jeremy borger [blog]

Downtown developers speak at Cleveland City Club

On Wednesday, April 23, Doug Price of The K&D Group, Scott Wolstein of Developers Diversified and Nathan Zaremba of Zaremba spoke at the Cleveland City Club. I finally found an audio podcast of the event, which you can download in MP3 format here. (60 minutes, 55 MB)

Overall, I thought it was a great forum. All three developers talked about their various downtown development projects. Doug spoke about the continued growth of Stonebridge and the renovations and improvements they’ve made at Reserve Square. He stated that the residential units in Reserve Square are 95 percent filled, their 250,000 square feet of retail space is full and that the attached parking garage is at capacity. There was a funny moment when Scott said his East Bank of the Flats project will include the first full line grocery store in downtown Cleveland and Doug corrected him, saying Reserve Square has a 20,000 square foot grocery store on the first floor.

Doug also spoke about the renovations starting at 668 Euclid Avenue this month. When completed, this building will have 236 rental units and 70,000 square feet of commercial space on the ground level. The old Dollar Bank building attached to 668 Euclid will be torn down, creating a plaza that will connect 668 Euclid to the Colonial Marketplace.

The K&D Group is also busy renovating the old Ameritrust site at the southeast corner of Euclid Avenue and East 9th Street. The Breuer Tower, which Cuyahoga County was going to tear down, will be renovated. The top half of the tower will be residential units and the bottom half will be a hotel with the main entrance to the hotel being the old Cleveland Trust Rotunda. Pretty cool entryway, I think, although I personally think the Breuer Tower is ugly. Yeah, yeah, it was designed by noted modern architect Marcel Breuer. That doesn’t make it automatically attractive.

I’ve heard rumors that the hotel will be a W Hotel, although the way Doug was speaking, it didn’t seem like any hotel operator has been finalized yet. He had an interesting story about a woman from New York who had never been to Cleveland coming to town to look at the Breuer Tower as a possibility for her hotel. He also brought her over to Stonebridge and Reserve Square, just to show her around the city a little bit. At the end she said, “This is a wonderful city. I can’t believe how wonderful Cleveland is. You guys gotta tell somebody.”

The building attached to Breuer Tower south down East 9th will be torn down and a new, 300,000 square foot office building will be built there, along with a new parking garage.

They spoke about the importance of the Euclid Corridor Project and how important that and the HealthLine will be for the future of downtown. Doug’s Ameritrust project and 668 Euclid are both along Euclid Avenue and Nathan mentioned the importance of the HealthLine connecting downtown with his upcoming Uptown Project in University Circle which he’s working on with East Fourth Street developer Ari Maron. That project, which should have more details coming out in the next month or so, will include upscale condos, entertainment orientated retail, service retail and student orientated condos.

Nathan also spoke about his Avenue District project, which is currently under construction. He said most buyers for that project are not former downtown renters, but people coming from the suburbs and out of town. The response to the Avenue District has been “overwhelming”. He thinks the 650 homes in his neighborhood can grow seemlessly into Cleveland State University. His goal is to make it a quiet, elegant neighborhood that will have locally operated restaurants, coffee shops and other necessary retail for its residents, but will not have bars, nightclubs or clothing/fashion stores. He and Doug are considering a campaign to promote downtown living to suburbanites.

The lack of downtown retail was a concern brought up by one of the members of the audience. But Scott says this is a national issue, not a Cleveland issue. Virtually every major city is seeing a drop in downtown retail as retail stores move to the suburbs. His East Bank of the Flats project will have 350,000 square feet of retail, but it will be more service, neighborhood orientated retail for local residents along with entertainment retail. He says that the recently built Steelyard Commons just south of downtown makes it even less likely you will see more retail chains being added downtown.

Nathan and Doug both agreed with Scott, saying their projects will include retail, but it will be retail for every day needs of the residents who live in their projects. You won’t see something like Beachwood Place downtown. And that’s true pretty much across the country with a few exceptions.

How do we maintain positive momentum downtown? Scott suggested using public money to bring in more private money. $140 million in public money is going towards his East Bank of the Flats redevelopment project, but it’s spurring $400 million in private investment. Putting public money towards projects that don’t enough create private investment isn’t smart. We need to leverage the $450 million in public money being used to build the convention center into $4 billion in private investment. If outsiders can make money in Cleveland, they’ll come here and then you’ll have money from outside of the region being invested into the region and that’s when things will really start to improve.

Nathan said that to keep the momentum going, it’s important to have an increase in “for sale” housing in downtown Cleveland, not just rental properties. When someone takes out a 30 year mortgage to buy something downtown, they have a much larger commitment to the downtown community than someone signing a one year lease.

Another topic was the lack of downtown greenspace. All three said it was important to have more parks and greenspace downtown. Doug said they’ve been working for two years to renovate Perk Park across from Reserve Square on East 12th Street and that these types of projects shouldn’t take that long. (it should be completed later this year) He also stressed the importance of making the lakefront an easily accessible, park-like space, similar to what they have in Chicago. The Ameritrust tower project includes plans for greenspace, as does 668 Euclid in the plaza that will be created by tearing down the old Dollar Bank building.

Scott said that there will be 3.5 acres of public space as part of his East Bank of the Flats project. He also said that the movie theater that will be part of his project is looking into making one of their screens outdoors. Cool! One member of the audience said he heard that the Port Authority will be moving some of their space from the east bank of the Cuyahoga River near Lake Erie to the west bank, destroying Wendy Park on Whiskey Island. Scott says that this is not going to happen and that Wendy Park is an important part of both his project and Doug’s Stonebridge project.

A member of the audience asked about sustainable “green” strategies they’re using in development. Scott said his Flats project will be the first LEED certified pilot project for green in the country. He said he’s talking with a hotel operator that is the one of the first green luxury brands in the country. One of the buildings in his project will have a green roof park above a parking garage.

Scott also mentioned that they’re looking into making the new convention center “green” and that many trade shows seek out green convention centers when making convention plans. He thinks this may become a requirement for some groups in the next five years, making Cleveland’s new convention center a very desirable location.

Nathan says his Uptown Project will be green certified as well and that the roof of the parking garage at The Avenue District will be an acre park.

Suspiciously absent from the panel of speakers was Bob Stark of Stark Enterprises who has a project under development to revitalize the Warehouse District. There was a recent tiff between Bob and Scott after it was learned that Eaton might move its headquarters to Scott’s Flats project instead of Bob’s Warehouse District project. When asked where he would invest $100 million downtown besides his own project, Scott said that he thinks downtown could still support another first class office building as part of another mixed use project. Was he holding out an olive branch to Bob?

When speaking of new office construction, people are sometimes concerned about what happens to the old buildings when some companies (like Eaton) move from an old building to a new one. Scott said that Class B and C office space that older buildings offer can be very competitive with office space in the suburbs from a cost per square foot standpoint. So as companies that are already downtown move to newer office buildings, companies could be lured downtown from the suburbs, making a denser, better downtown.

It’s great to see multiple private companies with various mixed use projects underway downtown. I hope they’re not slowed down by government red tape and that the next few years bring some great things for Cleveland.