Chicago developer buys land to kick-off a new neighborhood in Tremont

The first of what could be multiple residential buildings in
the Lincoln Heights section of Tremont may rise soon. The
site is shown in this conceptual plan as building No. 3 along
West 25th Street. But the building's shape is still weeks from
being finalized so it will probably appear very different than
what is shown in this massing. The Nestle plant is the large
building at the bottom of this view (Seventh Hill/TWDC).
CLICK IMAGES TO ENLARGE THEM 

A Chicago developer this week has acquired about one acre of land to construct a new multi-family building on a stretch of West 25th Street that's been in between destinations for a long time. But the project could trigger more investment that might make this section of Tremont's Lincoln Heights neighborhood an actual destination.

Ultimately, according to long-range plans, this western edge of Tremont could add 650 housing units, several ground-floor commercial tenants, through streets, hiking/biking trails and public spaces. The site is just north of Nestle USA's L.J. Minor factory. At full buildout, the new community could spread across about 10 acres.

The first phase is being pursued by Mavrek Development Inc. and will include a mixed-use building perhaps five stories tall with two levels of below-ground parking. Above the parking deck will be a first-floor commercial space facing West 25th and topped by about 160 market-rate apartments.

Terms of the property acquisitions were not disclosed. Public records of the transactions have yet to be posted to the Cuyahoga County Fiscal Officer's web site.

Designs are still being finalized and may not be released for a couple more weeks, said Mavrek Principal Adam Friedberg, a Cleveland-area native of Moreland Hills. The project will be called Treo as it sits where Tremont, Ohio City and Metro West communities converge.

Location of the property acquired this week by Mavrek
Development and where it sets in relation to other pro-
perties that may be developed as envisioned by the
Lincoln Heights master plan (KJP/Google).

"One of the coolest things about this site is that it will have unobstructed views of downtown," Friedberg said. "This building is the kick-off development for the Lincoln Heights master plan."

He noted that Mavrek's project, as well as those by other developers who have yet to announce their involvement in realizing the master plan, somewhat resembles Tremont West Development Corp.'s master plan for Lincoln Heights. That plan, drafted in March by Seventh Hill Design, focused on the area between West 25th Street, Interstate 90 and Fairfield Avenue.

Treo is a partnership between developer Mavrek Development and Schiff Capital Group, plus general contractor Krueger Group, Norr Architects, Project Management Consultants and Kohrman Jackson & Krantz. Robert Krueger, a principal at Mavrek, is the president of the Krueger Group based in Cleveland.

"It's a solid team and a lot of experience," Friedberg said. "Krueger is an experienced local partner. They've done a lot of residential and commercial work and also did Hyland Software (tech campus expansion in Westlake)."

Zak Baris, president of Comprehensive Zoning Services LLC, a Cleveland-based real estate consultant working on projects in the immediate vicinity of Treo, said he is looking forward to Mavrek's first Cleveland development.

Mavrek's development site along West 25th Street is occupied
by Sass Automotive & Wrecking. The land slopes down into
the ravine for Walworth Run. That slope provides an unob-
structed view of downtown from this spot and is the rea-
son why Mavrek acquired it for development (Google).

"Their properties in Chicago are pretty cool," he said. "They have a quality of construction and design aesthetics and I hope they bring that over to Cleveland. They do nice rehab work and ground-up development, especially their brick brownstones. Their work is very impressive."

Sass Automotive & Wrecking currently occupies the Mavrek-owned site as do several single-family homes on West 20th Street, the next street east. All will be demolished and their occupants relocated. Most of the land was owned by The Cle Vue LLC, an affiliate of a local developer that has other properties close by.

There will probably be no vehicular access to Treo from West 25th. Nor will access come from the narrow Potter Court. Instead vehicular access will be by two paths -- via Fillmore Avenue, underneath West 25th and via Moltke Court extended west of West 20th to West 25th at Swift Avenue's intersection, said Khalid Hawthorne, Tremont West's housing & economic development director.

The Sass Automotive & Wrecking site has been used as an auto repair and wrecking yard for at least three decades. The site has undergone a phase I and phase II environmental report and no soil contamination from fluids leaking out of wrecked cars was found, Friedberg said.

Porco Lounge & Tiki Room, located at the corner of West 25th and Potter Court, will remain as it is not part of the development. And there are other angles to the development that might affect it -- especially in a positive way.

Treo will be a substantial development, but represents only the first
phase of investment on the east side of West 25th Street near the
Porco Lounge. This view looks across West 25th (Mavrek).

"There are a lot of moving parts in that area," Hawthorne said. "Eventually there will be a larger property and more developers based on discussions we've had over the years, including possible townhouses and workforce units in a later phase."

West 25th could be altered with the pending 25connects bus rapid transit project, he said. That could feature protected bike lanes and wider sidewalks across the long bridge north Lincoln Heights into Ohio City.

"We want to make sure it's not a car centric development," Hawthorne said. "We've communicated a lot of our desires for that area in the Lincoln Heights plan. One of them is to connect Scranton Road to West 25th via trails and possibly a park as well. The reason that came up is because Scranton Road, where The Lincoln is going in, is less than a quarter-mile away (from West 25th) but is much longer by existing streets and sidewalks."

Until recently, the area has been left out of the real estate boom on Cleveland's near-west side. Lincoln Heights was a gap amid Tremont east of I-90, Ohio City's Market District, and Metro West's La Villa Hispana plus, farther south, the growing MetroHealth Medical Center and its spin-off developments.

Looking southward at Treo, West 25th Street is behind the proposed
building and the Norfolk Southern railroad tracks are in the fore-
ground. Next to the tracks and below the building and West 25th
will be a vehicular entrance from Fillmore Avenue (Mavrek).

But that's starting to change. There's the new St. Joseph's Commons across West 25th -- a 68-unit apartment building by Front Steps Housing & Services. One block farther south on West 25th is BVQ Lofts which offer 69 apartments in the former J. Spang Baking Co., 2707 Barber Ave. On the other side of I-90 is the new Tremont Animal Clinic as well as the Astrup Awning Building which is being converted by Foran Group Development LLC into a community arts center.

"We are bullish on Cleveland," Friedberg said. "We like the trends. We've done our homework on the supply and demand in Cleveland and especially Tremont and Ohio City. We want to be a contributor in the neighborhood."

