CityBlock at Tower City is back on track

 

Efforts to redevelop Tower City Center into a entrepreneurship
hub called CityBlock were put on hold in recent months. But
the effort has been reactivated. This is a conceptual rendering
of the Prospect Avenue entrance to CityBlock (Vocon).
CLICK IMAGES TO ENLARGE

Bedrock Real Estate Services' planned remake of The Avenue shopping mall at Tower City Center into an entrepreneurship hub is showing signs of life again.

Chatter surrounding the proposed $110 million redevelopment of the 350,000-square-foot downtown Cleveland retail center had gone silent since last winter, and the global COVID-19 pandemic wasn't the primary reason why.

"Bedrock had another management change, which set us back," said tech entrepreneur and City Block promoter Bernie Moreno. "But they are fully committed to moving forward."

Matt Cullen departed as Detroit-based Bedrock's CEO in July to lead Cleveland-based JACK Entertainment LLC, which will continue to operate the Cleveland casino adjoining Tower City and Thistledown Racino in suburban North Randall following their 2019 sale to VICI Properties Inc. for $843 million.

Also departing Bedrock was Mark Dunkeson, who was recently president and chief operating officer of the real estate company founded by billionaire Dan Gilbert. Bill Emerson stepped in as Bedrock's interim CEO July 2, holding the position for a second time within a year.

Conceptual rendering of the interior of The Avenue shopping
mall at Tower City Center, redesigned as CityBlock (Vocon).

Then, on Sept. 21, Emerson was replaced by Kofi Bonner, formerly of California-based FivePoint Holdings LLC and was executive vice president and chief administrative officer of the Cleveland Browns. 

"I look forward to working with him to positively impact Detroit and Cleveland," Gilbert tweeted on Aug. 26.

The changes followed Gilbert's ischemic stroke in the right side of his brain over Memorial Day weekend 2019. Gilbert has since recovered. But the corporate stabilization that appears to be occurring at Bedrock wasn't guaranteed to reactivate plans for CityBlock.

According to sources close to Bedrock who were not authorized to speak publicly, Ken Till, Bedrock's vice president of development for Cleveland, considered alternatives to City Block in recent months. They included conventional office spaces, retail and other uses. But Moreno's proposed entrepreneurship hub retained their interest.

Till could not be reached for comment.

The CityBlock plan would redesign the interior of the existing The Avenue shopping mall with collaborative workspaces plus more strategically placed escalators and ramps while getting rid of its hidden elevators. The goal is to make the 1990-reconstruction of the former Cleveland Union Terminal railroad station more easily navigable.

"Ironically, COVID helps as there is no need for elevators!" Moreno joked.

This view shows what a Riverside portion of the CityBlock
redevelopment could look like. This scene along the Cuya-
hoga River could be the result of a future phase (Vocon).

Sources said Bedrock tried to lure Sherwin-Williams' (SHW) new headquarters plus research and development (HQ+R&D) facilities. But when SHW chose to put its HQ on the west side of Public Square downtown and its R&D facilities in Brecksville, Bedrock lost out on landing a major anchor tenant for CityBlock.

The same sources said that SHW's decision are what caused Bedrock to review its options about the CityBlock project, especially the Riverside phase, and to suspend pre-development planning work. Moreno disputed that in February, contending that Bedrock was following up on securing letters of intent from potential tenants.

Since then, more businesses have closed at The Avenue including the Brooks Brothers high-end clothier and the 10-screen Tower City Cinemas. By some estimates, the mall is about half empty although no official data could be located. Some retail will likely be retained in CityBlock.

Technology companies continue to grow in Greater Cleveland, however. For example, the Flats West Bank has become a mini tech hub in recent years with small but growing businesses like BoxCast, EmployStream, Fathom, Kloud9, Snip Internet and TPI Efficiency establishing offices within a few blocks of each other.

Fledgling biotech firms like Athersys Inc. and Abeona Therapeutics Inc. are growing locally too. Also, a Lakewood-based life sciences collaboration firm called Within3 just raised $100+ million in capital for expansion.

END

Sherwin-Williams HQ height to "rival Key Tower"

 

Insiders report that Sherwin-Williams' new HQ tower will rival
the height of the 948-foot-tall Key Tower on the other side of
downtown Cleveland's Public Square. This is an unofficial
massing of what SHW's HQ complex (shown in orange
at the center of this eastward-looking image) at that
approximate height could look like. Properties
shown in red are surface parking lots on
downtown's west side (Geowizical).
CLICK IMAGES TO ENLARGE

For those who wanted another skyscraper in Cleveland that approaches "supertall" status, you just might get your wish.

Ten days ago, Sherwin-Williams Co. (SHW) announced it is restarting development of its global headquarters plus research and development facilities (HQ+R&D). As part of its announcement, SHW confirmed insider information NEOtrans has been reporting for nearly a year, including SHW's HQ+R&D construction manager is a new partnership called Welty Gilbane. It was formed last year by Welty-Testa Builders, LLC of Akron and the Gilbane Building Co., a global firm with offices in Cleveland.

Welty Gilbane is already reaching out to materials suppliers in Cleveland and around the country to determine their availability, capacity and costs. For Welty Gilbane to learn that information, they have to give suppliers a sense of the scope of SHW's HQ+R&D project.

Looking south from the lakefront, Key Tower will likely continue
its reign as Ohio's tallest skyscraper. But reports are that SHW's
new HQ tower will challenge its dominance (Geowizical).

For many suppliers, the conceptual-level data that SHW has already shared publicy will suffice for now -- that the downtown Cleveland HQ will measure upwards of 1 million square feet (not including structural parking) and the Brecksville R&D facility will be about 500,000 square feet.

But when reaching out to specialty companies who might build the HQ tower and supply certain construction equipment and materials for them, Welty Gilbane had to be a little more specific. So it reportedly told them that SHW's skyscraper will "rival Key Tower" in height.

