Data shows downtown residential is hot

Downtown Cleveland’s residential market has proven resilient in
the face of recent crises. Now it is on course to break through the
30,000 population ceiling by the end of the 2020s which should
attract more employers and neighborhood-style retailers, perhaps
even some regional retailers as well (LoopNet).

 If you spend too much time on social media, you might encounter a few folks who are under the false impression that parts of downtown Cleveland burned to the ground during the nationwide racial unrest last year. But while downtown’s commercial market is still recovering from the ongoing pandemic, the residential market is hot. You might even say it’s on fire.

Three data sets confirm this. One is downtown’s population, which is now above 20,000 people using the only resource that matters — the U.S. Census. Another is a recent CoStar report that says downtown apartment demand is on pace for a record-breaking year. The third data set comes from a unique source.

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Flats East Bank plans reveal $84 million project

Plans were shared with NEOtrans today for Kenect Cleveland, the
proposed next phase of development of downtown Cleveland's Flats
East Bank. This conceptual rendering by Goettsch Partners for de-
veloper Akara Partners, both of Chicago, shows a wide-angled view
looking generally east from the intersection of Front Street on the
left and West 11th Street on the right. Currently occupying the site
is a 173-space, 2.45-acre surface parking lot (GP).
CLICK IMAGES TO ENLARGE THEM

The next phase of development at Flats East Bank has undergone some refining in the last couple of years as the pandemic and technological advances have affected the real estate market. Although the plan was always to build a mixed-use but residential-focused structure, this next phase (dubbed by some as Phase 3B), has been pruned somewhat.

With an early construction cost estimate of $84.4 million and a project size of 213,376 square feet, Kenect Cleveland is still a significant project. The seven-story building is proposed to have 229 market-rate apartments above three levels of parking with 229 spaces, plus 10,000 square feet of ground-floor retail and a leasing office of 5,000 square feet.

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Cleveland Indians may buy garage for ‘ballpark village’ development

With an office-like façade along Huron Road, the massive Gateway East Garage extends
south along the East 7th Street alley and then west along Bolivar Road, behind Progres-
sive Field’s scoreboard. The Cleveland Indians/Guardians may acquire the 1994-built
city-owned parking garage in 2024-25 and sell or partner with a real estate
investor to redevelop it (GoogleEarth).

As part of its ballpark renovation plan, the Cleveland Indians may acquire one of the largest parking garages in downtown Cleveland. The city-owned, 1,650-space Gateway East Garage, 650 Huron Rd., might then be sold to a real estate investor who would demolish some or all of the structure for redevelopment, according to two sources.

Both sources spoke off the record to NEOtrans and outlined the Major League Baseball (MLB) team’s vision for financing $435 million worth of proposed renovations to the 1994-built Progressive Field. The Indians (to be called Guardians after this season) in August signed a public-private partnership deal with the city of Cleveland, Cuyahoga County and the state of Ohio to remain at Progressive Field for at least another 15 years after the club’s current lease expires following the 2023 season. Two optional five-year lease extensions are included.

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Bedrock riverfront joins downtown lakefront in mega-planning

A multi-decade vision was announced today by Detroit-based
Bedrock for riverfront development in downtown Cleveland. It
depends on securing federal dollars for infrastructure improve-
ments which will take many years to carry out (Bedrock).

The more things change, the more they stay the same.

A century ago, the city of Cleveland was eager to work with the private railroads to replace its undersized, outdated lakefront train station with a glamorous new downtown terminal. The new lakefront station would be a key component of its ambitious Group Plan designed by Daniel Burnham to remake the central business district into a setting of beautiful public buildings built along a park-like mall.

But two brothers from the eastern suburbs began developing Shaker Heights, rapid transit lines and a $1.8 billion (in today's dollars) downtown station complex for railroads, public transportation, office towers, luxury hotel, department store and post office. Both plans were achieved, although the Group Plan was built without the railroad station. The Van Sweringen brothers' Cleveland Union Terminal was constructed instead, crowned by Terminal Tower.

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Court orders Little Italy housing construction halted

Thirteen four-story townhomes would line the east side of
Coltman Road in Cleveland’s Little Italy and block views
of a four-story apartment building from the west. Another
four townhomes would rise on East 123rd Street located
south of the apartment building that is a source of dis-
content for two nearby residents who are trying to
block construction work now under way (SixMo).

