buy timberland boots Cleveland’s western rim embarks on development boom
Suave Peter Galvin, who retired a decade ago after a 50 year career in the Cleveland real estate business, organizes trolley tours for friends and professional colleagues of the city of Cleveland. He just added a new leg to the University Circle and downtown Cleveland circuit: the western rim of Cleveland from Ohio City to the Detroit Shoreway neighborhood.
“Real estate is on fire over there,” said Galvin, whose late father built what’s now known as The Sphere apartments downtown.
“I realized the housing going in on the West Side was never produced on the East Side,” he said. “As newlyweds my wife and I would have loved to live in such a place. It was no man’s land over there then. But now it’s growing because downtown cannot meet the demand. Even people in my industry don’t appreciate it.”
After decades of incremental efforts ranging from restoring Civil War era homes in Ohio City to remaking upper floors of commercial buildings in the Gordon Square with affordable housing, a new scale and level of investment is beginning to transform the western rim of the city near Lake Erie’s shoreline. Between West 25th and West 117th streets, real estate projects totaling more than $350 million are proposed or under construction that stand to add more than 1,000 dwelling units, both rental and for sale, to the stretch.
However, the impact is muted by Cleveland’s tendency to think of the swath as different areas. The western rim is known by many names, from the Edgewater, Cudell, Detroit Shoreway and Ohio City neighborhoods to new ones such as Hingetown and SoLo south of Lorain Avenue.
Similar dynamics are at work in the transformation, prodded by local development corporations and stoked by property tax abatement, neighborhood financial incentives and, most of all, by the rush of millennials to the urban core.
The impact of the most recent development wave, launched by Mariner’s Watch, which added the first new building with 62 suites of luxury rentals on the near West Side in decades, is just starting to be felt.
The first eight residents recently moved into Vintage Development Co.’s Edge 32 project at West 32nd Street and Detroit Avenue. Builder Chip Marous said the tenants are in on the three floor side of the building south on the side street. The taller five story wing facing Detroit will be finished in July.
The building already is one third leased, and the key rental season is just beginning.
“It’s just 60 suites. It’ll go fast,” Marous said.
Likewise, tenants will start moving in this Wednesday, May 10, at Clinton West Apartments, as the doors will open in the first of 70 suites at 3107 Clinton Ave. That project, by developers Fred and Ethan Geis and Chad Kertesz, will have one bedrooms above $1,000 monthly; units with two bedrooms, a den and 2 1/2 bathrooms go for $3,500 a month.
At West 65th Street and Breakwater Avenue, the first 100 of 306 suites at The Edison are open for occupancy.
Even before all these new neighbors move in, more projects are underway.
Chagrin Falls based Snavely Development Co.’s 25D project its formal title is still under wraps includes apartments, retail and office space on the north side of Detroit at West 25th in a $60 million first phase. A second phase across Detroit incorporates renovating the Forest City Building on Detroit’s south side as offices and retail, and in the future, affordable housing.
And before that five story building rises all the way up, the latest project to surface is an 11 story apartment building with 161 suites and first floor retail at 2817 Detroit. The $50 million Church and State Apartments project is planned by a team that incorporates Hemingway Development, which includes Fred Geis, along with Hingetown developers Graham Veyse and Marika Shioiri Clark, and entrepreneur Brent Zimmerman.
This whirlwind of activity has many components.
Rick Foran, who developed the West 25th Street Lofts in a complex that incorporates an 1872 vintage building in an 83 suite complex at 1526 W. 25th St., said, “Ohio City is more of a neighborhood than downtown. People think they can walk downtown to eat and drink.” There’s also a Dave’s Supermarket nearby.
While the mass of millennials moving in is driving the changes in the West Side neighborhoods, older people are increasingly joining them.
“A third of our tenants are over 60,” Foran said.
Pete Snavely Jr. said his family owned company settled on its site because of its location near the Lakefront West project, the $90 million remaking of the West Shoreway as a tree lined boulevard with multiple access points to the lakefront. The operation of the Ohio City business improvement district was another plus, as were plans for the park on nearby Irishtown Bend.
“We’ve seen first hand what this kind of investment can do in other cities,” said Snavely, who also has built in Denver. He traces his interest in the Cleveland neighborhood to visiting a friend’s home at Battery Park, the lakeview community at West 73rd Street, where he saw what the area offers.
While developers tout lakeviews of their projects, more is afoot than that.
Bob Brown, a former Cleveland city planning director, said the lakeviews are nice and an asset, but what made the area grow was the revitalization of the neighborhoods as attractive places to live.
“It’s the people, not the views,” Brown said. “Most people on the West Shore corridor do not live on the lake.”
The idea of remaking the Shoreway to a boulevard came out of the city planning department, spawned by a view of seeing the area develop as a mixture of uses in a walkable neighborhood. Another factor often cited is proximity to downtown and University Circle, the city’s largest and second largest job centers, and growth of downtown as a sports, entertainment and cultural setting.
“We were more tentative then,” Brown said of the city’s Civic Vision 2000 plan. “Planners are optimistic. But we’d be more confident today.”
Other factors are more fundamental to real estate development. Most observers downplay the impact of low interest rates in the period following the Great Recession, but it’s part of the picture. Another is that lenders want multifamily projects, several developers say, which accounts for more rentals than multifamily for sale suites.
Moreover, Detroit Avenue has a huge number of parking lots along its entire spine. Tom McNair, executive director of the Ohio City Inc. neighborhood development group, said the parking lots and underused industrial properties create opportunities for development sites of three quarters of an acre. That’s tiny in typical development terms, but land wealthy in an urban setting where single family homes are on tiny lots.
Adrian Byrne, a real estate consultant who is chairman of the Cleveland chapter of the Urban Land Institute development trade group, said developers are responding in the neighborhoods to the 5% vacancy rate in the expanding downtown rental market. Also important: Cleveland City Hall has been stable and lacks the many fights of decades past.