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Developer Proposes Modern Apartments At Meadowbrook and Lee

Cleveland Heights has selected The Orlean Company's idea for apartments and retail or commercial space for the vacant lot near Meadowbrook and Lee roads in the Cedar Lee Business District.

The City of Cleveland Heights sent to developers and architects in November, asking for their ideas for the vacant, grassy space on the corner of Meadowbrook Boulevard and Lee Road.

The city has The Orlean Company’s vision for what they said will be a luxury building with modern apartments and retail or commercial space. Mayor Ed Kelley said his dream is to have construction on the project start in the fall.

But a few things need to happen first.

Kelley, Vice Mayor Dennis Wilcox, Orlean Company president David Orlean and City Architecture president and founding principal Paul Volpe presented some details about the development idea for the one acre lot to the Cleveland Heights-University Heights School Board at its meeting July 17. Orlean asked the board for an 11-year, 80 percent tax abatement.

The more than $11.4 million project would bring in about $300,000 annually in property taxes abatement-free. If the school board approves the abatement, that number would go down to an average of $70,000 per year.

“Right now it’s netting zero for everybody involved, including ourselves, you guys and the library,” Kelley said, explaining that the city owns the land. The city aquired all rights to the space for $60,000 last year.

After the 11 years is up, the building would bring in an average of $440,000 in property taxes each year. The developer also said more residents would help the local economy and presented figures about how much revenue they'd bring in through income taxes, parking fees and other means.

Though The Orlean Company’s plans are not finalized, it proposes a four-story building with apartment units on the top three floors and commercial or retail space on the first floor.

There would be about 76 units of studio, one and two bedroom apartments ranging from 513 square feet to 1,138 square feet, and the developer estimates that 120 to 130 residents would live there. 

The drawings include a bike storage area, fitness room, theatre and a courtyard with green space. Photos of other Orlean Company projects show kitchens opening out to living room and dining room spaces, hardwood floors, tear drop and spotlight fixtures and stainless steel appliances.

The board asked how this would impact other property owners in the area trying to lease space to tenants.

They said that these housing units would likely attract residents who would not normally choose to live in one of the older Cleveland Heights apartment buildings.

“Quite frankly this offers something that’s not on the market right now,” Wilcox said.

Wilcox said that the school board approved an 11-year, 80 percent abatement in 2003 when the city thought it had secured a developer. The city also had a deal fall through in 2008.

“Since that time we’ve invested in building a parking garage adjacent to that property. The city has made a substantial investment in this property and that’s why it’s a unique site,” Wilcox said. “Even with all of those attributes, to get the quality project, the project that we want in our city that we think will really benefit our community and city, we still need some subsidy as was said. You could put up a project quite frankly that we probably wouldn’t be that excited about and that’s really not what we want to do.”

The Orlean Company manages 4,000 units of housing and to build The Community, a residential development across from Severance Town Center on Mayfield Road. They also manage Kenilworth MEWS.

Near the end of the meeting, Kelley asked how the board would like to proceed.

“We either have to move forward, or unfortunately this land will probably be vacant for another three to five to seven years," Kelley said. "Because we went through the process, we got three good things, but this was the one that had the young energy, the young professionals here that will eventually get married, raise their family, have their kids and buy another house in Cleveland Heights."

At the end of the presentation to the school board, members agreed that they would be interested in hearing more and will have their lawyers meet with the city's law department.

The city still needs to formulate a development agreement, Kelley said. The project also needs to be reviewed by the Planning Commission, Architectural Board of Review and possibly the Board of Zoning Appeals. Before being approved, also needs to pass legislation on the project, and the has approve the abatement. It is already zoned for mixed-use development, said Howard Thompson, economic development director.

Declan Synnott, owner of , hopes the project is approved and gets underway soon.

"Honestly, I think it’s great. The more people, the more action going on on Lee Road, the better it is for everyone," said Synnott, who is also on the Cedar Lee Special Improvement District Board. "I’m looking forward to it. I was looking forward to it when they were supposed to do it the first time."

Adam Fleischer, who is also on the special improvement district board and owns , said the development would help attract more people to the area.

"The idea is we want people to be aware that Cleveland Heights has a lot to offer," Fleischer said. "Maybe an old apartment building is not for them, and any option that would prevent them from going elsewhere ... is a good thing."

Kelley said he was "pumped" about the project.

"When you drive up and down the Lee Road area, you see this vacant piece of property. It’s like a missing tooth," he said. "It’s an over $11 million project ... This is just a financial win for everyone involved."