Cuyahoga County Common Pleas Court Judge Michael J. Russo issued a preliminary injunction yesterday against parties involved in the development of the long-vacant and neglected Woodhill Supply site, 1862 E. 123rd St. in Cleveland’s Little Italy. The development is a $15 million mix of townhomes and an apartment building. However construction continues as terms of the injunction have apparently not been met.

For Russo’s order to take effect, two complainants initiating the case would have to first file a $200,000 bond with the court. The bond had not been filed as of midday today, court records show. NEOtrans also visited the development site today and noticed that construction appears to be continuing.

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Gateway live-work apartments planned, more possible

This basic massing shows the concept of what developer Somera
Road would like to build in the 1000-1100 block of Bolivar Road
just east of East 9th Street and Progressive Field. Proposed is
a four- to five-story apartment building built atop a two-level
parking garage with retail fronting Bolivar (Desmone).
CLICK IMAGES TO ENLARGE THEM

New York City-based real estate firm SomeraRoad is proposing a big addition to several downtown properties it acquired two years ago along Bolivar Road east of East 9th Street and Progressive Field.

According to documents submitted to the city prior to seeking conceptual approval from Cleveland City Planning Commission, SomeraRoad wants to construct a seven-story apartment building with 203 units. The project would consist of a two-level parking garage with ground-floor retail and topped by the new apartments.

"We are in the conceptual stages of discussing a potential mixed-use development at our property on Bolivar Road with the City of Cleveland," wrote Andrew Donchez, vice president of development at SomeraRoad, in an e-mail to NEOtrans.

"Given the great location, proximity to the great sports, entertainment and dining options in downtown Cleveland, we believe a high-quality, mixed-use and residential development would be complementary to our renovation of the historic office building at 1020 Bolivar that we recently completed," he added. 

Although these massings make it appear as if the apartment building
would be built atop both existing parking garages on Bolivar. In-
stead, the single-level deck that's closest in this view would be
demolished for a new, two-level garage that's a bit shorter
than the 1971-built garage that will be kept (Desmone).

That office building, the westernmost structure on the site, is a former Ohio Bell Telephone Co. operations building. Later, it was the offices for the Ohio Means Jobs employment agency that moved to 1910 Carnegie Ave. The four-story building, with ground-floor parking, was recently renovated with a modernized lobby, tenant lounge and rooftop deck.

The next two structures east on the property will meet different fates, pending city approvals that include a zoning variance or a change of use as the site is zoned as semi-industry.

Through its Cleveland-based affiliate Core Construction Services, SomeraRoad plans to demolish the easternmost parking garage, a one-level facility built in 1926. It is located in a designated historic district.

By contrast, the owner intends to retain and refurbish a two-level parking garage built in 1971 located in the middle of the site. It is between the renovated office building and the 1926 garage. On the site of the demolished garage, five stories of apartments will be built above the new parking deck; four stories would rise above the existing garage.

Cross-section views from the north (Bolivar Road) side and south
 (Erie Court) that helps better explain how the new apartment
building, new parking garage and 1971 garage will fit to-
gether in this proposed development (Desmone).

The new, two-level parking structure would have two retail spaces -- one 1,267 square feet and the other 1,491 square -- a residential lobby and a 1,081-square-foot fitness center. All of those ground-floor uses would face Bolivar.

Vehicular access will be off Bolivar and Erie Court, the street south of the site that's along the Erie Street Cemetery. The 1971 and new parking structures will also be connected internally so vehicles can travel between them without going outside.

"The goal of the project is to contribute to the 'live-work-play' environment of the Gateway District and to activate the street, creating a more vibrant pedestrian experience and support Bolivar Road and Erie Court as a connection between Playhouse Square and the Gateway Stadiums," according to a project brief supplied by SomeraRoad.

"The design is to respect the existing historic context of the area while introducing materials to support a modern industrial aesthetic," the developer's brief continued. More detailed renderings and designs will be provided if the city grants conceptual approval.

Existing conditions as seen looking generally west along Bolivar
Road, with the 1926-built garage in the foreground, the 1971-
built garage just beyond, and the recently renovated, four-
story office building barely visible at right (COSTAR).

Above the 1971 garage, a plenum space for air circulation topped by four stories of apartments are proposed to be built. But it won't be two apartment buildings. It will be a single, continuous building over both parking structures and measure 272,705 square feet. In total, the 1971 garage and the new deck will add 254 vehicle parking spaces and 10 bicycle parking spaces.

