Last week Cleveland City Council heard more details about the major facelift planned for the lakefront...near the Rock and Roll Hall of Fame and FirstEnergy stadium. The project would eventually have 1,000 residential apartments, 80-thousand square feet of office space, and space for retail. The city picked the developer in March, but now comes putting the plan into practice. The developer, Dick Pace of Cumberland Development, insists the project won't rely on city subsidies to reach the goal of creating a downtown neighborhood.
PACE: “We hope it will be a wonderful mixed-use community, with mixed ages and mixed demographic. The key piece for us in creating a neighborhood is having it centered on a school. The ninth grade for the MC-squared STEM school is already there. We want to leverage off of that, and build a school which starts at age zero and all the way up to kindergarten, and from kindergarten to eighth grade, which will then feed into the STEM school. So we think that’s a key component to having a neighborhood downtown.”
GANZER: “I saw a piece in the Wall Street Journal the other day about putting apartments into downtown Cleveland, and one of the prices mentioned per month was, I think, $2500 per month for an apartment. Can you give a range for what you are expecting for these units yet?”
PACE: “We haven’t finished all of our demographic studies yet, and all of our market studies, for the housing piece. But there will be a range. Certainly there’ll be high-end housing, because it’s such a great location that demands that. But it’s also…we want to see families, and we think we can serve those young families in an active, healthy community down there on the waterfront. By having a school that’s walkable, we think that’s going to create a learning community. So we want to see the teachers who teach at that school be able to live in that community as well.”
GANZER: “Where is most of the financing coming from? Is this mostly a private venture?”
PACE: “Our development is not asking for any subsidy from the city, which I think is unusual. We are benefiting from the fact that the Flats East Bank is already up and running, and has proven the market. There are certainly public components. We will rely on the city for the things you normally rely on the city for—for the public infrastructure, the streets, the utilities, those types of things. But everything within our development site we’re doing with private financing, and we think that financing will be available for the project.”
GANZER: “Are the banks working with you now? That’s something we’ve thought about post-financial crisis, some of the banks are still really tight with credit. How tight has it been for you?”
PACE: “It’s been incredibly tight, especially with a development that they would normally deem as speculative. I think that’s starting to open up. We’ll also probably be working with insurance companies and pension funds, and also with some private investors as well. So it will be a wide range.”
GANZER: “You mentioned recently that this project’s going to be phased-in. Can you talk about what that actually means? How many years we’re looking at before having something there on the lakefront?”
PACE: “We hope to get approval from City Council within the month, and then we hope to be able to do the due diligence—things like environmental, structural issues—to prove out the financing and be able to close financing hopefully by the end of the year, and break ground a year from now. That would be for the first phase. We’re doing this in three phases. The first phase will be generally around north coast harbor, including the retail office components and 250 apartments of the thousand.”
GANZER: “There’s a lot of excitement around the project, thinking about the lakefront being built up, but there are also skeptics. Some people have told me off-mic that we’ve heard plans like this before, but they fall through…”
PACE: “Well, a couple things make this timing the right timing for this project. One is that the mayor is fully behind the project. Second piece is the mayor’s laid the groundwork by getting the land available for development. The port is consolidating their operations to the West, and with that..that makes that land available for the city to lease. We are not buying the property, it will remain the city’s property. With those things in place it makes this a real project.”