Although Key Tower, 127 Public Square, is 57 stories tall when it comes to usuable space, it also has another six stories for maintenance and equipment inside its pyramidal crown. The top of that crown reaches 888 feet into the sky. But the tower's spire brings the total height to 948 feet (290 meters) above the ground.

From far out in Lake Erie, the potential height of SHW's new HQ
tower shows it rivaling the scale of Key Tower (Geowizical).

That's just shy of what is considered to be a "supertall" -- any building that is 300-600 meters (984-1,969 feet) tall. Only a "megatall" is higher.

This information confirms a prior report published here at NEOtrans in which insiders said the main HQ building will tower 45-55 stories high. Even a building as "short" as 45 stories could rival Key Tower if its floor heights average 16.5 feet like those of Cleveland's Fifth Third Tower -- 1 foot greater than the average floor heights at Key. Also, rooftop architecture could include decorative features that dramatically increase its height, as was also done at Key.

SHW's HQ will be on the west side of Public Square on 7 acres of land now used only for surface parkings lots. Public Square is where Cleveland's three tallest towers continue their reign. In addition to Key Tower, there is the grand dame of Cleveland skyscrapers, the 708-foot-tall, 52-story Terminal Tower and the 659-foot-tall, 46-story 200 Public Square (formerly the BP America HQ).

From the south side of downtown Cleveland, the potential scale of
SHW's HQ tower is especially evident. Other new and proposed
buildings in downtown are also shown in orange (Geowizical).

Beyond the 1.17-acre former Jacobs-owned lot on Public Square, it isn't known what form the rest of SHW's HQ might look like. Insiders say that architects started their massing work on the Public Square lot and are now working their way into the 6-acre former Weston-owned Superblock bounded by Superior and St. Clair avenues, plus West 3rd and West 6th streets.

Another insider said that SHW HQ architect Pickard Chilton Architects, Inc. of New Haven, CT was hired months ago, like Welty Gilbane and the HQ's programming/interior architect Vocon Partners LLC, of Cleveland. NEOtrans also reported on SHW's hiring of Vocon more than a year ago.

Considering Pickard Chilton's hiring was made well before it was announced and that massing work has revealed the scale of the main HQ building, it is possible that renderings of the HQ could be publicly released this winter or perhaps even sooner.

Site analysis for the new SHW HQ complex dug deeper
in July, below a parking lot at the northeast corner of
Superior Avenue and West 6th Street. It exposed soil
that hasn't seen sunlight in nearly 200 years. Key
Tower soars above this scene (Ian Meadows).

Those renderings may also reveal why crews did exploratory work in July below the surface parking lot at the northeast corner of Superior and West 6th. Speculation by those in the real estate industry was SHW may construct a second large building here, potentially 20 stories or taller, as part of its HQ complex.

It is also likely that the HQ complex will be built in phases to accommodate future growth at SHW and/or future consolidations of employees. SHW has noted that the HQ+R&D will be designed to handle that growth, conservately estimated at a minimum of 400 additional employees in the future.  

Ancillary uses could also be built as part of the SHW HQ complex, including a hotel/extended-stay suites for the 100-plus person-stays per day on average from employees, salespeople and executives visiting Cleveland per day for training and skills development. There will also likely be restaurants, cafes, shops and other uses incorporated into the new HQ complex.

In 1990, while Key Tower was still under construction, this rendering
of the proposed 1,198-foot Ameritust Tower (at left) was drafted. The
new Ameritrust Tower would have been built on the same site where
SHW now plans to build its skyscraper (Evan Heintges Architects).

While Key Tower was under construction in the late 1980s by the Westlake-based Jacobs Group, a skyscraper even taller than Key was in advanced planning -- on the site proposed for SHW's tower. Jacobs planned a 63-story, 1,198-foot-tall (365 meters) supertall as the new headquarters for the Ameritrust Corp.

After One Public Square (12 stories) and 33 Public Square (13 stories) were demolished in 1990 to make way for the supertall, Ameritrust was acquired by Society Bank and then merged with Key Corp. of Albany, NY.

The combined bank was consolidated into the former Society Center tower and renamed Key Tower. That killed the proposed Ameritrust Tower project. This lot on downtown's Public Square has sat empty ever since.

END

Lakewood reaches settlement with hospital site developer

 

This sign at the corner of Detroit and Belle avenues in downtown
Lakewood was removed in April as the city and a developer of the
former Lakewood Hospital property parted ways. A settlement be-
tween the two will allow the city to move forward with another de-
veloper to return the site to productive use (The Lakewood Citizen).
CLICK IMAGES TO ENLARGE THEM

According to a statement released today by the City of Lakewood, the city has reached a settlement agreement with Carnegie Management and Development Corp. of Westlake regarding the redevelopment of the former Lakewood Hospital site. The settlement resulted from the early termination of an agreement between the two parties before construction began.

City officials were happy to move on, noting that the settlement allows the city to "cleanly" move forward in developing the site with a new development partner. NEOtrans broke the story in April that Carnegie withdrew as developer of the 5.6-acre, city-owned site at Detroit and Belle avenues in downtown Lakewood. The development project was called One Lakewood Place.

The settlement agreement must still be ratified by City Council, which will likely take place in October. The matter has been the subject of recent executive session meetings between Mayor Meghan George's administration and council members.

City officials touted the deal, stating that it is "a great outcome because it lets us move forward with the process" of redeveloping the hospital site, said a Lakewood City Hall source who was not authorized to speak publicly about the matter.

However, a dollar amount associated with the settlement has not been publicly released and city officials declined to provide the number at this time. The source could say only that "it's not a big number." However, the source acknowledged the settlement amount will become public in October when it appears in legislative form for council to approve.

The last rendering of Carnegie's vision for One Lakewood Place,
featuring a late addition -- an eight-story boutique hotel incor-
porated into the historic Curtis Block at left (CMDC).