Mavrek is one of many Chicago-area developers that are active in Cleveland. Others include Harbor Bay Real Estate Advisors (their project is Intro), Stoneleigh Companies LLC (West 20th/Lorain), Akara Partners (Kenect Cleveland), White Oak Realty Partners (Circle Square), and Magellan Development Group LLC (possible downtown megaproject). Additional Chicago developers are considering Cleveland.

"Some of those Chicago developers who are active in Cleveland have Cleveland natives working for them," Friedberg said. "We want to implement some learnings we gained in Chicago and marry that with the Cleveland culture."

END

Tremco seeks factory expansion straddling city line

Tremco Inc.'s proposed expansion of its Mameco plant on
East 175th Street-Miles Avenue in Cleveland will be on both
sides of a city boundary shared with Warrensville Heights. It
forced city officials and architects to dig deeper into building
codes from several sources to figure out how the project
 could legally be accomplished (B&H/HWH).
CLICK IMAGES TO ENLARGE THEM

How do you plan for and build a large, new production facility on both sides of a municipal boundary? Carefully.

That's what Beachwood-based manufacturer Tremco Inc. has had to do while proposing a  $25 million, 113,100-square-foot building for expanding its commercial sealants and waterproofing division called Mameco.

The expansion is of their 150,000-square-foot Cleveland plant on Miles Avenue at East 175th Street. That plant is proposed to expand east into Warrensville Heights to increase their production of AlphaGuard rooftop sealant.

Tremco's expansion project was designed by HWH Architects Engineers Planners Inc. The firm explained the complicated expansion to both cities in a  July 28th letter by HWH Vice President Philip Rozman. The letter appeared as part of a permit application filed with the city of Cleveland.

"As the planning of (the) building progressed to accommodate the manufacturing process, the size and location of the building was deemed necessary to encompass both the Cleveland and Warrensville Hts. parcels and bridge over the Cleveland/Warrensville Heights city limit/lot line," Rozman wrote.

The proposed 113,100-square-foot expansion of Tremco's
plant is shown here -- as is the location of the municipal boun-
dary between Cleveland and Warrensville Hts (B&H/HWH).

"Initial review of the site layout plan by the ahj (authorities having jurisdiction) prompted the requirement of a party wall on the city limit/lot line in order to provide separation between the portion of the building on Cleveland property and the portion of the building on Warrensville Heights property," he added.

"A party wall constructed per the requirements of Section 706.1.1 of the 2017 Ohio Building Code along the city limit/lot line will be disruptive to the manufacturing process and likely deem the project not feasible to obtain the goals of the expansion," Rozman said.

A party wall along the city limit/lot line would have to be a firewall with no openings in it. The solid wall would split the proposed building roughly equally in half and at a slight angle -- creating an intolerable situation.

That building would be a new, 90,000-square-foot, two-level production facility fronted by a 23,100-square-foot, three-story structure for offices and mechanical, electrical and maintenance support activities. And each would be divided among two cities' separate building codes and approval processes.

"The new structure as designed will be built over a parcel line without fire separation as required by the 2017 Ohio Building Code," wrote Thomas Vanover, Cleveland's chief building official in an Aug. 12 review of Tremco's plans. "The parcels cannot be consolidated due to the fact that they reside in two different municipalities. An easement cannot be written, because the state of Ohio does not allow a property owner to grant an easement to themselves."

Additional views of Tremco's plant expansion (B&H/HWH).

Finally, the Ohio Building Code does not grant relief because it precludes the construction of a building on the adjoining property in the dedicated portion of the property. So HWH requested and got approved a design as provided for in another building code.

The design will use the 2018 International Building Code which allows for an exception to firewalls on parcel lines. In the exception, the aggregate height and area of the portions of the building located on both sides of the lot line do not exceed the maximum height and area requirements of the code.

So the new production building will not exceed two stories and 65 feet of structural height. The code allows for three stories and 85 feet. The support building won't exceed three stories and 54 feet. The code allows for four stories and 75 feet.

The production area is rated as a moderate industrial hazard with automatic sprinklers and three-hour fire wall between the production and support areas, HWH wrote in its building permit application.

Tremco in 2017 acquired the two Warrensville Hts. parcels meansuring 1.84 acres for $360,000 from M&S Equipment Leasing Co., county records show. Two buildings on those properties were razed, as were two more buildings several parcels of land Tremco recently acquired on the Cleveland side. Data for those acquisitions was unavailable as the parcel boundaries were since redrawn by the county into a 0.7-acre plot of land.

View of the northernmost part of Tremco's Mameco division.
This view looks generally east along Miles Avenue toward
Warrensville Heights. Much of the rest of the 150,000-square-
foot plant is behind the small part seen here (Google).

Tremco's existing Mameco plant in Cleveland's Lee-Miles neighborhood is set on 9.2 acres. With the new property acquisitions, Tremco's total land area for the Miles Avenue plant and future expansion is now 11.74 acres. The existing plant wraps around behind Herold's Salads, 17512 Miles.

Scott Gebler, Tremco's marketing and communications specialist, did not comment on the proposed expansion although he acknowledged receiving two e-mails seeking more information about it.

Information requested includes the dollar value of the proposed investment and how many permanent jobs it would create. Lensa shows 26 jobs available at Tremco in Cleveland. But the expansion project is still a couple of years away from being completed.

Tremco's origins trace back to 1928 when William Treuhaft opened a small roofing materials manufacturing plant in Cleveland. Tremco grew organically and through the acquisition of related companies over the years. By 1958 it was the nation's largest maker of maintenance materials for industrial, institutional, and commercial buildings. Tremco itself was acquired by B.F. Goodrich Co. in 1980.

Medina-based RPM International Inc. bought Tremco in 1997. Today, Tremco is a 3,000-employee, $1 billion global subsidiary of RPM. It has 800 employees in Northeast Ohio among its Beachwood headquarters, Mameco division on Miles, a Tremco plant on 3361 E. 80th St. in Cleveland and a distribution center in the former TRW complex, 23555 Euclid Ave. in Euclid. It also had other plants around the world.

END

More apartments, grocery store planned near Cleveland Clinic

A Meijer grocery store on the ground floor of a new apartment
building, possibly like this one that was proposed in Detroit, is
planned at the southwest corner of East 105th Street and Cedar
Ave. in Cleveland's Fairfax community (Prime Development).
CLICK IMAGES TO ENLARGE THEM

UPDATED OCT. 20, 2020

As first reported here at NEOtrans, a Meijer's grocery store topped by market-rate apartments is proposed to be built on East 105th Street near the Cleveland Clinic. However, the location is a bit different than what was previously reported.

