William D. Friedman, President & CEO
We expect April 9th to be a historic day for the Port of Cleveland and for shipping and logistics in the Midwest. That’s when the inaugural voyage of the Cleveland – Europe Express will dock at the mouth of the Cuyahoga River and introduce a reliable way of moving goods from our region as the Great Lake’s only regularly scheduled express liner service to Europe. Two days later, the ship will be off to Antwerp, Belgium to complete the Express’ first round trip and begin providing what we expect to be major benefits – we expect up to 400,000 additional tons of cargo to travel through our Port, representing roughly 10-15% of Ohio’s European trade.
The liner service is a centerpiece of our continued efforts to evolve the Port to serve the 21st Century needs of Northeast Ohio’s business community, helping our region compete globally and positioning our service portfolio to act as a key economic driver. We are seeing success in our goals – last year, we experienced a 20% increase in the volume of tonnage shipped through our facilities. We attribute this major bump partly to our on-site investments, such as our rail loop, which helped more than double the amount of goods shipped by rail out of the Port in 2013. (You can read more about the success of our rail investment in this issue). Above all, we see the increase in volume as a testament to our spirit of partnership with local businesses, taking stock of their needs, and evolving our model to link them to an ever-evolving global economy.
The Port understands that Cleveland is a player in the global economy, and regional demand exists for shipping options to reach markets around the world. We know from our research that goods made here are used everywhere – you might not realize that Cleveland businesses are even shipping consumer goods for use in China. As the nation’s economy has gradually ramped up, we have seen the numbers demonstrate our local economy’s resiliency and continued capacity in manufacturing.
The liner service is a major investment by the Port, and a strategic bet on Cleveland’s future. We believe that our local businesses are strong, that unmet demand exists, and that we can free businesses from relying on East Coast ports, cutting time, expenses, and logistical headaches. The Express also meets our goal of promoting green, sustainable practices—shipping is the most fuel-efficient method to move goods, and shaves days off travel.
This time next year, we hope to report back to you on the progress we’ve made increasing cargo volumes and efficiencies, and continuing to reach new markets. We aspire to be a dynamic agent in Greater Cleveland’s economy, both through our continued efforts in development finance, environmental stewardship, and partnering to create a vibrant waterfront, but our focused push to innovate within our core maritime operations are critical to our strategy.
On the Docks
Port’s Investment in Rail Loop Pays Dividends
In late 2012, the Port of Cleveland invested in a rail loop along its docks to provide its customers with improved service and access to more North American markets. In 2013, the benefits of that investment began to be realized, with rail freight shipped through the Port reaching a number of new markets and a noticeable increase in tonnage and total cars shipped by rail.
“The rail loop has clearly made a difference for our customers, and expanded our reach into places we did not service previously,” explained Dave Gutheil, the Port’s Vice President of Martime and Logistics. “We’re now seeing freight travel as far as the west coast of Canada, and our volume is up overall – it’s everything we had hoped for through this investment.”
Cleveland Harbor Belt Railroad, a local shortline railroad, provides service on the Port’s rail loop, making the vital link between transportation options that was previously absent. Before the introduction of the rail loop, customers shipping through the Port lacked the ability to choose or switch between the two major, “Class I” rail carriers, CSX and Norfolk Southern. “CSX provided access to one side of the Port, and Norfolk Southern provided access to the other,” explained Gutheil. “So there was no real competition between the two carriers, which affected pricing and access to broader networks.”
Prior to 2013, the Port regularly reached existing markets in Indiana, Illinois, and Wisconsin by rail. (Goods that arrive at the Port by ship and are transported within Ohio typically move by truck due to the shorter distances). Since establishing the rail loop, however, cargo shipped by rail from the Port has reached parts of Oregon, Kentucky, New York, and Vancouver, British Columbia, Canada.
Total rail volume more than doubled in 2013, and Gutheil attributes the uptick in volume and the extended reach to a number of factors. “First, we now have greater competition, better pricing, and more reach because of customers new ability to always access both class one rail carriers,” he said. “But beyond that, the rail loop provides more connectivity, shorter transit times, and great on site, as needed customer service through Cleveland Harbor Belt. The increased efficiencies are significant, and time is money for our customers.”
Along the Water
Towpath Trail Partnership to Open Innovative Scranton Flats Section
This spring, the Towpath Trail Partnership will achieve a major milestone in their effort to create a unified, trail-focused park system, the Ohio & Erie Canalway National Heritage Area, stretching from Cleveland through Akron to Massillon along the route of Northeast Ohio’s historic canal system. In May, the Scranton Flats section of the park system will officially open, adding a significant length to the trail, and using creative environmental restoration to help address the Cuyahoga River’s long-term health.
“This brings us significantly closer to achieving our vision for the trail, but we’re equally excited about the environmental benefits,” said Tim Donovan, Executive Director Ohio Canal Corridor, a member in the Towpath Trail Partnership, along with Cuyahoga County, City of Cleveland, and Cleveland Metroparks. “This could provide a national model for other urban shipping channels on how to re-introduce naturalized river banks and help repopulate them with fish and other wildlife.”
When open, the 11-acre site, which fronts two thirds of a mile along the Cuyahoga River bank on the Scranton Road Peninsula in Cleveland, will offer a unique way for bikers, walkers, runners, and other users to experience the waterfront and downtown views in a restored river habitat. Before the Canal Corridor became involved, the site was sitting in a state of disuse and disarray.
“It was last used to operate a marina, but as you might expect on a site with an industrial past, the land was polluted, and filled with invasive plant species,” explained Donovan. The newly restored site is not only environmentally clean, but also features native plants expected to draw wildlife and new green bulkheads specially designed to harbor fish.
