Cleveland City Council has approved a $12 million deal to buy Shaker Square out of receivership and place it in the hands of two nonprofits.
The property, now owned by the Coral Companies, is in foreclosure. The city’s loan would allow the two nonprofit developers, Burten Bell Carr and New Village Corporation, to buy the site, providing Coral with the money it needs to settle up with the lender, Wilmington Trust.
The developers are hoping to raise $5.25 million to make capital improvements at the square while searching for a long-term owner, according to notes presented to council. A steering committee with representatives from the city and nonprofits would monitor marketing, operations and sale of the square.
A large portion of the loan is considered forgivable, and the city expects to recoup around $6 million to $7.5 million, interim Economic Development Director David Ebersole said. The city and its partners hope to sell the square in five years, he said.
Terri Hamilton Brown, a consultant on the project, said she plans a “community visioning process” to gather input on merchants and the square’s green space.
Planners will interview residents and hold meetings to examine how the square “will interact with the surrounding neighborhoods and regain its status as the anchor and catalyst that it has been in the past and can be in the future,” she said.
One point of consternation in the debate over the deal is Shaker Square’s value. The square was appraised at $14.9 million in March 2020 for a refinancing deal that fell through, according to the notes provided to council. Cleveland Neighborhood Progress, the parent of New Village, has placed the current value at $5.6 million, according to the notes.
Late last year, then-Ward 4 Councilwoman Anita Gardner put a hold on the plan to purchase the square, leaving it up to her successor, Deborah Gray, to decide. Gray last week signaled she would withdraw opposition to the loan, saying she had needed time to understand the deal.
At a committee meeting Monday afternoon, Gray said the city ought to pay similar attention to the rest of her ward, particularly apartment buildings she said had fallen into disrepair.
“I want to see Shaker Square thrive,” she said. “And to do that, we must make sure we are going to also stabilize the apartment corridors by holding the owners of all the broke down apartments accountable.”
Other council members generally voiced support for the deal at Monday’s committee meeting. But they also urged representatives of Mayor Justin Bibb’s administration to support flailing commercial centers across the city.
Ward 8 Councilman Michael Polensek, whose North Collinwood neighborhood is losing a Dave’s grocery store, said the city needed a “collective game plan” to shore up commercial strips.
“It’s been made clear to me, the people I’ve talked to in the last several weeks, this is the tip of the iceberg that we’re dealing with,” he said.