It is one of many residential, commercial and insitutional-related developments planned along a short stretch of East 105th at the northeast end of the $306 million Opportunity Corridor that's due to be completed one year from now.

The first phase of the project by Fairmount Properties LLC is planned to have 250-300 micro-unit apartments, several dozen townhouses, and several hundred parking spaces next to or above a 40,000-square-foot grocery store, according to two sources who spoke off the record. This mix of uses is proposed to rise on 3 acres of land at the southeast corner of East 105th and Cedar Avenue.

The sources also confirmed that the proposed grocery store would be a Meijer (pronounced "mi-yer"). It would be the first from that chain planned for the city of Cleveland. Next year, Meijer will open its first store in Cuyahoga County, a full-size store on the site of a former Kmart in Seven Hills.

Full-size, 200,000-square-foot Meijer stores offer more than groceries -- they have everything from clothing to electronics to furniture. Their smaller, urban-format "Neighborhood Market" stores are limited to grocery items. This would be Meijer's first urban store in Ohio. Michigan-based Meijer plans to build at least six small-format stores in revitalizing Midwest urban neighborhoods by 2021.

According to legislation being introduced to Cleveland City Council, Fairmount has control of the land bounded by East 105th, Cedar, Wain Court and East 103rd Street. However, county records show titles to the properties currently remain with a mix of public and private owners including the city's Land Bank, Cleveland Clinic Foundation, Fairfax Renaissance Development Corp., the Ohio Department of Transportation and three separate individuals. Fairmount has purchase agreements for each.

The amount of planned development activity where Cleveland
Clinic's main campus meets University Circle is extensive.
Developments that are the focus of this article are identi-
fied in red. Other major developments planned or
underway are shown in blue (Google).

A second phase of development appears to be planned on the block immediately west, bounded by Cedar, East 103rd, East 101st Street and Wain. According to public records, a certificate of disclosure was filed with the city and issued yesterday for 2176 E. 103rd. Fairmount is listed as that parcel's buyer. Every other parcel in that block is owned by the Land Bank, Fairfax Renaissance or Cleveland Clinic.

Fairfax's long-range neighborhood plan shows East 103rd dead-ending before it intersects with Cedar. That would enable continuous development along the south side of Cedar from East 101st to East 105th.

Fairmount Principal Adam Fishman did not respond prior to publication to two e-mails and a voicemail left at his office seeking more information for this article. Meijer Public Relations Manager Christina Fecher also did not respond to a similar e-mail other than acknowledging she received it.

There are actually two pieces of legislation pending before city council to help finance this development. One is to authorize Director of Economic Development David Ebersole to apply for and accept an Empowerment Zone and/or non-Empowerment Zone federal Department of Housing & Urban Development (HUD) Section 108 loan for an amount up to $9 million to partially finance the construction of the "mixed-use grocery store project."

The amount of HUD Sec. 108 borrowing capacity for a community is five times its latest approved Community Development Block Grant allocation minus any outstanding Sec. 108 loan balances or existing commitments. So as of March 2020, Cleveland could borrow nearly $28 million in Sec. 108 loans.

And, in the 1990s, the Fairfax, Glenville, Hough and MidTown neighborhoods of Cleveland were eligible to receive $177 million in federal Empowerment Zone loans and grants, but not all of the funds were committed.

Looking north along East 105th Street toward Cedar Avenue,
the 3-acre Fairmount Properties development site is on the
 left. The street has little traffic now, but that will change
once the Opportunity Corridor is built through to
Interstate 490 and numerous developments in
this area are completed (Google).

The other piece of legislation would authorize the city to acquire and re-convey 27 properties presently owned by Fairmount Properties or its designee at East 105th and Cedar for the purpose of entering into a chain-of-title transfer prior to the adoption of tax increment financing (TIF) legislation. In a chain-of-title transaction, the city acquires land from an owner and then gives it back to them so as to allow certain property tax revenues to be used flexibly for urban redevelopment.

Previously, Fairmount's proposed mixed-use development was considered for the southeast corner of East 105th and Carnegie Avenue. Survey crews were on site in June. However the Cleveland Clinic-owned property was deemed too small for a single-level, 40,000-square-foot grocery store and would have required a tall building. No part of the neighboring Tudor Arms property owned by Ari Maron would be used for Fairmount's development, as confirmed by Maron.

Instead, the development is proposed for the former site of Calvary Hill Missionary Baptist Church, 2171 E. 103rd St. County records show Cleveland Clinic acquired the land for $1.2 million in 2017 and demolished the 1916-built church. The congregation moved to 2222 North Taylor Rd. in Cleveland Hts., formerly Hope Lutheran Church.

Last winter, Cleveland Clinic organized focus groups of Fairfax residents, property owners and others to determine how develop the southeast corner of its main campus. The suggested uses centered around residential and retail -- notably a grocery store.

“Now that the northern section of Opportunity Corridor is open, we plan to further develop the southeast part of our campus," said the Cleveland Clinic's media relations department to NEOtrans last March. "We look forward to working with our community partners on future opportunities that will help accelerate the Fairfax neighborhood reinvestment plan."

Site of the planned first phase of Innovation Square is seen
across East 105th Street from the intersection of Hudson
Avenue. The conditions of surviving residences in this
area underscore why new, higher-quality homes are
needed in the Fairfax neighborhood (Google).

This is not the only residential development planned for this stretch of East 105th, within walking distance of the Cleveland Clinic and other employers in University Circle -- Ohio's fourth-largest employment district.

One block south of Fairmount's planned development, at 2258 E. 105th, Fairfax Renaissance plans to hold a groundbreaking ceremony early next month for the first phase of the Innovation Square mixed-income apartment building, according to the Dodge Reports. A specific date hasn't been announced.

However, the online construction project database says actual earthmoving on the site won't begin until spring 2021. Dodge Reports also says Fairfax Renaissance will announce the name of the project's general contractor at the goundbreaking ceremony -- an unusual move. The Ohio Housing Finance Agency's project brief shows the Ozanne Construction Co. of Cleveland as the project's general contractor.

Fairfax Renaissance Executive Director Denise Van Leer did not respond to an e-mail seeking more information prior to publication.