"We are very excited about recent news related to this site," an official statement from the city. "As you likely know, after an exhaustive search and selection process for development, the city previously entered into agreements with a developer. Unfortunately, this project was not able to move forward."

"Our focus then turned to how we could most efficiently and expeditiously proceed with development without any concern or worry of further difficulties related to any agreements," the statement continued. "We were able to achieve this."

"In exchange for this clean walkaway, subject to legislative approval, the city obtained due diligence materials and market studies, all of which will provide great value and time savings to any future developer of the site and positions the city perfectly for discussions and negotiations with a new development team. This outcome is wonderful news and we believe is in the best interest of the city moving forward," the city's statement concluded.

Council President Dan O'Malley did not return a phone call seeking comment prior to publication of this article.

Carnegie was selected from among several development teams by previous Mayor Mike Summers to redevelop the hospital site. An agreement was reached with Carnegie which planned a $72 million first phase of development including 200 housing units, 100,000 square feet of offices, 84,000 square feet of retail and an eight-story boutique hotel. All buildings on the site were razed except for the historic and vacant Curtis Block, 14501 Detroit Ave.

The runner-up plan to Carnegie's was this one, proposed by CASTO
and featuring a 12-story mixed-use building fronted by a public plaza
on Detroit Avenue. City officials reportedly like this plan (Dimit).

After clearing and excavating the property, soil pollutants from the hospital's basement laundry facilities were discovered late into the inspection. That necessitated $2 million worth of clean-up costs that each side said was the responsibility of the other. Also, an uncharted creek was discovered under the site. A pump house was built on the site to redirect the stream's water flow.

On April 16, four months after she took office, Mayor George said the city attempted to modify its development and use agreement (DUA) with Carnegie Management and Development Corp. relating to the One Lakewood Place project. She said it was Carnegie who ceased negotiations with the city.

Although Carnegie President and CEO Rustom Khouri did not respond to requests for comment, a member of his development team spoke off the record to NEOtrans, saying the city caused Carnegie to incur additional, unplanned costs. The source said Carnegie's project budget of $72 million for the first phase of One Lakewood Place was realistic.

City officials reportedly have not decided their next course of action. One option is to re-bid a request for proposals from development teams. But privately some administration officials and council members said they liked the 2017 runner-up bidder for the ex-hospital site -- a team led by CASTO of Columbus, North Pointe Realty of Mayfield Heights and Dimit Architects of Lakewood.

This is the site plan submitted by the runner-up
team seeking to redevelop the former Lakewood
Hospital property. Detroit Avenue is at the top
with Belle Avenue on the left and Marlowe
Avenue on the right (Dimit).

That group proposed a $62 million project with 280 residential units (apartments and townhomes), 23,673 square feet of ground-floor retail, restaurants and community spaces, 50,265 square feet of offices plus 569 parking spaces.

Their proposal centered around a public plaza, public lawn and a 12-story building containing eight stories of apartments over three stories of offices over ground-floor community center, plus retail or restaurants. The uses in that building would amount to 108 residential units, 50,265 square feet of offices and 11,400 square feet of usable ground-floor space.

A CASTO spokesperson did not respond to an e-mail prior to publication, asking if the company was still interested in being considered as a developer of the hospital site. 

CASTO's first Cleveland development is The Dexter, a five-story, 116-unit apartment building over a ground-floor retail/restaurant space at Fulton Road and Franklin Boulevard in Cleveland's Ohio City neighborhood. It is pursuing other development opportunities in Greater Cleveland. CASTO recently pursued acqusition and development of riverfront property on the Flats West Bank but walked away from the deal.

END

Why does Circle Square get love and nuCLEus doesn't?

 

These are the original visions for nuCLEus (left) in 2014 and Circle
Square in 2015, then-called University Circle City Centre (UC3).
Both developments evolved over time yet neither project has
turned a shovel of dirt so far. Despite their similarities, there
are differences that have put more scrutiny on nuCLEus
and given more love to Circle Square (Stark/Midwest).
CLICK IMAGES TO ENLARGE THEM

Two births were noted in 2014. Ideas for a pair of major urban core real estate developments in Cleveland -- nuCLEus and Circle Square -- were set into motion, leading to much excitement and debate by everyone from urbanistas to media to fellow developers to elected officials.

Since those births six years ago, neither project has turned a shovel of dirt for new construction. Yet nuCLEus gets publicly criticized and doubted while Circle Square doesn't. Is that fair? Let's take a look at that....

First, let's go back in time six years. Most Clevelanders first heard about nuCLEus in the summer of 2014 when Cleveland-dot-com published an article about a partnership of Stark Enterprises and J-Dek Investments Ltd. buying two separate swaths of downtown parking lots from a Los Angeles firm.

One of those swaths was the proposed site for nuCLEus -- a 3-acre plot bounded by Prospect Avenue, East 4th Street and Huron Road just north of today's Rocket Mortgage Fieldhouse. The other swath was next to West 9th Street in the Warehouse District. The article was followed by another with graphics showing a massive, $500 million mixed-use development marked by a 54-story Jenga-styled residential tower and a hotel bridging over to a second, shorter tower for offices.

At about the same time of Stark's announcement, a new development team was already in the process of buying pieces of land in University Circle under different names, apparently to disguise the scale of an emerging development.

Stark Enterprises' original site plan for nuCLEus that featured
the 54-story residential tower and a hotel bridge building
extending over a laneway to an office building (Stark).

I noticed those purchases in August 2015 during my regular scouring of public records and posted the potential implications of them on UrbanOhio. My posting about that discovery became the first of what would become a forum discussion thread about Circle Square.

Public records revealed there was something in the works that would measure about 7 acres -- far larger than the upcoming sale of two neighboring public parcels -- a police station and Cleveland Public Library branch. A month later, in September 2015, the massive development concept was announced as University Circle City Centre (UC3) when Midwest Development Partners won the bid to acquire the police station and library sites.

