The Cleveland Heights-University Heights School Board is expected to consider a tax abatement for the proposed Meadowbrook and Lee development at its meeting Monday, Nov. 5.
Cleveland Heights City Council and developer The Orlean Company are requesting an 11-year, 80 percent tax abatement for modern apartments and retail or commercial space.
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.
Orlean Company president David Orlean said he hopes to start the project in the spring of 2013.
"We’re just really hoping that the abatement is approved because we need it in order to make this feasible, and I think it would be a great enhancement to the Cedar Lee neighborhood," Orlean said.
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.
Mayor Ed Kelley, Vice Mayor Dennis Wilcox and Orlean first presented the idea to the school board in July.
“Right now it’s netting zero for everybody involved, including ourselves, you guys and the library,” Kelley said at that meeting, noting that the project would not go through without the abatement.
The more than 70-unit building would house studio, one and two bedroom apartments ranging from 513 square feet to 1,138 square feet, according to early proposals. Though Stuart Friedman, spokesman for the Orlean Company, said it's too soon to talk exact rent prices, rates will likely be "a little bit north of a $1.50 a square foot."
"I think it’s a little premature to get specific about rents at this phase of the game because we’re still running various scenarios. I think it's fair to say that our rents will probably start north of a buck fifty a square foot," Friedman said. "It’s going to be more expensive than a Euclid Heights apartment that’s 150 years old."
If the rate is about $1.50 per square foot, that would mean monthly rents would range from $770 to $1,700.
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. Friedman noted the buildings would have features that older Cleveland Heights buildings do not, like air conditioning, and will follow green zoning standards.
Orlean also said the company is still updating architectural drawings, determining what construction costs will be and pursuing financing.
And The Orlean Company has established a limited liability company to take title of the project and property, called the New Meadowbrook-Lee Development Partners LLC, or NMLDP, said John Gibbon, law director for Cleveland Heights. The principals listed are David Orlean and Michael Wager.
Gibbon said Ken Lurie, who worked with Orlean on the Cleveland Heights Bluestone Community, a residential development of townhomes across from Severance Town Center on Mayfield Road, was listed as a contact person on the resolution council passed Aug. 20 to seek a tax abatement from the board.
"And under Ohio law, if you’re seeking tax abatement, the owner of the project cannot be delinquent in payment of real property taxes anywhere in the state. Apparently Lurie is delinquent on taxes," Gibbon said, adding that he first heard the information from Cleveland Heights resident Garry Kanter, who has written blogs about his concerns over the development on Cleveland Heights Patch. "As far as the city knows, and all the paperwork we've received, it was never suggested that Ken Lurie was going to be an owner of this or a principal in the company."
An article posted about a year ago on News Channel 5 indicates that Lurie was listed as one of County Executive Ed FitzGerald's "Dirty Dozen” delinquent taxpayers, and at that time owed nearly $500,000.
Fran Mentch, another Cleveland Heights resident who has spoken against the proposal, said that people can "debate all day about whether or not developing Meadowbrook-Lee is a good idea." But she believes there isn't a market for it, based on the vacancy rates in the Cedar Lee area.
If the school board approves the tax abatement, a development agreement would have to be formulated and approved by council. The project also needs to be reviewed by the Planning Commission, Architectural Board of Review and possibly the Board of Zoning Appeals, Kelley said.
Wilcox said he will attend the Nov. 5 school board meeting.
"We're just crunching numbers and making sure we explain to the board why this would be necessary to complete the project," he said.
Kelley said in an interview over the summer that he was "pumped" about the development proposal.
"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."
Friedman said the Orlean Company can offer something that's not available in Cleveland Heights.
"Cleveland Heights, and especially the Cedar Lee District, is a magical, special place. You can’t invent that kind of place. You can’t build it at Legacy Village or at Crocker Park," he said. "But when you look at the residential fabric in Cleveland Heights, especially the multi-family apartments, there really hasn’t been a new apartment built there in years. The Orlean Company has built Bluestone, and we can’t tell you how many people take a look at some of our condos and say, 'Boy, I wish I could rent this.'"
What do you think about the development proposal? Tell us in the comments below.
For more background on the Meadowbrook and Lee proposal and the history of the property, browse our articles below:
Updated: Council Will Request Tax Abatement For Lee and Meadowbrook
Developer Proposes Modern Apartments At Meadowbrook and Lee
A Plan For Meadowbrook And Lee Could Be Finalized By Summer
Cleveland Heights Seeks Ideas From Developers for Lee Road Lot