The $12.75 million first phase of Innovation Square will feature 85 apartments on four floors. Of those, 41 units will be affordable housing and 44 will be market-rate units with ground-floor commercial space. It will also have a rooftop deck with a residents' lounge, fitness rooms, bike storage and repair plus electric car charging stations.

The planned first phase of Innovation Square apartments
will be at the northwest corner of East 105th Street and an
extended Hudson Avenue. Its groundbreaking ceremony is
scheduled to be held in early November (City Architecture).

Eventually, among all three phases, Innovation Square will offer 223 apartments north and south of Hudson Avenue once it is extended west of East 105th. The new street will extend past the north edge of the new Playwright Park to East 100th Street, according to the neighborhood's masterplan.

Surrounding the park, from East 97th to East 105th, Knez Homes has begun building dozens of single-family houses that will total a $12 million investment, according to Dodge. The housing will be an easy walk to the Cleveland Clinic in one direction and the newly expanded East 105th-Quincy train station in the other. And if Fairmount's development is built, residents of Innovation Square will be a short walk from its grocery store as well.

A few blocks farther north, the massive Circle Square development is due to start construction in March 2021. There, up to 800 apartments, 104,000 square feet of neighborhood retail, 171,000 square feet of office space, nearly 800 structured parking spaces and a future hotel are planned. It is due to start with two apartment buildings -- one 11 stories tall and the other 24 stories. The latter would be University Circle's tallest building.

Commercial and institutional developments are also moving forward on the eastern and southern edges of Cleveland Clinic's campus. Under construction at 10300 Cedar is the 21,000-square-foot Brooks BioRepository. It will enhance researchers’ study of human tissue samples and advance personalized medicine for an array of conditions -- including cancer, heart disease and epilepsy.

Cleveland Clinic has two major projects on its main campus that are moving forward again after being put on hold during much of the COVID-19 pandemic. First will be a 100,000-square-foot expansion of the Cole Eye Institute on East 105th, between Euclid and Carnegie. Then, a new 400,000-square-foot Neurological Institute will rise on Euclid Avenue between East 96th and East 100th streets.

Tyler Kapusta contributed to this article

END

Yes, Cleveland-Cliffs is considering a new HQ building

Could Cleveland-Cliffs' recent acquisitions result in the construc-
tion of a new office tower in downtown Cleveland? That's what
Cliffs' executives are reportedly trying to figure out after buy-
ing AK Steel and ArcelorMittal USA in the past year. The
latter had its headquarters in this Chicago building, One
South Dearborn in The Loop downtown (Google).

Two weeks ago, I posted a speculative but data-driven article suggesting Cleveland-Cliffs Inc. will probably start looking for a new headquarters facility given its recent corporate shopping spree. This week, several sources at and close to Cliffs confirmed that the company is in fact considering a new HQ.

And that's not all. They are talking with others about identifying additional firms to co-locate with them in a building. Based on who they're reportedly talking with, it's apparent that Cliffs will stay in Greater Cleveland and probably in downtown Cleveland.

But wait -- there's more. The fact that Cliffs is talking with firms about co-locating their offices with them strongly suggests that Cliffs is looking to fill a large, empty building. There is only one large, empty, existing office building in downtown. So they're either trying to fill that building or build a new one. It's one of many office plays underway in Cleveland.

After its recent acquisitions of AK Steel and ArcelorMittal USA, Cliffs is now Greater Cleveland's second-largest Fortune 500 firm by revenue, barely edging out Sherwin-Williams. Only Progressive is larger locally. 

In West Chester, a northern suburb of Cincinnati, AK Steel's
headquarters waits to be emptied once Cleveland-Cliffs can
find or build a larger headquarters in Cleveland (Google).

But Cliffs has a relatively small HQ staff of about 600 compared to Sherwin-Williams' 3,000 or Progressive's 12,000. Cliffs' current home of 200 Public Square has only about 207,000 square feet of available space scattered among multiple floors of the 46-story tower. Cliffs occupies just under 110,000 square feet in the tower.

Once AK Steel and ArcelorMittal USA are assimilated into Cliffs, its HQ staffing may increase to 1,200 employees and its space needs may increase to 204,000 to 272,000 square feet. If those acquisitions result in growth as Cliffs' executives hope, the company's HQ staffing could rise by hundreds more workers and its office space needs could rise to about 255,000 to 340,000 square feet or more in the coming decade.

Considering that Cliffs is shopping for new HQ space, its probable that the HQ staffs from AK Steel near Cincinnati and ArcelorMittal USA in Chicago will be consolidated within Cliffs' HQ. If it wasn't for the pandemic, Cliffs would have already started moving AK Steel office jobs up to Cleveland. For the time being, Cliffs is only replacing departing managers at AK Steel near Cincinnati with new managers in Cleveland, sources at Cliffs say.

And it's a pretty safe bet that Cliffs' HQ will stay in Greater Cleveland if not in downtown Cleveland. The reason is that Cliffs is talking with firms that are already based in downtown Cleveland about co-locating with them.

ArcelorMittal USA's regional headquarters is located in Richfield
at 4020 Kinross Lakes Parkway. Cleveland-Cliffs could expand this
8-acre campus between Cleveland and Akron (Commercial Exchange).

What's more intriguing is what this could mean about Cliffs' new address. With the square-footage needs that Cliffs has by itself, there are only two existing buildings in downtown Cleveland with enough contiguous vacant space to accommodate Cliffs' HQ. One is 55 Public Square whose owner is the target of a federal investigation.

The other is the totally vacant, 493,000-square-foot Ellipse at 45 Erieview Plaza. The Ellipse is the 1983-built, 16-story former Ameritech HQ at the southeast corner of Lakeside Avenue and East 9th Street. It's not only big enough to accommodate Cliffs' after it assimilates AK Steel and ArcelorMittal USA, but it can also hold the offices of the firms with whom Cliffs is willing to co-locate.

Those firms reportedly have space needs in the 20,000- to 50,000-square-foot range. They approached Cliffs in the normal course of doing business with them. They informed Cliffs they were looking for new digs. Cliffs responded that they were also looking for a new home. That's when the conversations began but which are still very preliminary. Many other options for each firm are still on the table.

Because they do business with these firms, Cliffs' sources were unwilling to reveal them.