The initial conceptual vision showed roughly eight new buildings constructed around parking garages along with a handful of townhouses. Most of the buildings were proposed to be shorter than the neighboring 1920s-era Fenway Manor and Judson Manor apartment buildings that measure 13 and 11 stories, respectively. The exception was one proposed tower approaching 20 stories.

And then began the separate paths on which the two developments traveled for the next five years and how people reacted to those developments.

CONCEPTS/VISIONS: Both projects have seen their plans evolve over time as most projects do. But Stark Enterprises' plans have evolved significantly or, more accurately, de-evolved. It started as a stunning Jenga-style tower that would have been Cleveland's second-tallest building featuring 500 residences, 200,000 square feet of offices and a mid-tower six-story bridge with a hotel in it. The complex would be constructed atop a massive podium of parking for 1,600 cars and 140,000 square feet of retail.

An early massing for Circle Square showing existing and pro-
posed buildings alike, looking south on East 107th Street with
the Epworth-Euclid United Methodist Church in the left-fore-
ground and Judson Manor on the right forground (Midwest).

Developer Robert Stark said nuCLEus would have "the kind of architecture that lets the world know that Cleveland is back, and that Cleveland is in competition with Chicago and New York." With that lofty goal, Stark set the bar high yet couldn't jump over it.

In University Circle, Midwest's Steve Rubin, former chief operating officer of Stark Enterprises, originally proposed a development even larger than nuCLEus if structured parking wasn't included. Envisioned was 717 apartments, about 150,000 square feet of retail and community space (including a new MLK library) and 17,500 square feet of office.

That doesn't include the $40 million renovation of the 144-unit Fenway Manor apartments. Refurbishing of the senior housing technically represented the first phase of Circle Square. That was completed two years ago which implies that Circle Square is already underway. But the new construction hasn't begun.

Although set at a bar numerically higher than the total usable square feet of nuCLEus, Midwest designed the project so it could be achieved one or two buildings at a time. For Stark, it had to first build NuCLEus' massive pedestal of structured parking and downtown retail -- two uses that have proven to be tough to make money at -- before it could construct anything on top of them.

FINANCING: Both nuCLEus and Circle Square depend on public financing, as do most projects in Cleveland which has the nation's 15th-highest construction costs but the nation's third-cheapest rents among major metros. And since Greater Cleveland isn't growing, any new development that doesn't draw from outside the metro area is going to leave a vacancy somewhere else within the region.

The second announced plan for nuCLEus featured two 24-story
towers -- one for offices (at left) and the other for residential.
Gone was the hotel bridge and the 54-story tower (Stark).

Two of Stark's principal office tenants -- the law firm Benesch, Friedlander, Coplan & Aronoff LLP and Stark's own headquarters -- would relocate from elsewhere downtown, raising its vacancy numbers. Media has scrutinized Stark for tapping subsidies that poach tenants. Stark has proposed creative new public financing methods so it could build nuCLEus.They include a Tranformational Mixed Used Development (TMUD) tax credit at the state level, a tax-increment financing mechanism involving the Cleveland schools and a forgivable loan from the city. None of the public financing methods have yet been enacted.

Midwest also has proposed a unique public financing arrangement for Circle Square as well as attracting a tenant from a nearby property. In this case, they are one in the same. The Cleveland Public Library sought to relocate its MLK branch and Midwest offered to incorporate it on the ground floor of one of Circle Square's apartment buildings, now called Library Lofts. The library's financing will also contribute some public dollars and pedestrian activity to Circle Square just as the developer's exterior structure for Library Lofts will benefit the new library.

The scale of both projects required non-conventional subsidies. Circle Square has found its subsidy to get the project going toward a publicly identified groundbreaking, tentatively scheduled for March 2021. Stark never found its public subsidy magic bullet. But that's not what's holding back the project anymore. Instead, the project is reportedly in need of more leases before Stark can announce a groundbreaking date.

RECORDS OF ACHIEVEMENT: When it comes to the historical record of achievements by both developers, there isn't much of a comparison for a couple of reasons. First, Midwest doesn't have much of a history. The company itself wasn't incorporated until February 2015 (although it was preceded by Intesa Holdings LLC in 2012). Secondly and ironically, its principal partner Rubin was the chief operating officer at Stark for 12 years until Fall 2014 before he formed Midwest.

So Midwest's history is in many ways Stark's history. Rubin was able to hit the reset button on his own corporate development history by creating a new real estate entity. He could enjoy all of the benefits of a clean slate while touting his accomplishments at Stark.

When Centric was called Intesa, it proposed an ambitious develop-
ment vision between Little Italy and the Uptown section of Uni-
versity Circle. It was scaled back to a single 7-story building of
apartments over retail, fronting a parking garage (Bialosky).

Rubin joined Stark while the firm was partnering with the Carney Group on its biggest development ever -- the Crocker Park lifestyle center in Westlake. The first phase of the development opened in 2004. It was built south of the Promenade, originally planned by Stark in the late 1980s as an enclosed mall but built as an outdoor strip mall. Stark gained the reputation of a strip-mall developer. Crocker Park helped Bob Stark shed that reputation.

After Crocker Park opened, Stark publicly set its eyes on downtown Cleveland for the first time. There, Stark proposed to build Y-Cleveland, an incredibly grand vision. The Y represented a shaped on a map showing areas of downtown to be developed. The bottom of the Y would start on Scranton Peninsula. The right arm of the Y would extend over to the Campus District.

The left arm would reach up through the Warehouse District to the lakefront where Stark proposed to develop the surface parking lots and extend the street grid over the lakefront railroad tracks to the water's edge. He called that arm Pest (pronounced Pesht), a whole new city like Pest became to the older Buda, in Budapest, Hungary.

