Burke Lakefront Airport ready for take off

Burke Lakefront Airport's proximity to
downtown Cleveland could beneficial to
more business travelers if Burke hosted
more flights. That's the goal, according
to a federal filing submitted recently by
a well-capitalized start-up airline (KJP).
CLICK IMAGES TO ENLARGE THEM

When closet urban planners consider open land for development in Cleveland, their attention often is directed at Burke Lakefront Airport. That isn't the only thing they direct at Burke. They also direct ridicule, scorn and even outright hatred for that 450-acre plot of former lakefront landfill that opened as an airport in 1948.

The reasons are many: Burke flight operations are down to fewer than 100 flights per day on average, a 60 percent drop compared to 20 years ago. It costs the city several million dollars per year to keep Burke open and operating. And its service as a reliever airport for Hopkins International Airport isn't justified when Hopkins' flight operations are down to a daily average of 350 flights vs. 500 in 2013 -- the last year of United Airlines' hub operation here.

That has led some to suggest reimbursing the Federal Aviation Administration (FAA) for roughly $10 million in capital improvements made at Burke in the 21st century and closing down the airport. Then the airport could be repurposed with a mix of real estate developments and public parks along Cleveland's most precious natural resource.

But what if someone wanted to actually use Burke for, say, an airport?

It's starting to happen with more air operations planned.

Prior to boarding, Ultimate Air Shuttle's morning flight to
Cincinnati Lunken Field sits on the tarmac at Burke Lake-
front Airport. The public charter operator will expand its
Cleveland-Cincinnati flight schedule in March (KJP).

The only airline serving Burke right now is Ultimate Air Shuttle -- a hybrid commercial airline and public charter operator that operates on published schedules. That's how passengers are able to avoid the security screening at larger airports handling common carrier airlines. There's also no checked baggage, which isn't really needed anyway since most customers are business travelers making same-day or, at most, overnight stays in their destination city.

Ultimate Air Shuttle is growing. It's based at Cincinnati's Lunken Field, once the city's main airport before Cincinnati/Northern Kentucky International Airport (CVG) opened during World War II. CVG saw its first commercial flight in 1947, an American Airlines DC3 from Cleveland, of all places.

Starting in 2009, Ultimate Air Shuttle has grown to offer five routes out of Cincinnati Lunken, including a twice-daily (weekdays only) schedule between Cleveland and Cincinnati. That service has grown so popular that it is starting a third daily Cleveland-Cincinnati flight on a midday schedule on March 16.

But the most exciting prospect is yet to come.

That prospect is coming in the form of a new start-up airline called Breeze Airways based in Salt Lake City, Utah. Jet Blue Airlines founder David Neelman has requested an Air Operating Certificate with the FAA and has identified airports it would like to serve. Reports are that Breeze would make T.F. Greene Airport in Providence, RI its hub.

Artist's rendering of a Breeze Airways Airbus A220-300 (Breeze).

On a map of prospective routes, it shows Providence flights to Orlando-Sanford, FL, St. Petersburg, FL, Oakland, CA, San Jose, CA, Contra Costa, CA, Orange County, CA, Burbank, CA, Ontario, CA and McClellan-Palomar north of San Diego, CA, Phoenix Mesa, AZ, Rocky Mountain Airport near Denver, CO, Concord near Charlotte, NC, Fort Worth’s Meacham Airport, TX, Baltimore-Washington, MD, Trenton, NJ, Stewart, NY (halfway between New York City and Albany), Republic Airport on Long Island, NY and Burke Lakefront Airport in Cleveland.

Ironically, Breeze has no plans to serve its home-base city of Salt Lake City. Some of the reporting on Breeze's plans seem to be vague on whether the new airline will serve cities like Pittsburgh, Cincinnati or Gary, Indiana to tap into Chicagoland.

Neeleman filed two applications to the FAA -- one in 2018 for an airline called Moxy which conflicted with a Marriott Hotel brand. That withdrawn application apparently didn't have Cleveland on it. But the 2019 application for Breeze did have Cleveland on the map.

The airline's goal is serve markets abandoned by the major airlines and many of the mid-size markets like Cleveland that were identified in Breeze's application certainly fall into that category. The airline plans to start this with regional flights in the Northeast. No start-up date or routes have been announced.

The proximity of Burke Lakefront Airport plus its 6,600-foot-
long runway and underutilized terminal to a fast-growing
downtown Cleveland, along with the neglect of some
Cleveland-oriented travel markets, has caught the
attention of Breeze Airways executives (KJP).

“There’s just a lot of scraps that the big guys have left,” Neelman told The Points Guy on Breeze’s network plans. “They’ve left a lot of city pairs, they’ve left a lot of other things untouched. I think we can fill that void nicely with the two aircraft types that we have coming.”