Buying and updating The Ellipse would be far cheaper than constructing a new building, but it's not a structure meant for everyone. If it was, it would already have office tenants. It has large floorplates averaging 34,000 square feet. It's certainly an attractive building inside and out, including a glassy, elliptical facade offering unobstructed views of Lake Erie. Plus it has a 348-space parking garage nearby and another 32 executive parking spaces under The Ellipse.

The Ellipse, a 16-story office building in downtown Cleveland,
is completely empty. It could accommodate Cleveland-Cliffs'
new HQ plus another small-medium office tenant or two,
 depending on their size (Google).

An unidentified buyer won an August auction to acquire The Ellipse for a bargain $14.9 million. For an unknown reason, the buyer walked away during the due-diligence period prior to taking title. New York City-based private equity firm Somera Road bought the property in 2016 for $36 million. To build an office building of similar scale in downtown Cleveland today could cost about $150 million.

And perhaps that's what Cliffs and another firm or two might be willing to do to get a trophy-class office building of about 20 stories or so with high-end finishes, the latest technologies and an energy-efficient design that reduces operating costs. One has to wonder if this is what Cliffs and a co-locating firm or two have in mind. 

The only reason why Cliffs might consider co-locating with another firm in a building is if it was to either occupy a completely empty building like The Ellipse or to construct a new building. The smaller firm or firms would be a tenant and help offset construction financing and maintenance costs.

Otherwise, Cliffs could go to The Ellipse by itself or build its own building without partnering with a tenant. The fact that they are considering co-locating with other Cleveland-based office users is a telling piece of information -- and a hopeful one for those of who like to see more downtown investment and more jobs coming to Cleveland.

END

Downtown soccer stadium project takes a time-out

Louisville's Lynn Family Stadium, home of LouCity Football
Club, opened this year under pandemic-induced social distan-
cing restrictions. The $65 million stadium has 11,700 seats
but is expandable to 15,304 by adding seats at the open
end where the big screen is located (Devon Roberts).

A 10,000-seat soccer stadium proposed to be built in downtown Cleveland is on hold until pandemic-hurt finances improve among backers of the project so they can acquire a site for it.

Last spring, the Ohio Department of Transportation began soliciting responses from prospective real estate brokers or auctioneers to help it dispose of at least 30 acres of land it owns immediately south of the Inner Belt section of Interstate 90 next to Ontario Street. The goal was to put the land on the market in November.

But ODOT District 12 Public Information Officer Brent Kovacs said disposition of the property has been put on ice.

"In light of the COVID-19 pandemic, ODOT decided to pause the process regarding the potential auction of the subject property," he said in an e-mail to NEOtrans. "Accordingly, no company was selected and no dates have been established. At this time ODOT does not have an estimate for when the process may resume."

About 49 acres of land was acquired in 2011 from Norfolk Southern
Corp. by the Ohio Department of Transportation for building the
new Cuyahoga Valley viaducts for the Inner Belt section of
Interstate 90. ODOT doesn't need most of the land and is
seeking to dispose of it once the pandemic eases (KJP).

ODOT acquired the 49-acre, former Norfolk Southern Corp. intermodal rail yards in 2011 for $29.8 million to facilitate construction of the Inner Belt's new Cuyahoga Viaduct bridges. But the preferred soccer stadium site may be less than half of that, a piece of land bounded by the Inner Belt, Ontario, Broadway Avenue, East 9th Extension and Commercial Road.

Considering that ODOT is seeing a significant reduction in gas tax revenues because of the pandemic, one would think that ODOT would be very motivated to raise revenues from non-conventional sources -- such as the sale of properties it doesn't use or intend to use in the future. Traffic on Ohio roads dropped to about 50 percent below normal levels earlier this year and while truck traffic has recovered, car traffic is still 15 percent below normal.

"Certainly as more people drive less it has impacted our budget," Kovacs acknowledged. "However, that impact hasn’t necessitated us changing our strategy of working to obtain the best return on investment possible for the taxpayers of Ohio."

That could include a desired buyer who is currently lacking the funds to make a targeted real estate purchase for the 10,000-seat stadium. That potential buyer may be the Gateway Economic Development Corp. of Greater Cleveland, based on an April 16 letter by U.S. Rep. Marcy Kaptur (D-9) to ODOT Director Jack Marchbanks.

"The Gateway Economic Development Corporation of Greater Cleveland, an entity with controlling ties to the City of Cleveland and Cuyahoga County is uniquely situated to own such a venue, as they have three decades of experience promoting sports, entertainment and tourism in downtown Cleveland," Kaptur wrote.

Like Louisville, another United Soccer League stadium opened
this year -- the 8,000-seat CHI Memorial Stadium. It is part of
a $150+ million mixed-use development (USL).

The letter didn't identify the property for the stadium but there aren't any other underutilized ODOT-owned properties in downtown Cleveland large enough to accommodate a soccer stadium. And other persons have identified the site, including when NEOtrans first broke the story in March 2019 about the potential for a downtown soccer stadium.

"I am pleased to express my strong support for the development of a soccer-specific, multi-purpose venue in downtown Cleveland," Kaptur added. "The use of property proposed by the Cleveland Soccer Stadium Corporation is for a public purpose and in the public interest. The addition of a 10,000-seat professional soccer venue would bring economic development opportunities that the city is poised to capitalize on."

Kaptur is a ranking member of the House of Representatives' Appropriations Committee which oversees all federal discretionary spending including the transportation budget. Her district extends along Lake Erie's shore from Toledo to Cleveland.

"This (soccer stadium) proposal presents an important public use, and I urge its favorage review, consistent with your agency's rules and regulations," Kaptur said to ODOT's Marchbanks.

She also said a soccer stadium of that size would facilitate the introduction of a new level of professional soccer to Cleveland and complement open-air venues the city can provide. Colleges, high schools and youth sports programs would be able to take advantage of the stadium, Kaptur added.

This image shows where various land uses could fit with
minimal earthmoving to flatten land or to put the Regional
Transit Authority's rapid transit rail line in a tunnel through
the potential soccer stadium/mixed-use project site (KJP).

But Todd Greathouse, executive director of the Gateway Economic Development Corp. of Greater Cleveland, said his nonprofit organization isn't on board yet with pursuing a soccer stadium. The corporation owns Progressive Field, home of the Cleveland Indians baseball team, and Rocket Mortgage Fieldhouse, home of the Cleveland Cavaliers basketball team, plus associated parking decks and joint development.