Stark was so committed to the idea that the firm relocated its headquarters from its Eton Collection development in east-suburban Woodmere to the Gilman Building, 1350 W. 3rd St. It partnered with parking lot owner Weston to achieve its grand vision. Stark had hoped to secure a development anchor in the form of one of the half-dozen or so large downtown firms that considered relocating from their aging office buildings. Alas, Stark was unable to reel in any of them.

So Stark moved on to nuCLEus in 2015. A year later, Weston joined with Citymark Capital to come up with its own big plans for the Warehouse District parking lots. But Weston's plans already had been on life support for a year or two when it sold the parking lots this spring to Sherwin-Williams Inc. for its new global headquarters.

A 2005 site plan for the upper-left arm of Y-Cleveland Stark's grand
vision for downtown Cleveland ending with "Pest" -- a new city
to complement downtown's existing central business district
and to better link downtown with the river and lake (Stark).

Even as Stark continued to add to Crocker Park by building more residential, retail and securing the American Greetings headquarters, it was still stung by its failure to build Y-Cleveland and especially Pest. Stark may consider that project unfinished rather than abandoned. It still owns Warehouse District parking lots on West 9th. It built The Beacon apartment tower. And nuCLEus is still an active project.

PLAN EVOLUTION: This is one of the starkest differences between the two projects. One project's plan has grown since it was first announced while the other has shrunk. The growing project is Circle Square.

When it started as UC3, Circle Square was estimated to be a $225 million project, not including Fenway Manor. It since has grown to be a $300 million project with buildings originally proposed at eight stories growing to 11- to 13-story buildings, and 17-story apartment towers rising further to 24 stories. Add another $40 million with Fenway Manor's inclusion.

The reason for the growth is the success of other projects in University Circle including First Interstate's 20-story One University Circle. Midwest also contributed in 2018 by opening its Centric development. Although, first proposed to be larger than what was ultimately built, the project is considered to be a great success. Centric, despite having rents ranging from $2.29 to $3.18 per square foot, leased out 95 percent of its 272 apartments in one year.

That success attracted attention, including from out of town. With Circle Square, Midwest Development is joining forces with White Oak Realty Partners of Chicago which has a great deal of experience in building high-rise apartment towers in cities throughout the nation. White Oak is taking the lead on developing a 24-story tower at Circle Square, to rise on the site of the former police station, 10600 Chester Ave.

An updated Circle Square masterplan was approved by the City
Planning Commission earlier this month. It features taller apart-
ment buildings in the background along Chester Avenue with
an office building proposed in on the right side on Euclid
Avenue between Stokes and MLK boulevards (Midwest).

Also, the mostly residential-retail/civic land uses at Circle Square added another use and more scale in its latest iteration. A 13-story office building is proposed to be built where Midwest had previously envisioned townhouses.

By contrast, Stark's original plan for nuCLEus has been scaled back from its catalytic goal. It wanted nuCLEus to be a globally prominent development whose catalytic impact on downtown would rival that of the Cleveland Union Terminal Group (topped by Terminal Tower) of the 1920s and 30s. It started out with a mammoth price tag of $500 million but has since shrunk to less than $300 million, although a current dollar value hasn't been announced.

While Circle Square grew and added planned uses, nuCLEus went in the other direction. In its first scale-down, it lost its hotel "bridge" between two towers, one of them the 54-story skyscraper. So by early 2019, nuCLEus was re-cast with two 24-story towers -- one residential, the other offices -- atop the parking/retail pedestal. The price tag shrank to $353 million.

The development was scaled back again in early 2020. NEOtrans broke the story that nuCLEus would shed the apartment tower and cut 60,000 square feet from the office building while adding a story to it. The skinnier office tower, still atop the parking/retail pedestal, would likely require an investment of less than $300 million to build.

That apparently matched the financing Stark had in hand to build nuCLEus. With most of the office tower pre-leased and a residential component still under consideration, Stark appeared ready to start construction in early 2020. Then the pandemic hit and put everything on hold.

The latest announced conceptual plan for nuCLEus shows a single,
skinnier, 25-story office tower over a pedestal of parking
and ground-floor retail uses (Stark).

There are companies seeking office space in and near downtown, but the newest arrivals want to move within a matter of months, not wait years that it will take to build a skyscraper. Others want their name atop a building, not play second fiddle to Benesch or anyone else. And while opinions vary, some real estate brokers who spoke off the record say Bob Stark and his son Ezra, now Stark's chief operating officer, are difficult to work with in getting lease deals done. 

Stark also hasn't added partners to its development. To be fair, nuCLEus didn't start out with only Stark Enterprises' name on the marquee. It began as a partnership between Stark and J-Dek Investments. But make no mistake that nuCLEus is run by Stark.

Its previous project nearby was The Beacon -- downtown Cleveland's first new-construction residential high-rise since The Park (now Reserve Square) was completed in the early 1970s. The Beacon was a result of making lemonade from a lemon. The lemon was the 542-space 515 Euclid parking garage, built in 2005 for $26 million to accommodate a residential tower above it. Not only did the Great Recession halt plans for the tower, it put 515 Euclid's owner, AmTrust Financial Corp. into bankruptcy.

As part of the bankruptcy, the parking garage was sold at auction to the Harbor Group for a bargain $8.15 million. Stark partnered with Harbor Group to build the 19-story Beacon atop the 9-story garage that was full during the day but mostly empty at night when The Beacon's residents would park there. Few places downtown offered a low-cost parking garage that could be used to support a new residential tower (the planned City Club Apartments will use a similar arrangement at 720 Euclid Ave.).

But while Centric leased out in a year, Stark is offering up to six months free rent to try to fill up The Beacon with tenants. Granted, it's still early. The Beacon held its formal opening ceremony less than a year ago in November 2019 -- four months before the pandemic reached America.

