Euclid Corridor project driving over $4 billion in Cleveland development

2/10/2008

$4.3 billion - That's roughly how much fresh investment is being poured into the 4½-mile-long strip of land flanking Euclid Avenue, the city's Main Street, between Public Square and University Circle.

The spending, which encompasses everything from museums and hospitals to housing and educational institutions, includes projects completed since 2000, those now under way and those scheduled to start within five or six years.

Private developers with proven records as doers, not speculators, are gearing up to launch projects worth more than $1 billion. They include Douglas Price III, Nathan Zaremba, Ari and Richard Maron, and Gordon Priemer.

The amounts they and nonprofit institutions are investing will easily dwarf the money spent by government and partners in the 1990s on sports stadiums and the Rock and Roll Hall of Fame and Museum.

One big reason for the energy is the Greater Cleveland Regional Transit Authority's $200 million Euclid Corridor project, which is reshaping Euclid Avenue around a bus rapid transit line.

Pundits have long derided the project, funded primarily by federal money, as a boondoggle. Media coverage has focused primarily on businesses that failed during construction, along with the hassle of negotiating a sea of orange traffic cones.

The mortgage-foreclosure crisis, which has left as many as 12,000 homes vacant in Cleveland neighborhoods, has also obscured the impending rebirth of Euclid Avenue.

But the developers say they see what's coming. With the RTA project due for a ribbon-cutting in October, they're rushing to renovate empty buildings and buy vacant lots.

"I'm a living example of it," says developer Dick Pace, who has spent $7 million over the past two years to turn a 1910 auto showroom at East 71st Street and Euclid Avenue into labs and offices for pigment scientists, biomedical firms and startup entrepreneurs.

"Before Euclid Corridor, I didn't feel it was a good investment," he said. Now his project is so successful, he said, he's looking for other buildings along the street to buy and rehab.

Pace and others say that by connecting downtown and University Circle, the city's two big employment hubs, Euclid Corridor is adding value and potential to everything that lies between.

Midtown getting

an uptown feel

Indeed, the price of an acre in the long-blighted Midtown area has doubled in the past five years from $200,000 to $400,000, said Jim Haviland, executive director of the nonprofit Midtown Inc., which has assembled 15 acres along Euclid Avenue for redevelopment.

Aside from the anticipated boon for riders, the RTA project is changing the mood on the avenue by freshening a major piece of public infrastructure with new utilities, sidewalks, traffic lanes and transit stops.

"Developers gravitate toward places where they see investment happening," said Lillian Kuri, director of special projects for the Cleveland Foundation. "There's no question [about Euclid Corridor], it's a catalyst."

The robust growth of institutions on or near the avenue, such as the Cleveland Clinic and Cleveland Museum of Art, while not caused by the Euclid Corridor project, is likely to expand bus ridership and encourage further investment.

"It's huge," said Edward Hill, interim dean of the College of Urban Affairs at Cleveland State University. "I look at Euclid Corridor and, to me, it's the single most exciting thing since the opening of Jacobs Field -- and it has much more economic meaning."

If the momentum continues, blighted sections of Euclid Avenue could fill up with renovated apartments, retail shops, research labs, and medical and cultural facilities. Many projects are to break ground later this year or in 2009, just after Euclid Corridor is finished.

"It's going to be a visual delight, and everybody's going to be shocked," said David Goldberg, co-chairman of Amtrust Bank and an investor along the avenue. "I won't be shocked, because I know what's happening now. The city is at a tipping point."

This is still hard to imagine downtown, where many buildings along Euclid Avenue stand vacant. But East Fourth Street, where the Marons have invested $110 million, is humming with nightclubs, apartments and restaurants.

Developers including Price and Eli Mann are hustling to join the Marons. Price wants to fill the vacant former William Taylor & Sons department store at 668 Euclid Ave. with apartments. He also wants to renovate and expand the empty Ameritrust bank complex at East Ninth Street and Euclid Avenue with apartments, a hotel and offices.

Mann bought five mostly vacant buildings between East Ninth and East 12th streets, including the Cleveland Athletic Club building, and plans to spend $70 million to fill them with apartments and retail. Mann's architect, Jonathan Sandvick, wants to peel off glass and metal siding to reveal early 20th-century brick and terra cotta facades.

Farther up the avenue, CSU and development partners have started spending $300 million on academic buildings, offices and housing.

In University Circle, the Cleveland Museum of Art is nearly halfway through a six-year, $258 million expansion and renovation. The Cleveland Clinic is building $868 million worth of projects, including a giant new heart institute. University Hospitals has $326 million worth of investments on tap.

Even Midtown, where development has lagged, is showing signs of vitality.

"I live it every day," said Scott Garson, senior vice president of NAI Daus, who is spending $10 million to turn the vacant Victory Building warehouse at Euclid Avenue and East 70th Street into 102 apartments.

City is looking

forward, not backward

The new Euclid Avenue won't resemble sepia-toned photographs of the 19th century, when the mansions of Millionaire's Row lined the street. Instead, the avenue will be populated by students and medical workers, retirees and empty-nesters, who will be happy to ride the bus and save thousands of dollars a year by living without a second car.