"This concept was brought up by the original director (of Gateway, Tom Chema) who left in 1995," Greathouse said. "It would require a long approval process to be considered any further."

Gateway Economic Development Corp. is funded primarily by leases paid by the Indians and Cavaliers as well as from the use of Gateway-owned parking decks and so-called sin taxes paid by persons buying alcohol and tobacco in Cuyahoga County.

Gateway receives up to $14 million per year from Cuyahoga County’s sin tax. That revenue reportedly is way down this year but exact dollar figures were not available. Far fewer people are out socializing with a drink or three as many bars are either closed or operating at reduced capacity due to social distancing. This is especially true in downtown Cleveland and at establishments near the Gateway stadiums.

Chema is listed in Ohio Secretary of State records as the statutory agent for the Cleveland Soccer Stadium Corp., which was incorporated in 2017. Because of ODOT hitting the pause button on the sale of the former intermodal yards downtown, the soccer stadium company's activities are also on hold.

Looking generally north towards towards downtown Cleveland
with the ODOT-owned land and potential stadium site spread
out across almost the entire bottom of the image (Google).

"Relative to the soccer project, there really is nothing new," Chema said. "There has been no activity."

Constructing a 10,000-seat soccer stadium is considered essential to Cleveland landing a United Soccer League franchise. Brothers Greg and Shaw Abrams, co-owners of six Force Sports fitness centers, are teaming up with investors to find $5 million to pay the USL's franchise expansion fee.

The effort was negatively affected when Force Sports centers were forced to close this past spring. Some programs were offered this summer, namely outdoor sports like volleyball, baseball, lacrosse, tennis and soccer. Indoor programs are restarting albeit with restrictions. 

If the USL fee is paid and a stadium is provided, the team will be called the Cleveland Force. The Abrams brothers acquired the naming rights to the Force, an indoor soccer league team that thrived at the since-demolished Richfield Coliseum from 1978-88. Indoor soccer plans to return as the Cleveland Crunch in November 2021.

The Abrams have not publicly confirmed anything since NEOtrans first reported the story last year.

"Our goal is to make sure that a stadium deal can be announced at some point soon," Greg Abrams said in the March 30, 2019 article. He said announcements will be made as soon as he gets the OK from his partners.

END

Seeds & Sprouts XII - Early intel on real estate projects

This is the Twelfth edition of Seeds & Sprouts - Early intelligence on Cleveland-area real estate projects. Because these projects are very early in their process of development or just a long-range plan, a lot can and probably will change their final shape, use and outcome.

Views of the proposed new headquarters and multi-purpose facility
for the Original Glorious Church of God in Christ of the Apostolic
Faith at 7007 Superior Ave. The top view is from the north or rear
side of the building. The bottom view, looking generally northeast,
is the south or front side of the building along Superior (B&H).
CLICK IMAGES TO ENLARGE THEM

Church HQ project to add daycare, market, offices

A Cleveland-based religious organization is proposing a new headquarters and multi-purpose facility totaling 57,538 square feet in the city's St. Clair-Superior neighborhood. The Original Glorious Church of God in Christ of the Apostolic Faith plans to demolish and replace its existing, decaying facilities at 7007 Superior Ave. and raze surrounding buildings.

Proposed in a new two-story building is a 9,702-square-foot grocery store dubbed Superior Market. Also planned is a 12,932-square-foot, 12-classroom day care center called the Original Glorious Academy. Two kitchens and a cafeteria also are proposed.

But the project is ultimately intended to be a headquarters for the multi-state religious organization. It would have a 21,796-square-foot worship sanctuary/assembly hall with 568 seats called the Original Glorious Convention Center.

On the second floor will be a business office for the church organization. Plans also show a 179-space parking lot behind or north of the building and extending back to Bayliss Avenue. Although a dollar amount for the proposed development is not listed on the city's documents, at a unit cost for church construction of $200 per square foot plus site preparation, the project could cost about $15 million.

Those plans for the mixed-use development were submitted to the city in late September and are undergoing a site plan and zoning review. The proposed 4-acre site, of which the church owns about half of the land, is zoned entirely as multi-family with building heights limited to 35 feet and the maximum floor area can use only up to half of the lot.

Although the Original Glorious Church of God in Christ of the Apostolic Faith is headquartered in Cleveland, it was founded 99 years ago by Mother Lula Phillps in Huntington, WV. Today, it is led by General Bishop is Charles M. Laster, Sr. However, tax filings are directed to Bishop David Blount of 4425 E. 142nd St. in Cleveland, a property owned by Blount Properties and Holdings Ltd., public records show.

Contact person for the project is John Prabhudoss, chairman of the board at the Federation of Indian American Christian Organizations. He could not be located for comment. Architect for the project is Paper Plane Architecture, LLC of Brooklyn, NY. The owner's financial advisor is Dunhill Inc. of Houston, TX, according to the plans filed with the city.

The proposed BigHaus development by Brickhaus Partners at
the southwest corner of Clifton and West Boulevards (CPC).

Brickhaus plans townhouses near Edgewater Park

After several fits and starts by less experienced developers, a highly visible yet vacant property on the southwest corner of Clifton and West boulevards was sold last week to an affiliate of Brickhaus Partners for a five-unit townhouse development called BigHaus. The 0.38-acre site has an address of 10011 Clifton.

On Oct. 7, BigHaus Development LLC acquired two parcels for $200,000 from F.W. Pinard Building Company LLC. F.W. Pinard bought the land through an affiliate, Kearny 17212 LLC of Alton, NH in February 2014 and divided it into two parcels in 2016. Two townhomes were proposed but neighbors fought the plan, saying its design didn't mesh with its surroundings.

The site is one block south of Edgewater Park. There, Brickhaus plans to build 11,300 square feet of attached, for-sale housing designed like several large, nearby single-family homes. Four of the five townhouses will face the boulevards with the fifth or smallest unit behind. The smallest towhouse will measure 1,780 square feet with two each at 1,820 and 2,940 square feet.

The ground floor of each three-story unit will have a two-car garage, hidden from the boulevards, as well as living space facing the street. A common access drive for all five units will be from West Boulevard and enter the townhouses complex from behind. Like the existing homes, the new townhouses will be set back from West Boulevard. The land has sat vacant since a house on the site burned down in the mid-1960s.