While Circle Square's plan (at left) got bigger and more ambitious
and has a March 2021 target date for groundbreaking, nuCLEus'
plan got smaller and doesn't have a start date (Midwest/Stark).

And there are significantly more apartment units coming on the market in downtown Cleveland than there are in University Circle. That may not hold true for much longer, as Cleveland Heights adds new housing like The Ascent at Top of The Hill and Integrity House, Cleveland Clinic looks to enter the housing market while surrounding neighborhoods like Glenville, Hough and Fairfax restore their housing stock.

CONCLUSION: The short answer as to why Circle Square gets the love that nuCLEus doesn't comes down to the reasons why each gets their press coverage. Circle Square got headlines for mostly positive reasons; nuCLEus got headlines for mostly controversial reasons. Each time Stark sought a new public incentive idea to replace the last brainstorm, the media and its readers grew more skeptical.

Ironically, Stark's latest public incentive idea was arguably its best -- the TMUD tax credit. It has won broad support from developers, chambers of commerce, city officials and state lawmakers throughout Ohio. If it wasn't for the pandemic, the tax credit would almost certainly have become law by now. The legislation would have to pass by the end of this year for it to become law or the whole lawmaking process for the TMUD tax credit will have to start all over again.

So while Circle Square's developers are working towards a March 2021 groundbreaking per their latest plan, Stark has put nuCLEus on indefinite hold, awaiting an end to the pandemic to see which of its many retail and college housing properties emerge from the economic slowdown unscathed.

If Stark is able to get a groundbreaking date announced before Circle Square puts shovels in the ground, a lot of the criticism -- or at least skepticism -- Stark has received and continues to receive may go away. Given the extensive and fascinating history of cities, a timeline of decades or longer is not an unusual measuring stick for gauging a development of significant scale. After all, the Cleveland Union Terminal Group still isn't finished a century later.

END

Two new Lakewood developments proposed

 

Lakewood's Ss. Cyril and Methodius Catholic School, as seen from
the west or Alameda Avenue side, sold last week to an affiliate owned
by Bo Knez of Knez Homes. But rather than pursue a residential con-
version, Knez seeks to remodel the building as offices. The convent
at far left will remain with the Catholic Diocese of Cleveland (KJP).

Two recent property acquisitions are the first signs indicating that a pair of proposed new Lakewood developments may be on the horizon. Both properties are located on the city's primary business corridors on the east end of Lakewood.

First is the Sept. 16 acquisition of Saints Cyril and Methodius Catholic School, 1639 Alameda Ave.; the property's parking lot faces Madison Avenue in the city's Birdtown neighborhood. Purchasing it for $125,000 was Nascent Land Development LLC which is owned by Bo Knez, founder of Painesville-based Knez Homes, one of Greater Cleveland's largest homebuilders.

However, Knez doesn't plan to convert the long-closed school into residential. Instead he has submitted building permits to the city to remodel the 27,000-square-foot, 1955-built structure into for-lease offices.

In an interview this week, Knez said he doesn't have an office tenant lined up. He will soon advertise the property on the open market. In other words, he's developing this as office on speculation that a tenant will emerge. Knez seemed to dismiss the impacts of the pandemic on the office market, even as office tenants are scaling back their space needs due to remote working and a general economic downturn.

"We feel there's a need for this (office use) in the area," Knez said. "We do offices as well. It's one of the of five spokes to our wheel."

The Madison Avenue side of Ss. Cyril & Methodius School (KJP).

In addition to residential, Knez provides general contracting services, development of land for local and national buiders, excavation services and rental activities. The rental and general contracting activities are the roles Knez will play in the conversion and marketing of the school as offices.

Because the work being done to the building is limited to remodeling, it won't require going to the city's Planning Commission before securing a building permit. For that reason, Knez said he hopes to start work by the end of this year or, more likely, early next year.

"The building needs a lot of work," he added.

He also noted that the parking lot facing Madison will continue to be used for parking -- but its use won't be limited to his office building. He said he has a shared parking easement with the Ss. Cyril & Methodius Church, a grand 90-year-old structure established by a parish of Slovak immigrants nearly 120 years ago.

Knez said he will not be acquiring the church's convent located just north of the school on Alameda; it will continue to be owned by Catholic Diocese of Cleveland. Declining enrollment at the school forced its closure at the end of the 2009-10 school year. It was merged with Cleveland’s St. Rose of Lima into the Transfiguration Parish whose school is at Lakewood Catholic Academy, 14808 Lake Ave.

Birdtown is seeing increased development activity. Conversion of the school into offices will start at roughly about the same time work is due to begin on the $4 million redevelopment of the former "Bi-Rite Building" at 12501 Madison into 18 apartments over ground-floor retail, called The Nest. The Silhouette School of Dance and Lakewood Slovak Civic Club were tenants of the building.

The National Tire & Battery car repair, 11801 Detroit Ave., closed
in early Fall 2019. This photo was taken in August 2020 (KJP).

Forest City Shuffleboard owner Jim Miketo bought 12501 Madison in October 2019. Although their Lakewood developments are unrelated, he and Knez are partnering on the redevelopment of the former Hough Bakery property in Cleveland's Glenville neighborhood.

For the second new development on Lakewood's East End, fewer details are known about it because the deal hasn't closed yet. However, two sources said Kertesz Enterprises of Beachwood has the former National Tire & Battery (NTB) property under a purchase agreement. NTB, 11801 Detroit Ave., shut down in Fall 2019 and consolidated business at its Westlake location.

"I'd rather not discuss anything at this point," said Ronnie Kertesz, vice president of Kertesz Group, when asked about the purchase and closing date of the deal.

The sources said Kertesz reportedly wants to add to their apartment inventory in Lakewood. Since 1988, the family has owned the neighboring Colonial Club Apartments, 1437 Newman Ave., a 60-unit, three-story residential complex built in 1963, public records show.