To achieve the city's sustainability goals, the developer notes that the project will reuse an existing parking garage and provide a minimum amount of bicycle parking. It will also offer electric vehicle charging stations, green roof areas with native landscaping, reflective white upper roof, daylighting, operable windows and LED lighting.

"I would be happy to chat and provide more details in the future as we progress with the project," Donchez said.

The new building will top out at 80 feet tall -- high enough so that the upper floors will have views of baseball games at Progressive Field and of downtown's central business district nearby. But views could increasingly be obstructed in coming years.

This view from atop SomeraRoad's recently renovated office building,
the former Ohio Bell operations center, is a low-level example of
the kind of views that could be had from the proposed, taller
apartment building behind the photographer (COSTAR).

The reason is due to potential development surrounding the planned $435 million renovation of Progressive Field. That renovation may depend on revenue from the creation of a Tax Increment Financing (TIF) district around the ballpark to capture the increase values from significant developments within that district, according to a source familiar with the vision.

Three potential groups, one local and two out-of-town, are pursuing a minority ownership stake in the Cleveland Guardians to position themselves at the front of the line to acquire the team whenever the current owner Paul Dolan decides to sell. The source declined to identify the three groups.

Major League Baseball and all three potential ownership groups are heavily pushing the proposed TIF district for development, replicating the ballpark villages in Atlanta, Boston, San Diego, Washington DC and St. Louis.

Potential development sites include nuCLEus, the Caxton Building parking lot, the parking lot south of the garage City Club Apartments will use for residents' parking, Carnegie-East 9th and East 9th-Bolivar. The last site was put on the market last month by Geis Companies which is apparently hoping to catch this rising tide.

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Seeds & Sprouts XX -- Downtown moves signal project, Morgan Stanley shrinks office & more

This is the Twentieth 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.

Dave's Cosmic Subs and Souper Market will move in the coming
months from the Baker Building on East 6th Street to The Standard
on West St. Clair Avenue (LoopNet, SkyscraperCity.com).
CLICK IMAGES TO ENLARGE THEM

Downtown moves may signal historic renovation project

In the coming months, look for two downtown Cleveland tenants to switch addresses. And they're moving from one historic to another historic building, according to a tweet last week by the Downtown Cleveland Alliance.

Dave's Cosmic Subs and Souper Market will both move from the Baker Building, 1900 E. 6th St., to the Standard Apartments, 99 W. St. Clair Ave. At the Standard, they will join Simply Fresh Market CLE, a small grocer offering fresh and prepared foods. The Standard was renovated in 2018 for $60 million by the Weston Group into 287 apartments with ground-floor retail.

Other Baker Building tenants have moved or closed in the past few years. They include Moriarity's Pub which closed in December after 100 years in business and Sapporo Sushi which moved to Lakewood. The 11-story Baker Building was constructed in 1919 as the Fidelity Mortgage Building

The moves, according to a source who spoke off the record, are to get out of the way of a pending renovation and conversion of the Baker Building. The Baker Building was acquired in early 2020 by Walton Enterprises of WalMart fame.

The most recent reports are that the Baker Building could be converted into a boutique hotel, possibly a 21c Museum Hotel. However, no building permit or other applications have been submitted to the city for any work on the structure. The building is roughly 50 percent occupied by office tenants.

There is an application for federal historic tax credits pending for the Baker Building. No progress has been made to advance them to final approval since Walton Enterprises updated the owner of record for the property in March 2020, public records show.

Morgan Stanley is the latest tenant in 200 Public Square to reduce
its office size and give back floor space to the landlord (Google).

Morgan Stanley giving back downtown office space

In a sign of the times, investment banking giant Morgan Stanley is cutting back on its Cleveland branch office space by nearly one-half. Due to increased remote working instigated by the pandemic, the firm is reducing its space needs at 200 Public Square downtown.

In terms of floor area, Morgan Stanley intends to reduce its space by 11,776 square feet. The New York City-based global company has occupied the entire 26th floor of the Cleveland skyscraper. Floors in the main part of the 45-story tower measure about 24,440 square feet of usable space, leasing documents show.

Morgan Stanley is renovating its remaining space and adding partitions to give back space to the building's landlord, an investor group led by New York-based DRA Advisors called G&I IX Public Square LLC. For the renovations and partitioning work, Morgan Stanley is spending $225,000, according to a filing with the city by project consultant HSB Architects + Engineers.

In the same building, accounting powerhouse Pricewaterhouse Coopers, LLP (PwC) recently notified the city it is giving back to the landlord 8,040 square feet of space on the 18th floor. On that same floor, PwC will retain 9,334 square feet of office space.