Developers want to provide their buildings with cars for short-term rentals, and include RTA bus passes with leases. They say it will be far quicker to go from a downtown apartment to the Clinic on the bus than to drive and hunt for a parking space.

Trends contributing to the rebirth on Euclid Avenue include the rising price of gas, which encourages transit use and redevelopment of the urban core. Federal and state tax credits for historic preservation have tipped the balance in favor of renovating older buildings downtown. Growth in the medical sector is attracting research grants, venture capital and workers. A back-to-the-city movement among young professionals and retirees is also fueling growth.

Leadership is another big factor. Top positions at major institutions along Euclid Avenue are held by advocates of New Urbanism, a type of city planning that caters to pedestrians and mass transit, rather than to the automobile.

At CSU, campus planners under President Michael Schwartz tore up the master plan they inherited from former president, Claire Van Ummersen, which would have connected the university firmly to the Inner Belt freeway and sealed its destiny as a commuter school.

CSU's new master plan envisions a residential campus with new apartment buildings rising north and south of glassy new academic buildings along the north side of Euclid Avenue from East 17th Street to the Inner Belt.

In Midtown, Haviland prepared for growth by leading the creation of a new zoning code, which outlaws stand-alone fast-food restaurants and requires new buildings to devote at least 60 percent of their ground-floor area to retail or other active uses.

At the Cleveland Clinic, Chief Executive Officer Dr. Delos "Toby" Cosgrove recruited Berkeley, Calif., landscape architect Peter Walker to design parklike outdoor spaces to soften the Clinic's gigantic new buildings -- and to make Euclid Avenue more pedestrian-friendly.

Chances for architectural achievement are high, with institutions such as the Museum of Contemporary Art Cleveland, the Cleveland Institute of Art and CSU hiring star designers for signature projects.

Then and now,

Euclid Ave. is special

The impending revival has a certain déjà vu quality, said Christopher Leinberger, a visiting fellow at the Brookings Institution in Washington, D.C.

Every city has a "favored quarter" with a spine that connects the downtown to the wealthiest close-in suburbs, he said. In Cleveland, it's Euclid Avenue, which is being reborn for the same reason it attracted wealth in the 19th century.

He compared the avenue's renewed potential to that of great streets such as Massachusetts and Wisconsin avenues between Dupont Circle and Bethesda, Md., in the Washington area or Peachtree Street in Atlanta from Midtown to the Buckhead neighborhood.

What's different here is that the catalyst in Cleveland is bus rapid transit, a relatively new idea in the United States. On RTA's "Silver Line," as it's called, diesel-electric buses will move quickly along special lanes with coordinated lights at intersections.

Euclid Corridor was one of 10 bus rapid transit demonstration projects launched by the Federal Transit Administration in 1999 in Boston, Charlotte, N.C., Miami, Las Vegas, Honolulu and other cities. It's also a vastly scaled-down version of what planners envisioned decades ago as the "Dual Hub," a light rail line connecting downtown to University Circle.

City planning literature is packed with proof that streetcars and light rail inspire "transit-oriented development." So far, it seems, bus rapid transit is doing the same in Cleveland.

The $4.3 billion figure cited above is based on news stories and interviews with developers. It doesn't include the $200 million Euclid Corridor project itself. Nor does it include projects such as developer Scott Wolstein's upcoming $400 million redevelopment on the east bank of the Flats, or Robert Stark's proposed $1.5 billion development in the Warehouse District.

Nevertheless, the numbers are adding up quickly as momentum builds.

"Every day, more projects are being planned," Goldberg said. "At a certain point, you reach a critical mass and it becomes self-sustaining."

City planners and foundation officers hope the growth will spill into the surrounding Hough, Fairfax and Central neighborhoods north and south of the Euclid Avenue zone.

Already, there are signs of that happening. The Finch Group of Boca Raton, Fla., and Heartland Developers of Cleveland are planning a large residential development in Hough called Upper Chester, north of the Cleveland Clinic and west of East 105th Street. The Clinic is collaborating with the nonprofit Fairfax Renaissance Development Corp. on a $28 million biomedical research facility on Cedar Avenue.

"The Euclid Corridor project was always about connecting those two centers [downtown and University Circle] through Hough and Fairfax in a way that creates spinoff," said Cleveland Planning Director Robert Brown.

Despite the emerging benefits, the rebirth of Euclid Avenue may have only limited impact on the city as a whole, said James Rokakis, Cuyahoga County's treasurer. Too many neighborhoods are being hollowed out by defaults on subprime mortgages. The new growth along Euclid Avenue, while laudable, won't do much in the short run to boost school tax revenues, because much of the new development is tax-exempt, he said.

Caveats aside, there's a striking energy among those involved with Euclid Avenue. In a city pummeled by news about crime, population loss and decay, it's a great, shining exception -- and one solid reason to be excited about Cleveland's future.

To reach this Plain Dealer reporter:

slitt@plaind.com, 216-999-4136

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