CLEVELAND, Ohio – Apartment buildings could start climbing early next year at the edge of a Warehouse District parking lot, forming the first corner of a project that eventually might grow to 1,200 residences spanning two city blocks.
Members of the Asher family have owned a sea of parking lots just northwest of Public Square for years. Now their family-run real estate company, Weston, Inc., is teaming up with Daniel Walsh, a well-known local banking executive who launched an apartment-investment business last year, to pursue a residential vision for one of the center city's largest blank spots.
Their initial plan: 352 apartments, ground-level retail and parking spread between an eight-story building and a 23-story tower at the southeast corner of St. Clair Avenue and West Sixth Street. Their ultimate vision: More than 3 million square feet of development, with green spaces and patios lining the streets and rooftop enclaves where apartment-dwellers could swim, cook, lounge and walk their dogs.
This isn't the first go-round for Weston, which considered selling its lots to developer Bob Stark before the recession and joined with an out-of-state developer in 2009 to announce an office-heavy, mixed-use project that never materialized. But T.J. Asher, the company's chief executive, and Walsh say this iteration is different.
Their plan, which will get its first public airing at the Cleveland City Planning Commission today, is almost all apartments, with tucked-in parking and retail lining the streets. It's split into four bite-sized phases, which might take five years to build between West Third and West Sixth streets and Superior and St. Clair avenues.
And the proposal dovetails with the national growth of downtown living and steady demand for rental housing in the core of Cleveland, where more than 13,000 people now live and rising rents are making new construction more feasible.
"We've done a lot of analytics around multifamily, and we believe there's a lot of depth to the market," said Walsh, who was regional president at Huntington Bank until early last year, when he left to form an investment firm called Citymark Capital.
"We've got the [Republican National Convention] coming up, and this is what's next," Asher said. "This is the next big thing."
The site, just shy of 6 acres, includes land the Ashers have owned for years and parcels they've recently bought, tied up through purchase agreements or are negotiating to buy through their joint venture with Walsh. The developers don't control – and expect to work around – the Stark Enterprises building on West Third.
They aim to break ground in early 2016 and open the first apartments in mid-2017. Like other downtown developers, they'll have to work around the July 2016 political convention and any construction restrictions tied to that event.
Walsh and Asher wouldn't discuss their financing plans or potential project costs, beyond saying that the first phase of construction will surpass $100 million. It's fair to assume they'll take advantage of residential property-tax abatement, which the city routinely grants for new housing. Beyond that, details are scarce.
"As it relates to the budget, in terms of delivering a class A project at rents that support new construction, we believe that we're at that point," Walsh said. "We're obviously finalizing the budget to make sure it's supported by all the financing sources that are out there. And we're having conversations with the city to make sure we're delivering on our promises."
The Warehouse District site has re-emerged just as developers are plotting thousands of new homes, most of them for rent, in and near downtown.
The most ambitious of those proposals is Stark's plan for nuCLEus, a 3-acre Gateway District development that could include a skyline-altering apartment building, offices, a few dozen condos, restaurants, stores, a hotel and parking garages. A development scheme for city-owned land on the lakefront, north and east of FirstEnergy Stadium, is heavily residential. Renters are settling into an apartment building at the Flats East Bank, overlooking the Cuyahoga River.
Builders are kicking the tires on other potential high-rise tower sites. And developers hope to put apartments, plus other uses, in the few lingering – and large – historic office buildings that haven't already been converted into housing. Weston hopes to close on its financing for one of those conversions, the Standard Building north of Public Square and east of the Warehouse District lots, in December.
"I don't think we're being unreasonable at all to assume that we can continue to progressively add housing," said Joe Marinucci, chief executive of the nonprofit Downtown Cleveland Alliance. "If it were only downtown Cleveland experiencing this, I'd be a bit concerned. But the fact is that we're part of a national trend."
Joe Cimperman, the city councilman who represents much of downtown, described the parking lots as the missing link between the Warehouse District and Public Square, which is undergoing a park-like makeover set to be finished next year. "It's something that you can actually build and do, and it actually fixes the fact that we've created these vacancies on the street," he said. "This is going to be new construction in a way that we haven't seen in a while."
The first phase of construction would eliminate more than 200 parking spaces, in lots that Weston says are rarely full. The first apartment buildings would include 390 parking spaces and 22,000 square feet of retail. The complete, four-part project would comprise 1,200 garage spaces, roughly 400 more than exist today.
The city is considering a form-based code, a more flexible zoning overlay, for the Warehouse District site. The code change, which requires action by the planning commission and Cleveland City Council, would allow the developers and planners to be more creative and get around requirements for a series of variances.
"This is the start of the process," said Tony Coyne, an attorney working with the developers and the former, longtime planning commission chairman. "This type of zoning is relatively new to Cleveland ... and probably will start a discussion about modernizing the zoning code in general.
"It's difficult to look at a typical zoning code and be able to accomplish a 21st century development in an older industrial city like Cleveland."