In the last few years, Brickhaus developed two multi-unit townhouse projects in the Edgewater-Cudell neighborhood. Both were on the sites of closed churches. The first was 95 Lake, located in the 9500 block of Lake Avenue. It replaced Bethany English Lutheran Church, 9509 Lake Ave. The other was One Seventeen, built on the site of the former Fifth Church of Christ Scientist.

The Woodhill Station development is a two-phase project with
the first phase at left and the second at right. Both are across
Buckeye Road from the Buckeye-Woodhill light-rail station
that was rebuilt in 2012 (City Architecture).

Woodhill Station development plans revised

The Community Builders, developer of a mixed-income apartment complex at 9511 Buckeye Rd., submitted revised plans to the city for the first phase of the project, called Woodhill Station. Plans show an enhanced plaza area outside the 120-unit apartment building's entrance and refinements to the exterior cladding. The plaza has more landscaping features to make it more attractive and useful to residents.

NEOtrans broke the story about the planned development in early August, noting that site preparation could begin in November. However, structural construction work may not begin until the spring, according to the Dodge Reports.

The revised plans also include a massing that reveals the proposed scale of the next phase of development -- a multi-story residential structure at the corner of Buckeye and East 93rd Street that's almost as large as the first phase. The second phase would have a commanding street presence at the corner, including potential ground-floor retail spaces and a glassy, bright lobby. 

The location is across the street from the Buckeye-Woodhill Blue/Green line light-rail station that was completely rebuilt in 2012. Putting more residents near rapid, high-frequency transit increases access to jobs for more residents. Because of urban sprawl in Greater Cleveland, only one out of every three jobs is within a 90-minute one-way transit trip of Cuyahoga County residents.

END

Cleveland-area offices shrinking, growing, moving and uncertain

Uncertainty is the word describing the future of corporate office sizes,
locations and design in Cleveland in the post-pandemic era. There are
 many things up in the air when it comes to that future. But every chal-
lenge has an opportunity, including designing offices to be more like
home or even building residential for employees next to or within new
office developments. One of Cleveland's best known office designers
is Vocon Partners. This is their new offices on Prospect Avenue in
Cleveland's MidTown neighborhood (officelovin.com).
CLICK IMAGES TO ENLARGE THEM

UPDATED OCT. 10

The real estate market is divided into four basic end-users -- residential, hospitality, retail and office. Although the retail market has been shrinking for years, it is basically on hold during the pandemic with some exceptions. The hospitality market is pretty much in a coma but it will probably return healthy once it regains consciousness. Only the residential market has shown a great deal of resiliency throughout the pandemic.

And then there's the office market. If there ever was a period of uncertainty for any end-user market, it's the office sector.

You will also find some very strong feelings from some people about the future of the market, even though no one has seen the future. Yet, you will find some who are certain of what the future holds -- that notion of commuting to work in the morning, laboring in an office building all day, and then commuting back home in the evening is a pandemic fatality. "Or at least that's the way it should be, dammit!"

"Place-based work culture mattered before the pandemic, it matters now, and will matter post-pandemic," countered Downtown Cleveland Alliance Executive Vice President of Business Development Michael Deemer in an Oct. 10 tweet. "Endless screen time can’t match the productivity, collaboration, innovation, and mental health benefits that comes from in-person interaction."

The 3rd Quarter 2020 Cleveland office market report from Newmark Knight Frank takes a middle approach, especially when discussing the downtown Central Business District (CBD) market.

The Cleveland CBD is still considered a desirable location for prominent local, regional and national companies, though it is estimated that Downtown Cleveland has seen an 80 percent reduction of office workers during the pandemic. Office trends, such as unassigned seating, coworking and large "bullpens" of worker cubes, have companies rethinking safe reoccopation strategies, and leasing activity in the CBD from April through September was as sluggish as it has ever been. This past quarter's statistics already bear out that it might become more expensive to lease space in the future, especially at the Class A and B levels. As office employees will want to work from home more often, companies might considering (leasing) more space per person to keep germs from spreading. The outlook for the rest of 2020 is uncertain.

The biggest potential office development in Cleveland is the upcoming
announcement about Sherwin-Williams' new global headquarters down-
town. Word is that it could rival the height of Key Tower, Ohio's tallest
skyscraper. This is an official massing of the Sherwin-Williams HQ, as
seen in orange in the center of this image (Geowizical).

And that's the one-word takeaway when it comes to the office market -- uncertain. Add to that the large number of companies that are prepared to make moves in the next year or so and you have a lot of pieces thrown up into the air. How and where they will land will be incredibly interesting to watch.

One of the largest companies that will be making a move is Sherwin-Williams. The 154-year-old company takes a long view towards its business. Its CEO John Morikis recently eased concerns about the possibility of having more of its office employees work from home and thereby shrinking the size of its new global HQ.

"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," Morikis said.

There are more reports coming out about Sherwin-Williams' new HQ building on Public Square. NEOtrans reported that the HQ will be one of Cleveland's four tallest, reaching about 45-55 stories high. According to some suppliers, they were told by the HQ's construction manager Welty Gilbane that the new skyscraper could rival Key Tower. Morikis reportedly considers the new HQ's location and design as essential to attracting young talent to the company.

Another old and large Cleveland company, 173-year-old Cleveland-Cliffs, is also facing an office space crunch at its downtown Cleveland headquarters at 200 Public Square. It just bought two steelmaking firms larger than itself -- Cincinnati-area-based AK Steel and Chicago-based ArcelorMittal USA.

After Cleveland-Cliffs' recent buying spree, it may have become too
large to remain in its current headquarters in 200 Public Square. But
it is soon to know where its new home might land (Google).

Absorbing those two firms over the coming years will likely prompt the firm to move out of its crowded 46-story tower on Public Square. Where could Cleveland-Cliffs and its roughly 300,000 square feet of potential office space needs land? It will probably be a year or more before that question is answered.

The Newmark Knight Frank office market report noted two reasons why office needs might shrink (remote working) and why they might grow (social distancing). But neither of those may be enduring, long-term trends.

A trendsetting change that could endure is what CrossCountry Mortgage is seeking. Relocating its HQ to downtown Cleveland from the suburbs (Brecksville) isn't the trendsetting move. Many companies are going downtown to lure more young talent to their workforces. Recently, Goldwater Bank announced its move from Beachwood to downtown, shortly after digital marketer Fathom said it is moving from Valley View to the Flats. 