A 1950s-era office building in Kamms Corners will be modernized
and expanded vertically with new apartments and amenities (Fischer).

Kamms medical building to add 2 floors, apartments

An unusual proposal to rebuild a vacant, one-story medical building in Kamms Corners with renovated offices and a restaurant topped by apartments and crowned by a swimming pool won final approval from Cleveland's City Planning Commission Sept. 3.

SSA CLE, LLC plans to convert the 1954-built, 7,300-square-foot Riveredge Medical Building, 17730 Lorain Ave. into a mixed-use structure over the next year. The building is located across Lorain from Fairview Hospital. SSA CLE acquired the property in 2019 for $375,000, county records show.

Project architect Gary Fischer of Lorain said the owner of SSA CLE, Samer Al-Aish, intends to reside in the largest of four apartments that fill out the newly added second floor. That apartment, according to schematic designs submitted to the city, would measure about 4,600 square feet. It will have three bedrooms, three full baths, a lounge, game room, study, large dining room, two living rooms and a fireplace, plans show.

The other three apartments will be a studio and a pair of two-bedroom units with two full baths. All units will have balconies. Above them will be an indoor pool and rooftop patio for tenants only, public records show.

On the ground floor will be four medical offices with higher ceilings than before, advanced technology connections and floor spaces per unit ranging in size from 1,157 to 1,874 square feet. At the west end of the first floor will be a deli/restaurant space measuring 840 square feet that will have a 196-square-foot outdoor patio along Lorain.

"The offices are not rented but we're getting requests for them," Fischer said.

The project also garnered support from the West Park Kamm's Neighborhood Development Corp. and Ward 17 Councilman Charles Slife.

"I think that there's a lot of older medical buildings of this era in town," Slife said. "So I hope that this is the beginning of a precedent to bring some new life to some of these buildings which really have lower ceilings and aren't well suited to modern medical equipment."

Cherie Wine Bar will join two other new arrivals, Cocky's Bagels
and ESPN Cleveland, in the vacant ground-level storefronts seen
at left in downtown Cleveland's Flats East Bank (Google).

Wine bar to open at Flats East Bank

Building permits were submitted to the city of Cleveland Aug. 31 for the development of a new restaurant and wine bar to be located in a ground-floor space at Flats East Bank facing the Cuyahoga River. Cherie Wine Bar will occupy a 3,000-square-foot space next to Beerhead by early next year.

About $270,000 will be invested to fit-out the space with owner-supplied equipment, decorations, overhead door/entrance plus interior and patio furniture. The existing spot is vacant. HSB Architects + Engineers is overseeing the design work.

Cherie's will be next to a space where Cocky’s Bagels is opening a second location, in addition to its North Olmsted establishment. It will also join ESPN Cleveland which is relocating its broadcast studios and corporate offices from the Galleria at Erieview to Flats East Bank by the end of this year.

The L-shaped green patch of land is
the subject of a development plan by a
partnership led by The Orlean Co. (Google).

Partnership seeks to finish Rysar's Southington Manor

In 2006, Rysar Properties began constructing a 20-unit townhome development at 3120 E. 135th St. in Cleveland's Buckeye-Shaker neighborhood. But the housing crash of 2008-10 halted the project after only five townhomes were built. The rest of the property totaling nearly 1 acre has remained vacant and undeveloped ever since.

But in July, a partnership of Christopher and Charles Ficklin, organized as CNT Construction Co., bought the undeveloped land for $20,000 from Southington Manor Development LLC. The latter firm is listed as the applicant for a building permit submitted to the city on Sept. 1 for a 71,000-square-foot multi-family residential development.

Southington Manor is what Rysar called its 2006 development. And the LLC still lists to Rysar founder Kenneth Lurie who is now chief operating officer of The Orlean Company. Orlean is a well-known urban infill developer in Cleveland which currently has numerous homes under construction.

The proposed development will be much more dense than the 2006 development which totaled only 8,247 square feet with each of the five units ranging in size from 1,482 to 1,913 square feet. The number of units isn't identified in the pending building permit and Lurie couldn't be reached for comment.

So even if units in the new development averaged 1,500 square feet like those in the 2006 development, the 71,000 square feet would equal 41 homes. If apartments are planned, averaging a typical 1,000 square feet per unit, the proposed development would equal about 71 apartments. It will be interesting to see the details of what is planned for this site south of Shaker Square.

Tyler Kapusta contributed to this article.

END