The aircraft types include a fleet of 28 120-seat Embraer 195s leased from Azul Brazilian Airlines, one of Neeleman’s five start-up airlines. The planes are due to arrive after April of this year. With $100 million in start-up capital, Breeze has ordered 60 Airbus A220-300s with up to 150 seats each; they are due to be delivered in April 2021.

What's interesting about the fuel-efficient A220-300 is that they have the range to link East Coast airports with many Western European ones. From the Providence hub, everything along and west of a Copenhagen-Frankfurt-Geneva-Barcelona line is within range of this aircraft.

Interestingly, so are places like Lisbon, Portugal and Dublin, Ireland within range of Cleveland by the A220-300. There is some speculation that Breeze will link up with other airlines owned by Neeleman, including TAP Air Portugal whose hub is in Lisbon. However, unlike Dublin, there is no U.S. Customs pre-clearance at Lisbon.

Flying into downtown Cleveland could soon become more
commonplace if a new start-up airline realizes its plans to
begin service to Burke Lakefront Airport. This is a view
from Ultimate Air Shuttle which offers the only public
flights in and out of Burke today (KJP).

Unfortunately, there is no formal Federal Inspection Services facility at Burke. Customs and Immigration clearance is conducted at Gate 4 of the terminal building but it requires a two-hour notice as no border patrol staff is assigned to Burke.

While it is unlikely there would be direct international service to Cleveland offered by Breeze, Neeleman is trying to fill in gaps in existing airline services. And direct flights between Cleveland and Europe is a known gap. One can hope.

But the possibility that Burke Lakefront Airport could again host a common carrier airline again is a potential boost to neighboring downtown Cleveland. It harkens back to the heady days of Wright Airlines, that was based at Burke from 1966-84.

At its peak, Wright served 17 destination airports, from the Midwest and Mid-Atlantic to the Northeast. That's the same area that Breeze apparently wants to start with, too. Keep an eye on Breeze and Burke. They soon may give Cleveland business travelers and local tourism a lift.

END

Ohio City's Church+State rising to be a Hingetown hub

Church + State rises above Detroit Avenue in the Hingetown
section of Cleveland's Ohio City neighborhood. The project
aims to be a focal point of Hingetown's residential, retail,
cultural, art, social and nightlife activities (KJP).
CLICK IMAGES TO ENLARGE THEM

After the first few minutes of talking with Graham Veysey, it's apparent that he appreciates cities and their primary purpose of causing personal interaction. In his businesses and neighborhood initiatives focused on the Hingetown section of Ohio City, he has attempted to spur more and different ways for people to interact.

Promoting opportunities for interaction abound in the design and construction of his latest and largest real estate development: Church + State.

The $60 million real estate investment is a partnership among Grammar Properties, Hemingway Development of Cleveland, Cedar Street Development of Chicago and Turner Construction. It is located near the intersection of Church Avenue and West 29th Street. West 29th was State Street before 1906 when Cleveland's north-south streets were given numerical names. Grammar Properties is a partnership of its own, between Veysey and his architect wife Marika Shioiri-Clark.

Leasing starts Feb. 22 for the 158 apartments in the two-building development. The leasing coincides with the Brite Winter Music & Arts Festival to be held Feb. 22-23 on the Flats West Bank where Church + State will be promoted.

Views from atop Church + State of downtown, Lake Erie and
surrounding area can be had from both State (11-story building)
and Church (six-story building) from the fourth floors up (KJP).

The 11-story building is called State, opening in August; its six-story neighbor is Church, opening in June. Between them is Church + State Way, a public, open-air atrium measuring 10,000 square feet. Veysey said it's larger than Market Square Park across West 25th Street from the West Side Market.

Church + State Way's public accessibility is exemplified in that Ohio City Inc.'s Clean and Safe program, funded by the neighborhood's special improvement district, will oversee this public space, Veysey explained.

The atrium, where interaction is encouraged by design, has lots of interactive features sought by young people. It has everything from a 10-spout water park/fountain, sitting steps for performers, a 17-foot red corkscrew spiral slide and a six-story-tall rock climbing wall on Church to be managed on weekends and holidays by Cleveland Rocks that's redeveloping the old Masonic Hall nearby on Franklin Boulevard.

Between Church (right) and State
(left) is the tower crane which was
jumped up to its highest level this
week, rising from the Church and
State Way atrium (KJP).

Above the atrium will be one of the largest public art installations in the region, Veysey said. Measuring over 600 linear feet long and two stories tall, the mural will wrap two levels of elevated parking deck in the middle floors of State.

"We've gone out to 20 artists from around the world with an RFP (request for proposals) that's due on Valentine's Day," Veysey said.

He said the arts component is one of the things his partners are most excited about is amplifying the work that is being done by neighbors in Hingetown. That includes the Transformer Station, FRONT Triennial, Spaces, Bop Stop and the Intermuseum Conservation Association.