What do you think about the idea for a mix of housing and retail or commercial space on the land? Tell us in the comments.

Richard Hollis July 24, 2012 at 03:03 PM
I think that the figure on what the city bought the property for is incorrect. This will be the third attempt. I once asked a city official how he would like to live at Lee and Meadowbrook- "absolutely not." Why doesn't Cleveland Heights like a little green space?
Fran Mentch July 24, 2012 at 04:00 PM
I oppose any more tax abatements for new housing. If the market demands more housing, someone will build it. Current tax abated residential projects are unsuccessful. . The 7 year-100% tax abated housing projects in Cleveland Heights all have many vacancies, and have for several years. A quick check on the web indicates that 5 of 17 Mews homes are vacant, 21 of 110 vacancies at Bluestone, 13 of 68 at Courtyards of Severance and and Severance Place was forced by the market to shift from selling to RENTING. their units. A CWRU study on housing in the area found that Cleveland Heights was very high in new housing units and had the highest percentage of increase in housing vacancy. All the facts support NO TAX ABATEMENT.
Garry Kanter July 24, 2012 at 05:25 PM
Great job of researching and presenting facts, Fran!!!
Marc Lefkowitz July 24, 2012 at 08:03 PM
More salient still to the argument against tax abatements are, what's the rental vacancy rate in Cleveland Heights? My guess is demand is going up as the sub prime lending debacle has generated lots of renters to the city's benefit. Let's not just give away the store.
Richard Hollis July 24, 2012 at 09:12 PM
I recall reading some years ago that once a homeowner turned 62 (?) their property tax would not go up. I was told when Ruffing Montessori was being expanded to look like a warehouse, that I would receive a 10% reduction. I do not believe that ever happened. I need an abatement.
Richard Hollis July 24, 2012 at 09:21 PM
I could be wrong, but I believe that the parking garage was built because of the failed 2008 project, not after it failed. What would be the point in that?
Emily Jones July 24, 2012 at 11:53 PM
Again, Fran is giving misinformation to justify her positions. Fran, please give links to your alleged "facts". Here is the link to Bluestone and Kenilworth: http://www.liveatbluestone.com/ Fran's numbers are not accurate according to their "available" listings. As well, Bluestone has been constructing additional housing over the last couple of months. I would guess that most of the "available" housing is new 2012 construction. Fran, I will await your retraction for the misinformation you continue to disseminate on Patch.
ADAM WEISINGER July 25, 2012 at 10:55 AM
in addition to the Fran Mentch great stats I would like to add that within a 1/2 mile radius of this corner there are a total of 65 current active / pending residential listings of which 20 are vacant bank owned and or short sale homes which is 31% - within the same 1/2 mile we also have an oversupply of residential housing stock as within the last 3 months there are only 19 closed sales but there are a current 65 active listings which means that we have 10.27 months of current housing supply(which is high) and now we want to add to it. can we at least make it mixed use so we can genarate some jobs, and additional income/sales tax ?
Fran Mentch July 25, 2012 at 11:38 AM
Thanks, Adam. @Emily Jones. I stand by all of the numbers in my post. Courtyards at Severance opened in 2008:http://www.courtyardscleveland.com/2008_11_01_archive.html. All 3 tax-abated residential developments on Mayfield were started many years ago. The Bluestone and Kenilworth numbers are correct per the website you listed yourself. There are 21 vacancies at Bluestone. Here is a live search for condos for sale in Cleveland Heights. http://cleveland.condo.com/ForSale/United-States/Ohio/Cleveland-Heights-Condos. The last paragraph on this page is reflective of the fierce competition for sales in this market: http://www.highrises.com/cleveland/the-courtyards/
Garry Kanter July 25, 2012 at 03:39 PM
"The board asked how this would impact other property owners in the area trying to lease space to tenants. "They said that these housing units would likely attract residents who would not normally choose to live in one of the older Cleveland Heights apartment buildings." -------------- This is just more of the discredited Supply Side economics that also goes by "Trickle Down Economics" and "Voo Doo Economics". It has been disproven in practice and is contrary to the laws of Supply and Demand. It is a major component of the technique of transferring wealth from We The People to the 1%-ers. In no way does increasing *Supply* also increase *Demand*. Amy claims that adding more (subsidized!) rental units benefits existing landlords is illogical and unsupported. Let's see the studies that prove otherwise.
Garry Kanter July 25, 2012 at 08:21 PM
Even without BOE approval, the city can grant an abatement up to 75% for up to 10 years. I think the 80% for 11 years is a way to "share" the responsibility for the abatement with the BOE. The project simply cannot be "make or break" based on the extra 5% and the 11th year. If the council feels they *must* offer a subsidy, though the reasons escape me, why not an abatement that decreases each year, as rental income rises, and start up expenses are in the past?