Kertesz, who runs Kertesz Enterprises with his brother Randy Kertesz, would not say if their proposed apartment building would include accessory uses on the ground floor, such as a restaurant, shop or other commercial activity. The sources were unaware if the potential development would contain mixed use.

Before it was NTB, it was Jackshaw Pontiac. Before 1962, it was West
Side Pontiac. This is the property about 1960 (Yesterday's Lakewood).

The property measures 1.09 acres and the building on the site totals just under 15,000 square feet. Prior to its use as NTB, it was operated as a car dealership. The property was developed in 1948 for West Side Pontiac, then sold in 1962 to Stephen A. Jackshaw who operated it as Jackshaw Pontiac. He sold it 1992 and the dealership operated for several more years until it was closed and sold in 1999, public records show.

All of Lakewood's car dealerships have either closed or relocated to highway interchanges in outer suburbs at the urging of car manufacturers to increase visibility. Most of those now-closed dealerships have found new lives as existing or planned mixed-use or housing-only developments.

The current owner is the Niki Group of San Diego, CA which has properties nationwide. It put the building on the market shortly after NTB closed last year, listing it with Howard Hanna Commercial. The property no longer appears in for-sale listings.

Daniel Budish, one of the principals involved in the redevelopment of the Phantasy Theater complex and Mack Industries across Detroit Avenue into Studio West 117, reportedly was bidding against Kertesz to acquire the NTB property.

"Sorry," Budish said in an e-mail. "I wish that we could confirm this as true, but we cannot."

Niki Group bought the NTB property in 2016 for nearly $1.2 million, county records show. But after filing a Board of Revision complaint in 2018, the property was revalued at $650,900 for tax purposes.

END

Biotech firm Abeona to expand Cleveland production facilities

 

Abeona Therapeutices is located on the top two floors of the
MidTown Tech Park Building No. 3, 6555 Carnegie Ave., seen
at left. Abeona's name adorns the upper-right corner of the
building. The firm will expand into the building at right -- Mid-
Town Tech Park Building No. 1, 6700 Euclid Ave. (Google).

A young, growing biotechnology company is expanding its presence again in Cleveland. Abeona Therapeutics LLC is adding to its production facilities by leasing and modifying 12,000 square feet at the MidTown Tech Park Building No. 1, 6700 Euclid Ave.

That brings the publicly traded company's (Nasdaq: ABEO) Cleveland presence to 38,000 square feet. It currently has 65 employees in Cleveland -- more than triple the employment the firm had here just three years ago. Abeona is a clinical stage company developing gene therapy and plasma-based therapies for severe and life-threatening rare genetic diseases.

With this latest expansion, a company spokesman said Abeona will hire additional people for its Cleveland facilities although exact employment numbers weren't provided. The firm recently hired a talent acquisition specialist based in Cleveland. The 90-employee company is headquarted in New York City. It also has a small office in Madrid, Spain.

Abeona's local presence began in the MidTown Tech Park Building No. 3, 6555 Carnegie Ave., which is only about 150 feet away from where Abeona soon will be expanding. An allifiate of Geis Companies which developed and manages the entire MidTown Tech Park submitted permit applications to the city last week for the modification of Building No. 1. For reference, Building No. 2 in the MidTown Tech Park is at 7000 Euclid.

MidTown Tech Park Building No. 1, 6700 Euclid Ave., was built
in 2011 by Geis Companies. Abeona will fit-out the second-floor
of the building closest to the camera. This view looks east on Euc-
lid Avenue, across from the Dunham Tavern Museum (Google). 

"This planned expansion would support the advancement of our clinical programs and commercial manufacturing of our gene and cell therapies we’re developing for the treatment of serious rare diseases," said Scott Santiamo, Abeona's director of corporate communications.

Conrad Geis, director and managing partner of Geis Companies, was unable to return a message seeking comment prior to publication of this article.

In May 2018, Abeona opened the 6,000-square-foot Elisa Linton Center for Rare Disease Therapies at 6555 Carnegie, built in 1929. It is named for Elisa Linton, a woman born with Sanfilippo syndrome, a rare genetic condition that causes fatal brain damage. The facility was expanded by 20,000 square feet in the same building in 2019.

This latest expansion comes only several months after Abeona significantly scaled back its operations here as a precaution, from March to June, shortly after the COVID-19 pandemic arrived in the USA. But Abeona had to get back to work as it has several treatments in clinical trials. The most advanced of these is a Phase 3 VIITAL study of EB-101, an investigational gene-corrected cell therapy for recessive dystrophic epidermolysis bullosa (RDEB), Santiamo said.

RDEB is a rare connective tissue disorder characterized by severe skin wounds that cause pain and can lead to systemic complications impacting the length and quality of life. People with RDEB have a defect in the COL7A1 gene, leaving them unable to produce functioning type VII collagen, which is necessary to anchor the dermal and epidermal layers of the skin. There is currently no approved treatment for RDEB. Abeona's Cleveland team is manufacturing EB-101 for the study.

View of MidTown Tech Park Building No. 3 as seen from Carnegie
Avenue. Schaffer Partners Inc., 6545 Carnegie, is at left (Google).

Also, Santiamo said Abeona is enrolling three Phase 1/2 studies across the firm's single-dose gene therapy clinical programs for Sanfilippo syndrome types A and B (MPS IIIA and MPS IIIB).

Children with MPS IIIA and IIIB suffer from progressive language and cognitive decline and behavioral abnormalities. MPS IIIA and IIIB are caused by genetic mutations that lead to a deficiency in bodily enzymes responsible for breaking down glycosaminoglycans which accumulate in cells throughout the body resulting in rapid health decline associated with the disorder.

Abeona's therapies use virus technology to deliver functional copies of the affected genes to cells in the body. Their Cleveland team and facility are equipped to manufacture drugs and the virus used for the studies. The company can also scale up to meet clinical and future commercial demand, Santiamo said. 

