In the Community
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The first office tower to be built in Cleveland in more than a generation is steadily rising along the Cuyahoga River and on track to open in May. The 23-story building will anchor the Flats East Bank, a new urban neighborhood that is the result of vision, savvy — and a hefty amount of persistence. It’s also a showcase for Port of Cleveland programs that help turn development projects into reality.
Phase I of the new waterfront community developed by a partnership of The Wolstein Group and Fairmount Properties LLC opens in the spring. It will include the Ernst & Young office tower, a 150-room Aloft hotel, a 16,000-square-foot health club, restaurants, entertainment areas, and a 1,200-foot public boardwalk – all in the area where Cleveland’s first neighborhood took root. Phase II, slated to break ground later next year, is to include a 200+ unit upscale riverfront residential complex and more restaurants and entertainment venues.
Developer Bert Wolstein conceived of reviving the historic area with a mix of projects that would create a vibrant and uniquely Cleveland destination. After Wolstein’s death, his wife, Iris, and son, Scott, continued working to turn vision into development through their Wolstein Group’s partnership with Fairmount Properties.
“The Wolstein family’s vision for the neighborhood is incredible,” said Adam Fishman, principal at Fairmount Properties. “It’s really the first time Cleveland has done major new riverfront development in a total mixed-use environment.”
Flats East Bank is rising on a site that once helped secure Cleveland’s place as a world-class industrial power, later became home to a thriving entertainment district, and then largely fell into disuse, with many parcels vacant or simply serving as parking lots. At that point Wolstein’s vision for revitalizing the area was born.
But right when the 23-acre site was finally assembled, the global financial crisis hit in 2008, and the project almost fell apart.
“Just as we were about to move forward, the financial world seized up, and nobody in the country could close on a large development like this,” Fishman said. “Flats East Bank was basically on life support.”
The project needed to be jumpstarted – and that’s what happened. “The financing we put together to save this project was extraordinary, closing at a time when capital markets were still very dislocated and really not functioning,” he explained. “It took 34 different sources of money and the most complicated financing structure ever executed in Northeast Ohio to do it. We had to be creative.”
Fishman said the Port has been indispensible through the entire process. “It helped us immensely with financing and was critical in getting the necessary land assembled,” he said. “The project simply would not have happened without the Port’s involvement.”
The Port issued $136.7 million in bonds for the project, nearly half the dollars needed for Phase I. “The money behind these bonds come from private investors who believed this project was a good investment,” said Brent Leslie, the Port’s chief financial officer. “The Port was glad to help move Flats East Bank forward by using its bonding power to line up this private support.”
The Port also assisted the developers’ efforts to secure additional state, federal, and local dollars for roadways, storm sewers, and bulkheads along the riverfront. “We were involved from the beginning, and played a role on multiple levels,” said Leslie, noting that next year the Port will become a neighbor to the complex when its administrative offices move to a building the agency purchased on W. 9th Street.
The developers were also creative and cutting-edge in their use of “green” designs. The project plans received LEED ND plan designation (Leadership in Energy Efficiency and Design, neighborhood development) certification from the U.S. Green Building Council. Environmentally friendly hallmarks of the project include energy-efficient lighting fixtures, recycled building materials, and a compact development on a former brownfield.
Ernst & Young, Tucker Ellis LLP, and CB Richard Ellis, are collectively bringing more than 1,800 employees to the area, while the hotel, restaurants and other venues will bring hundreds more.
When the entire project is completed, Fishman said, Cleveland will boast “a major regional development that will transform the way Northeast Ohioans and visitors experience our waterfront for generations to come. The impact should be nothing short of transformative.”