Graham Veysey shows off the 200-bike storage room in
Church, just off the atrium. The bike room and adjoining
shower is for tenants, be they residents or workers at
at Church + State (KJP).

"You've got both the hub of activity in Hingetown with great bars and restaurants. Then you've got these cultural spots where you can take in a world-class art show and that's some of the stuff we're trying to continue the momentum with," he added.

Veysey takes pride in Hingetown's role in local history, too. It was the center of Ohio City when it was a separate municipality from Cleveland. And it remained a neighborhood gathering spot until the new, larger West Side Market opened in 1912, replacing its smaller, 72-year-old predecessor across the street.

Examples of Hingetown's early importance are found near Church + State, including the city's oldest consecrated building, St. John Episcopal Church, opening in 1838. Veysey's first efforts at revitalizing Hingetown started in the 1854-built fire station on West 29th where he and his wife first set up living quarters. Their revitalization efforts have attracted national attention.

The apartments in Church + State aren't much to look at right
now. But they do make for an abstract expression of art
with four to six months of construction to go (KJP). 

More examples of the project's emphasis on community interaction extend from the ground-floor lobby to a rooftop event space. Their facilities will be publicly available by an app-based reservation and pass system that will roll out in April, Veysey said.

The lobby in State will feature a fireplace, conference room and fitness center, all publicly accessible. The public parking, totaling about 40 spaces, will be in the middle levels of State. The rest of the 214 total parking spaces are underneath the entire site. The rooftop event space called The Lantern will be above Church where weddings, receptions, birthday parties and other gatherings can be held.

Plus, there will be 20,000 square feet of ground-floor retail and the largest bike garage on the West Side, capable of accommodating up to 200 bicycles for residents and retail workers, enhancing Church + State's community attraction.

A rooftop event space in Church is called The Lantern because
it is visible from the lake like the light atop a lighthouse. It will
be available to the public by an app-based reservation system.
So will a conference room and fitness center in State (KJP).

It has also attracted partners like Michael Panzica who joined forces with Grammar Properties while with Hemingway Development. He's starting his own firm M. Panzica Development to focus on multi-family, mixed-use and single-tenant development projects in Northeast Ohio while he's wrapping up his work with Hemingway.

Panzica and Grammar are pursuing a follow-on development called Bridgeworks on the former Cuyahoga County Engineer's property at the northeast corner of West 25th and the Detroit-Superior Bridge.

Bridgeworks will feature one or two residential buildings with a maximum height of 10 stories. Planning for Bridgeworks is moving forward simultaneously with construction coming down the home stretch for Church + State.

On the bare concrete wall, behind
the construction worker, will be a
six-story rock-climbing wall that
will be available to the public on
weekends and holidays (KJP).

"I'm very excited about this project," Panzica said, referring to Church + State. "We're going to have unobstructed views from the fourth floor up."

The 11-story State is the tallest building to rise in Ohio City since the 19-story Lakeview Tower, 2700 Washington Ave., was built in 1973. It is on the other side of the West Shoreway from Church + State. The 15-story Riverview Tower, 1795 West 25th, was built in 1964.

Panzica also points out that Church + State has received the first U.S. Housing & Urban Development loan for new construction in Cleveland going back as far as he could find. It's a $43 million, 40-year loan at a below-market interest rate. The project also received a $2 million, 15-year loan from Cuyahoga County.

Lake Erie is visible from the fourth floors and higher in
 Church + State. Lakeview Tower is on the right. Church +
State is the tallest development to rise in Ohio City since
Lakeview Tower opened in 1973 (KJP).

"We had to get creative on our financing," Panzica said. "Development projects are getting easier in Cleveland but construction costs and land costs are going up and they're outpacing the increases in rent."

He noted that Church + State's exterior will feature materials not typically used in Cleveland developments, such as Spanish slate and extruding planes made from white aluminum planks.

"We spent years designing this," Veysey added. "Part of our measure of success with this project will be our ability to over-deliver on the final product."

The taller State building and Church just
beyond loom over the intersection of
their namesakes Church Avenue and
West 29th (formerly State) Street (KJP).

But the ultimate success will hinge on whether the Church + State creates a greater sense of community in Hingetown through greater interaction.

"We want to make this an amenity not just for the residents but for the neighborhood where it's a place to gather," Veysey said. "It's a place to find community. That community goes way beyond the 158 apartments and its residents."

END

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

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

UPDATED MARCH 12, 2020

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

END

nuCLEus still lurks among many downtown projects

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

END

University Circle-area housing finds new Heights

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

END

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So what about the possibility that SHW is not done?

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

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

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

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

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

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

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

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

END

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

Sherwin-Williams official maps showing sites for new HQ and

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

Cleveland (Iryna Tkachenko). CLICK IMAGE TO ENLARGE

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

Dear Fellow Employees,

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

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

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

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

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

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

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

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

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

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

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

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

Sincerely,

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