Garry Kanter July 26, 2012 at 12:33 AM
"“Right now it’s netting zero for everybody involved, including ourselves, you guys and the library,” Kelley said, explaining that the city owns the land. The city purchased the space for $60,000 last year." If I was looking at the right properties in the county records, 687-08-001 & 687-08-004, one portion of the property transferred from Shaker Savings Assoc, the owner since at least 1975, to the city in 2005. The other from Clancy Management Corp in 2001. The tax assessment for the first parcel, and hopefully, the tax payments had been $14,000 in 2004. The 2nd parcel looks like it was $6,000 in 2001. But neither parcel has a sales price listed. I wonder why the city ever bought them, and removed them from the tax rolls? $14,000 for 7 or 8 years would be over $100,000 in tax collections. Plus the $6,000 for 12 years or so would be another $72,000. Not counting tax increases. Certainly nothing to sneeze at.
Garry Kanter July 26, 2012 at 10:04 AM
I wonder if new apartments would really attract non-traditional CH renters, or just cannibalize 75 traditional CH renters from traditional CH apartments and homes? Supply increases, demand stays about the same, and vacancies would rise and rental rates would tend to drop for the existing buildings. And if someone doesn't want a traditional CH apartment or home, maybe they're not CH material. And who says that non-traditional CH renter wants to be living right at Cedar-Lee? But who says that non-traditional CH renter that would want to live right at Cedar Lee even exists? I'm not buying it until I see the research. And then I'd want to analyze the research and the researcher. With the added bonus that the existing landlords would be subsidizing this new apartment building competition with their own tax $. Who wouldn't love that?
Richard Hollis July 26, 2012 at 10:33 AM
The owner of Clancy Management tole me a figure over $200,000. I know that the Super Fund was involved because of gas tanks, but it might be worth looking into.
Garry Kanter July 26, 2012 at 11:32 AM
Clancey purchased the property from the Gulf Oil Corp in 1985 for $85,000. There's no other sales pricing shown. But based on the tax $, one could infer that the Shaker Savings parcel was worth twice as much.
Garry Kanter July 26, 2012 at 03:11 PM
Well, if Severance Place is renting, than the non-traditional CH renter already has something available. I wonder just who these non-traditional CH renters are. What is their demographic?
Nina Woolf July 27, 2012 at 02:46 PM
I'm all for "We the People", but let's be somewhat realistic - when you're looking at the residency rates of CH overall you may not see the clear picture. Let's not pretend like all part of CH are equally appealing to "young professionals" looking to rent. Such renters are very mobile and look at many other nearby cities as possible options. A new apartment complex looking to gain a market share needs to be able to compete on everything from location to price point to amenities, etc. A lot of current vacancies around Coventry are old and tiny and have at least 15% location premium, but even so they seem to be doing fine. In my humble opinion, something cool and modern may bring fresh new blood to the area that depends on foot traffic. As far as tax abatement goes - tax abatement is how development companies make money - surprising as it may sound, they don’t build stuff out of the goodness of their heart. With the land neither being developed into another commercial project nor developed into a park – if the City lacks resources to make use of it on its own, it currently looks like the only reasonable alternative (while the land itself doesn’t depreciate, the eye sore can’t possibly be helping the businesses and nearby houses’ resale values). The abatement rate, however, looks a bit high to my untrained eye. I anticipate the City government will do its homework and look into what the rates are these days for similar projects before committing to anything.
Garry Kanter July 27, 2012 at 03:48 PM
What is this "eye sore" that you refer to, and how much $ would it take to make it more appealing?
Garry Kanter July 27, 2012 at 03:52 PM
The properties were *not* purchased last year. And the $60,000 has been difficult to confirm. I have asked the county for help in finding the correct $ values for the purchase, land clearing and environmental abatement. A person whose knowledge I respect told me these total costs are *much* higher than $60,000, maybe even approaching $1 million.
Nina Woolf July 27, 2012 at 07:32 PM
Eye sore is the undeveloped, un-landscaped piece of land. Appeal of the land, "as is", would improve with the help of a lawnmower. I get the feeling, however, that the City may want to do something more than that. How much money that would cost - I'm not knowldgeable enough on the topic to tell you. But I also won't make up numbers and stats to prove my point, or pretend like whatever the land what purchased for couple years ago (see you comment below) makes any difference in this discussion.
