents," said Diana Turoff, President and CEO of Finance Fund Capital Corporation. "Our past working relationships with Cleveland Development Advisors and neighborhood organizations in Cleveland give us a strong foundation upon which to build. We look forward to working with them as well as local residents and leaders to cultivate sustainable growth in these three neighborhoods."

The Glenville, Clark-Fulton and Buckeye/Kinsman neighborhoods were chosen by the applicants for the Chase grant application based on a study by Cleveland State University that identified areas in Cleveland with Opportunity Zone designations where focused planning could attract private investment to the benefit of existing residents and businesses.

END

Lakewood's East End gets some refreshments

Developer Jim Miketo bought this Birdtown building whose
ground floor featured the Madison Bi-Rite until it closed two
years ago. This is what the building could look like with its
 white paint removed and the bricks restored to their natural
color (Cresco). CLICK IMAGES TO ENLARGE THEM

Several properties at Lakewood's East End have changed hands recently, resulting in new investments that are due to turn underutilized structures into productive buildings once again.

The latest and largest transaction occurred Oct. 16 when Jim Miketo, owner of Forest City Shuffleboard in Ohio City, acquired a three-story, 101-year-old, mixed-use building at 12501 Madison Ave., county records show. It recently hosted the Madison Bi-Rite grocery store and Silhouette School of Dance.

Starting in mid- to late-2020, Miketo plans to transform the upper two-thirds of the 30,588-square-foot building into approximately 20 new apartments, according to real estate brokerage Cresco which handled the property sale. The rest, about 9,000 square feet, will feature ground-floor retail fronting busy Madison, the main street of Lakewood's Birdtown neighborhood.

Along with converting the property into apartments over retail, Miketo proposes to offer a new fitness center, dedicated parking, outdoor spaces for grilling and an expansive rooftop deck that promises to offer views of Lake Erie and downtown Cleveland's skyline.

“We are all about elevating historic neighborhoods and galvanizing communities while bringing new and unique developments to the area,” Miketo said in Cresco's Oct. 16 blog. “This property is a cornerstone building in a community that has incredible historic significance and a thriving demographic. We’re beyond excited to be able to contribute to such a beautiful neighborhood and help continue its rich legacy.”

This is how 12501 Madison Ave. looked until its grocery store
closed two years ago. It has sat vacant ever since (Cresco). 

The three-parcel property was acquired for $750,000 through a company named Little Jemmy, LLC that Miketo formed in July. The property was previously owned by Nicholas A. Sanfilippo's Mulberry Street Properties LLC, county records show.

Another important property sale took place in July. Gregory Rossi of Rocky River bought the property at 11824 Detroit Ave. that contained the former Maria's Roman Room restaurant for 44 years until it closed in 2005.

"He is opening a sports bar called the Ohio Inn," said Ward 4 Councilman Dan O'Malley. "When I talked to him over the summer, he was ambitiously hoping to open for football season. Obviously it's not yet open, but it's progressing."

Rossi has installed new windows and doors in the 96-year-old, 4,870-square-foot building that contains the restaurant on the first floor and apartments above. O'Malley said Rossi doesn't own any other restaurants or bars in the Cleveland area but said he may have owned an establishment previously in the Youngstown area.

According to LoveLakewood.com, Maria and Anthony "Chick" Bastulli owned and operated Maria's Roman Room for 44 years before she sold the restaurant business in early 2005 to Leonard and Olga Fink, according to Lakewood Patch. The restaurant has been closed since 2009. Maria Bastulli passed away in 2017.

The building at 11824 Detroit Ave. that was home to Maria's
Roman Room for 44 years until 2005. At left is the driveway
to the Value World store and municipal parking lot (Google).

County deed records show a company named Vibracorp, Inc. whose president was Angelo Gallo, acquired the property in 2012 for $110,000. Paul Colletti, owner of Brickhouse Bar and Grill in Slavic Village, tried in vain in 2013 to reopen the restaurant as a steakhouse called "Braised."

Rossi, under the name 11824 Detroit LLC, bought the restaurant property for $350,000 on July 10, according to Cuyahoga County records that were later corrected on Sept. 6.

Another property transaction occurred June 27 when the city acquired the closed Cove United Methodist Church, 12525 Lake Ave., for $900,000. The city had been looking for a large, underutilized property for it to build additional capacity for aging storm and sanitary sewers at Lakewood's East End.

With this large, 1.765-acre property, the city will be able to install an underground sewer retention tank and possibly retain the church for a future civic use like a community center. Or it could be demolished for development, considering the rising rents and low vacancies in the Gold Coast area. That will be decided after the sewer project, city officials said.

More refreshments are coming to the city's East End. City officials are planning some modest streetscape improvements in the Rockport area, including new pole-mounted traffic lights on Detroit Avenue for the Coutant Avenue and Ridgewood/Cove Avenue intersections as well as renovations to the pocket park on Clifton Prado, O'Malley said.

END