“We’re already seeing anecdotal evidence of success in our wildlife habitat efforts,” said Donovan, who noted a new sighting in the area. “Blue herons are hanging out, and they go where the fish are.”
The project grew out of an inventive, partnership-based approach to thinking holistically about the site and raising the necessary dollars. “Tim’s incredibly creative in finding ways to fund the trail, and look at the work through a collaborative, assets-based lens that brought numerous partners to the table,” noted Jim White, the Port of Cleveland’s Director of Sustainable Infrastructure Programs.
In his former position with the Cuyahoga Remedial Action Plan, White worked with Donovan to help seek and secure funding for Scranton Flats. Key funding for the $9 million project came from the Clean Ohio Fund, Great Lakes Restoration Initiative, US Fish and Wildlife Service, and Ohio Cultural Facilities Commission. Partners included Ohio Canal Corridor, City of Cleveland, Cuyahoga County, and Cleveland Metroparks, which developed the site plan to weave the trail with the habitat.
White sees opportunity for the Port to incorporate some of the Scranton Flats lessons as the Port embraces its role as the steward of an integrated Cuyahoga shipping channel, where business, recreation, and nature all peacefully interact. Specifically, he thinks the Port can adopt some of the green methods downstream at Franklin Hill, where geological issues have created concern over land sliding into the river.
“As we work to ensure that Franklin Hill does not collapse into the river channel, we can use green bulkheading to create habitats and support and restore the environmental health of the river,” said White. “And, we want to incorporate the proposed Lake Link Trail, which can act as a feeder to the Towpath, and connect it to Lake Erie.”
The grand opening ceremony in May follows on the heels of the 25th anniversary of Ohio Canal Corridor’s first River Sweep, an ongoing cleanup program that regularly brings together up to 1,000 volunteers to trail-blaze new greenspace areas along the Cuyahoga. Donovan likes the linkage since Scranton Flats was a former River Sweep site.
Will Friedman, Port President and CEO, praised Donovan’s role in Scranton Flats and the Towpath Trail. “It’s really a testament to Tim’s vision and determination over more than two decades to making the towpath trail into what it is today,” he said. “Something as creative and ground breaking as Scranton Flats just does not happen without someone like Tim driving it forward.”
Those who attend the grand opening will appreciate the transformation on site. The former vacant and polluted marina now features rain gardens, wetlands, bio swales, interactive historical nodes, an observation promontory, and, of course, the trail. Donovan is happy to open it to the public. “We were able to take abandoned industrial land, return it to its historical natural state through native vegetation, aquatic habitats, green bulkheads, and provide the public access through the trail and park, all combined with amazing views,” he said. “We think people are really going to enjoy it.”
For more information, visit: www.ohiocanal.org.
In the Community
Development Finance Highlights from 2013
In 2013, the Port of Cleveland’s economic development and financing work once again helped connect private capital to a diverse group of projects that help drive our local economy. From governmental and educational institutions to corporate world headquarters this work continues the Port’s strategic focus to facilitate opportunities for job growth and business expansion. “Last year, we continued to use creative methods to help local businesses and institutions make major investments that benefit our entire local economy,” said Brent Leslie, the Port’s Chief Financial Officer. Provided below are a few highlights that show the breadth of the Port’s work in in 2013.
Cuyahoga County Administrative Headquarters
Cuyahoga County’s efforts to centralize its operations are having a major effect on downtown Cleveland. Vacating the corner of Ontario and Lakeside has made way for a new convention center hotel, and the County is also investing on another key block, establishing its new central offices near East 9th and Euclid.
The new headquarters is being built by Geis Companies, and the Port assisted in financing the project by issuing $80 million in tax-exempt lease revenue bonds. When complete, the building will feature over 200,000 square feet of office space in a green, LEED-certified where approximately 700 county employees will work. The project also serves as the anchor development for the surrounding mixed-use redevelopment.
Beaumont School – Science Technology Engineering Math (STEM) Expansion
Beaumont School on North Park Boulevard in Cleveland Heights is undertaking a major campus expansion with the addition of a STEM (Science, Technology, Engineering and Math) building, as well as other improvements to existing facilities. The dedicated STEM space is the main focus of the project, with Beaumont creating a modern learning environment that will empower young women in key areas of study to help them compete in the new global economy.
The Port facilitated the issuance of $8,160,000 of tax-exempt revenue bonds to finance the construction. When complete, the project will add 25,000 square feet to the school’s campus, including the STEM classrooms and labs, a student commons, offices, and a new main entrance to the school.
OMNOVA Solutions, Inc. – Corporate Headquarters
OMNOVA Solutions, Inc. is a multinational, publicly traded corporation providing polymers, chemicals, and engineered surfaces for commercial, industrial, and residential uses in over 90 countries in North America, Europe, and Asia.
Headquartered in Northeast Ohio, OMNOVA was founded nearly 100 years ago in the tire and rubber industry and has evolved over the years to provide products used in everything from coated paper to carpeting to upholstery. The company’s most recent fiscal year showed over $1 billion in sales, and 2,390 employees across North America, Europe and Asia.
After a national search to identify the location for its new global headquarters, the company decided to remain in Northeast Ohio and build in Beachwood. The Port played a major role in assembling the creative financing package that made it easier for OMNOVA to remain in Northeast Ohio. That package included $7 million in Port-issued bonds to generate private investment, along with a State of Ohio Enterprise Fund Bond, tax increment financing, and a structured construction and lease agreement with the Port. OMNOVA expects to add 70 jobs to its existing 110 employees when it completes its new 57,000 square foot Beachwood headquarters.