Richard Hollis July 27, 2012 at 09:38 PM
I certainly would not call that piece of land an "eyesore". What would be wrong, however, with some nice trees, which the city loves to plant on our treelawns to heave up the sidewalks, some wild flowere, even a public garden (with all of the security cameras you would not need to worry about somenoe stealing your vegetables) and some nice seating areas. Sweetie Fries could have an ice cream cart there in the evening.
Garry Kanter July 27, 2012 at 11:19 PM
You got it backwards. The $60,000 a year ago is what's out there as a "fact". I very clearly explain what I have, and have not been able to document.
Richard Hollis July 27, 2012 at 11:27 PM
In reality I think all of the security cameras with the flashing blue lights might drive everyone away. Ditch the lights and most people will not even know that the cameras are there.
Garry Kanter August 03, 2012 at 11:58 PM
A knowledgeable person explained that the $60,000 last year was essentially the cost of CH removing an "easement" that some federal banking authority had inherited from Ohio Savings, which had been Shaker Savings. The $60,000 bought out the rights to 1st floor bank office space and 15 parking spots. The city has purchased at least 5 parcels, including 3 homes on Tullamore. Plus gov't funded hazardous waste remediation, with $ like $399,000 and a 2nd one mentioned. If they can banter about that it was $60,000 a year ago, I can mention that they're leaving out a whole lot of info...
Garry Kanter August 04, 2012 at 12:46 AM
Plus the three houses on Tullamore purchased in 2001 for $95,000, $115,000, and $110,000. There's a $1 million spent there plus the lost tax collections.
Garry Kanter August 05, 2012 at 03:31 PM
Just say "no". Here's why: The project has a positive cash flow in the first year for the developer - even considering the debt service (loan repayment) and reserves (future maintenance expenses) - without *any* tax abatement. Developers like to use OPM - Other Peoples' Money. If things go right, in 15 or 20 years, they can end up owning a valuable asset without putting anything of their own $ at risk. Well, if he's cash flow positive in year 1, he'll be cash flow positive in years 2 - 11 when the rents are increasing and the various start-up expenses are a thing of the past. Based on his own figures then, the whole abatement is unnecessary. It is nothing more than a redistribution of wealth from We The People to a 1%-er. To the tune of $300,000+ per year for 11 years, more or less. And that totals up in the neighborhood of $3+ million that *won't* benefit the school district.
Chris August 09, 2012 at 03:10 PM
I agree with a lot of what has been said here. We have reason to be suspicious of the city's numbers. We have reason to be concerned about adding rental property to the city's inventory (capital), but we are definitely short of modern inventory in one of our walkable business districts (which is a distinction between the Cedar-Lee area and Bluestone/Severance). We also should be concerned about greenspace. (Why is there a small parking lot across the street from this lot when the city built a huge parking garage nearby? -- shouldn't this be a pocket park?) I'm not convinced that greenspace or apartments are the best use of this site. As much as the Cedar-Lee businesses would be happy to see more foot traffic, I expect that many businesses do not see much weekday lunchtime business. Something else that our city lacks is modern office space. Bringing in a business that would provide some foot traffic during the day should be part of any "mixed use" development.
Garry Kanter August 09, 2012 at 03:30 PM
Yes! I agree that the merchants of Cedar-Lee have a reasonable expectation that those parcels will *contribute* to the commercial vitality of the area. And that the property should be developed as a "Gateway" to move more foot, bike, & bus (and car) traffic to the more southern businesses on Lee. I don't think an apartment building with one floor of retail does a great job of this, at all. Let's get input from *everybody*, not just developers & consultants, on how to best accomplish this!!
Garry Kanter August 09, 2012 at 03:33 PM
Ken Lurie is a principal of the proposed project. ------------- LIST REVEALED: Cuyahoga County will crack down on 'Dirty Dozen' delinquent taxpayers ... Beachwood businessman Kenneth Lurie was unapologetic about his $447,922 tax bill for dozens of parcels on Miles Road in Warrensville Heights. “It’s in foreclosure. It was foreclosed on by the bank and I am not the owner of this any longer,” he said. County officials told NewsChannel5 Lurie is still responsible for the bill. Lurie abruptly walked away when 5 On Your Side Investigator Sarah Buduson questioned him about his unpaid taxes. ---------------- http://www.newsnet5.com/dpp/news/local_news/investigations/list-revealed-cuyahoga-county-cracks-down-on-dirty-dozen-delinquent-taxpayers
Garry Kanter August 09, 2012 at 04:03 PM
The above is from 10/31/2011.

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