The trendsetting move by fast-growing CrossCountry Mortgage is to add a residential component to its HQ plan for renovating several historic warehouse buildings on Superior Avenue in the East 20s. The apartments will be marketed first to HQ employees, according to a presentation to the city by Vocon Partners, architects hired by a joint venture led by CrossCountry Mortgage CEO Ron Leonhardt.

Imagine working from home but next door to your office building. It offers the productivity and collaboration benefits of working at the office while also giving employees the privacy of working from home -- with an incredibly easy commute regardless of the weather or traffic. The city and CrossCountry are finalizing a deal for $2 million in public incentives for the first phase of the six-acre development.

Site plan of the proposed first phase of CrossCountry Mortgage's
new Cleveland headquarters. North is to the left in this image, as
is Superior Avenue with Payne Avenue to the right and East 21st
Street at the bottom. The shaded building to the lower left will
be converted into apartments and marketed first to company em-
ployees. The rest of the site is comprised of historic warehouses
to be converted into offices for 700 workers (Tyler Kapusta).

Although the Dodge Reports say renovation work may not begin until 2022, a four-story brick building at 2110 Superior Ave. is due to become a 40-unit apartment building. The first phase of CrossCountry Mortgage's offices for about 700 employees will be along East 22nd Street in the former warehouses of Tap Packaging Solutions (ex-Chilcote Co.). Tap is a 108-year-old firm that moved its 125 jobs to Brooklyn. Construction on the office component is due to start early next year.

But CrossCountry Mortgage is in growth mode. That 700-employee figure is restrained from growing faster by the firm's small offices in Brecksville as well as by its lack of suburban marketability to younger people. In five years, after the move to larger offices in downtown Cleveland, the company expects to have 2,000 employees, according to a CrossCountry executive who spoke off the record.

Like Cleveland Cliffs, a growing Benesch, Friedlander, Coplan & Aronoff LLP is also looking to move out of 200 Public Square. Unlike Cleveland Cliffs, it knows where it wants to go -- the 25-story nuCLEus office tower proposed on a huge parking lot on East 4th Street in the Gateway District by a partnership of Stark Enterprises and J-Dek Investments. Benesch wants to be nuCLEus' anchor tenant.

Unfortunately, nuCLEus doesn't have enough office tenants yet for Stark to get a construction loan and start work. It's not for a lack of potential tenants sniffing around. Word is that at least two medium-sized tenants now at one downtown building are considering relocating to nuCLEus. Together, the two potential tenants would be a little larger than Benesch's 300 employees. But "potential" isn't nuCLEus' problem -- it's about getting enough tenants signed.

Additionally, keep an eye on Erieview Tower whose new owner James Kassouf and partners are converting 13 of the office building's 40 floors to residential. Law firm Weston Hurd LLP is moving to AECOM Centre across East 9th Street. And it probably won't be the only defection from Erieview. Look for more big tenants to step out and invest in new digs -- including possible new construction.

Between law firm Benesch and development firm Stark, the
proposed 340,000-square-foot nuCLEus office tower has about
200,000 square feet of space spoken for. But that's not enough
for Stark Enterprises to start construction. Reportedly, there
are potential office tenants considering locating at nuCLEus
that are large enough to trigger its construction (Stark).

Increasingly, downtown tenants want to be in trophy-class buildings -- not just Class A. They want top-notch finishes and technology. They want reserved spaces for executives under the same roof as their offices. They want fitness rooms and quiet, comfortable outdoor decks to think and/or decompress. And they want their company's name and logo to be on the outside and inside of the building for everyone to see. Or at least that's what real estate brokers and developer say prospective clients are telling them.

Going back to the suburbs, this time in North Olmsted, two companies are hunting for new space. The largest is Moen Inc. USA which has outgrown its 27-year-old, 141,221-square-foot office building at Interstate 480 and Great Northern Blvd. But it hasn't outgrown its 16.5-acre property, only two-thirds of which is developed and most of that is for surface parking.

More than 600 people work at Moen's North Olmsted offices which have expanded into leased office spaces along Country Club Boulevard on the other side of I-480. According to sources, Moen is looking at new construction in Greater Cleveland and elsewhere for its expanded U.S. HQ. Its landing spot is far from settled.

In the meantime, Moen will renovate its existing building to become COVID-compliant. Moen reportedly is eager to get its employees back in the office. How many more companies are similarly eager to get their employees back in the fold and what are they willing to do to achieve that?

Also in North Olmsted, FM Global, a Providence, RI-based insurance firm, is looking for a more urban setting for its 90-plus employees. It was ready to relocate to One Lakewood Place until Carnegie Management and Development Corp. walked away from the project. The city reached a settlement with Carnegie and will consider a new developer. FM Global has put its office search on hold during the pandemic.

Moen Inc. USA's headquarters in North Olmsted has more than 600
employees. The company has outgrown this building on the south
side of Interstate 480 and expanded into leased offices on the
north side of the highway. Company officials are reportedly
looking into expanding the existing building or possibly
constructing a new headquarters elsewhere (Google).

So has AmeriGas Partners L.P., which was recently acquired by UGI. As part of a corporate restructuring, AmeriGas considered tripling the number of its jobs here in Greater Cleveland to more than 300. Its offices are located in Westlake and more space has been added in Brooklyn Heights. But the jobs increase is far less than what was planned before the pandemic. In the future, AmeriGas' actions are worth watching.

On the other side of town, Beachwood-based Tremco Inc., a 92-year-old manufacturer of sealants, would like to unite its two east-side manufacturing plants and possibly its suburban headquarters into the same facility. To stay close to its existing workforce, Tremco could be a candidate for relocation to the Opportunity Corridor. But no site has been decided, yet.

The wildcard for some of the office moves around town is the completely vacant, former headquarters of Ameritech built in 1983. Called The Ellipse and located at 45 Erieview Plaza (corner of East 9th Street and Lakeside Avenue) in downtown Cleveland, the 16-story, 496,000-square-foot building was the subject of an August auction. The building has been difficult to lease because its floorplates are large, averaging 31,000 square feet.

An unidentified buyer won the auction and the chance to pay a mere $14.9 million for the property, according to a source. But the buyer walked away during the due-diligence period prior to taking title. It is not known why the purchase did not go through. 

The current owner, New York City-based private equity firm Somera Road, is back to square one in its disposition of the office building and attached parking garage. Somera Road bought the property in 2016 for $36 million nine years after MB Cleveland Erieview LLC acquired it for $53 million.

END