"We're obviously excited that they're continuing to expand in the neighborhood," said Jeff Epstein, Executive Director of MidTown Cleveland Inc., a community development corporation. "They're a great company. They chose a location that's proximate to our health care institutions and like-minded companies clustered together. There's an availability of high-quality work spaces here in MidTown."

This is part of Abeona Therapeutics' office/lab on the top floor of
MidTown Tech Park Building No. 3, 6555 Carnegie Ave (Geis).

He noted that there are about 180 health-technology and high-technology employers in the city's Health Tech Corridor which runs along and between Cedar and Chester avenues, from University Circle to the Campus District near St. Vincent Charity Hospital. Fifty of those firms are in MidTown proper. No public incentives have been requested to support Abeona's expansion, Epstein added.

Abeona's expansion will be on the northwest side of the second floor of MidTown Tech Park Building No. 1 that was built in 2011, according to plans submitted to the city's Buidling and Housing Department.

Work will consist of removing walls to create an open "White Box" space for fit-out and the roof will be reinforced to add rooftop equipment. A stairwell that's closest to 6555 Carnegie will also be modified. Santiamo would not speculate on the timing of the renovations and opening of their expanded facilities.

"We are in the design stage for developing additional manufacturing facilities within existing space at 6700 Euclid Ave.," Santiamo said. "Occupancy and other goals will come into focus as we advance the project."

Abeona was started in 2013 by former CEO Tim Miller. It grew to only four employees by the time it went public in 2015. The company generates annual revenue of about $3 million per year. Its market capitalization currently stands at about $186 million as ABEO opened at $2.20 per share on Sept. 18, according to its Nasdaq listing.

END

Sherwin-William HQ+R&D project restarts; development team announced

 

This is only a massing of the potential Sherwin-Williams global
headquarters in downtown Cleveland. With the team of architects
announced and development work restarting after a months-long
pause, the public could learn in a few months a more refined
design of the new HQ complex (WKYC).

UPDATED WITH PRESS RELEASE INFO

Reports are coming out today that Sherwin-Williams (SHW) has restarted the development of its global headquarters plus research and development facilities (HQ+R&D). But the months-long pause has pushed back the project's completion from 2023 to 2024. The reason is the global pandemic and the economic disruption that it is causing.

The information came in an e-mail sent to company employees today, with a formal public announcement posted later at SHW's HQ+R&D website. Additional information is also being publicized, including the names of the HQ+R&D development team, some of whom NEOtrans reported nearly a year ago.

SHW announced earlier this year that the new HQ will be located on the west side of Public Square in downtown Cleveland on a 7-acre swath of parking lots it later acquired for $49 million, public records show. The R&D facility will be located on the city-owned site of the former Veterans Administration Hospital at Interstate 77 and Miller Road Brecksville, now being redeveloped by DiGeronimo Companies.

In its e-mail, SHW executives reminded employees that most of the project's planning had been paused since March. Only the most critical HQ+R&D planning activities were allowed to continue.

This is the site where Sherwin-Williams plans to build its global
headquarters. The global coatings firm acquired this 7-acre swath
of parking lots earlier this year for $49 million, demonstrating its
commitment to the project and to downtown Cleveland (Google).

"We are now beginning to move forward again with the project," SHW Chairman John Morikis said in his internal e-mail. "I am pleased to share with you that we have selected our key external project partners. They will play a critical role in supporting our goal of creating a next generation workplace designed to serve our customers at the highest level, retaining and attracting top talent, and igniting creativity, collaboration and industry-leading innovation."

The design architect for the global headquarters is Pickard Chilton Architects, Inc., an international firm known for designing signature buildings. Meanwhile the base building architect for the global headquarters and the design, base and interior architect for the R&D facility is HGA Architects and Engineers, LLC of Minneapolis -- home of Valspar Co. which SHW acquired in 2017. Vocon Partners, LLC of Cleveland is the interior architect for the global headquarters.

SHW's construction manager is a new partnership, Welty Gilbane, formed last year by Welty-Testa Builders, LLC of Akron and the Gilbane Building Co., a global firm with offices in Cleveland. Mark G. Anderson Consultants, Inc. of Washington DC is the project manager, responsible for project controls and will be the owner's representative.

CBRE Inc., a global firm with Cleveland offices, is the real estate and economic development advisor while Columbus-based Vorys, Sater, Seymour and Pease LLP is the project's legal and economic development counsel. Vorys has an office in Cleveland. Another law firm brought on to assist is San Francisco-based Hanson Bridgett LLP. Rounding out the team is inSITE Advisory Group which serves as the project's economic development advisor. It has an office in the Akron suburb of Fairlawn.

Sites for Sherwin-Williams' new global headquarters
plus research and development facilities (SHW).

If there were any concerns about SHW scaling back its headquarters component because of pandemic-induced interest in remotely working from home, Morikis put those concerns to rest.

"We recognize that the development, engagement and sense of community our employees share has been essential to our success for more than 150 years and would be difficult to sustain over the long-term with a remote-based workforce," he said in newly released press statement.

The HQ will measure about 1 million square feet (not including structured parking), with insiders estimating the main building will tower 45-55 stories high, rivaling the height of the three other Public Square skyscraper -- Key Tower (57 stories), Terminal Tower (52 stories) and 200 Public Square (46 stories). Those three are the city's tallest. Key Tower is the tallest building in the USA between Chicago and the East Coast.

The R&D facility will measure about 500,000 square feet and be part of a mixed-use development called Valor Acres in Brecksville. The R&D facility's construction is estimated to generate about 3,000 jobs while the HQ is projected to create 4,000 construction jobs, SHW says. Permanent jobs are estimated to be more than 3,500 jobs at the HQ with about 500 at the R&D center with room to accommodate future growth, the SHW e-mail reads.

END