CLEVELAND, Ohio -- Property owners and advocates have been saying it for years: Downtown Cleveland can create successful pockets - the Flats, the Warehouse District, East Fourth Street - but we can't seem to link those lively patches into a cohesive center city stretching from the Inner Belt to the lake.
A report set for release today argues that connections, ranging from pop-up shops to bike lanes and pedestrian bridges, will be critical to maintaining downtown's momentum during the next five to seven years. And, the report's authors say, national trends and Cleveland's recent downtown residential growth put nonprofits, the city and business leaders in a prime position to tackle street-level projects that will beget more private investment.
That's the crux of "Step Up Downtown," a strategic plan that stems from six months of interviews, community meetings, surveys and analysis. The Downtown Cleveland Alliance, which represents property owners, hired a set of consultants to study urban trends, dig into local demographics and present recommendations for extending the recent run of growth.
"Cleveland does a really good job of going after projects and also going after district planning," said Brad Segal of Progressive Urban Management Associates, a Colorado consulting firm that looked at market trends and real estate opportunities for the alliance. "What has been missing is a sort of comprehensive, holistic look at downtown that knits these things together."
Northeast Ohio's economic health is inextricably tied to the rise and fall of downtown, Segal argues. As cities compete to attract a limited pool of young, skilled workers, they're touting busy central business districts as sweeteners. Those amenities reach beyond office space, hotels and apartments, to safe sidewalks, inviting parks and clear pathways for people on foot or on bicycles.
Since 2000, downtown Cleveland has more than doubled its residential population, to upward of 12,000 people. Developers are filling obsolete office buildings with apartments, bringing new life to empty structures and starting to drive down high office-market vacancy rates. Retail is still a tough sell, but Heinen's Fine Foods expects to open a grocery store on Euclid Avenue next year. Other retailers, such as drug stores and service businesses, might follow.
New investments, including a bevy of hotels, helped the city emerge this week as the frontrunner to host the 2016 Republican National Convention. There's potential. Enthusiasm. And skepticism, as people brace for the next setback.
"We have this dynamic in downtown where, when there's something new, immediately people are worried that it's going to undermine something that we already have," said Terry Schwarz of Kent State University's Cleveland Urban Design Collaborative, another contributor to the new downtown plan.
"What good connections do is they make new investments not only good in their own right, but they also enhance what's already here," she said. "As the Flats spring back to life, that doesn't have to mean the demise of the Warehouse District."
Consultants think big and small
The alliance, the Kent State group and Segal's firm identified 18 opportunities for better connections downtown. Some of them play off larger investments, such as the planned $30 million makeover of Public Square or the emergence of the Campus District neighborhood around Cleveland State University. Others are more modest projects, including bike lanes on Huron Road and better lights near bus stops and along pedestrian paths.
The highlights include:
Constructing a pedestrian bridge from the downtown Malls - the green space in the heart of the city - to North Coast Harbor and attractions including the Rock and Roll Hall of Fame and Museum and the Great Lakes Science Center. The city, Cuyahoga County and the state have collectively allocated $25 million toward public-space projects, including the bridge. Other financing efforts and private fundraising are under way.
Pushing for public access to the Cuyahoga River behind Tower City Center when casino developer Rock Ohio Caesars moves forward on the second phase of its gaming project.
Adding bike lanes and creating better environments for pedestrians along several downtown streets, including East Sixth, East Ninth and areas north of Cleveland State.
Finding a way to allow bicyclists and pedestrians to traverse the old streetcar level of the Detroit-Superior (Veterans Memorial) Bridge between downtown Cleveland and the Ohio City neighborhood.
"Some of them are really inexpensive, low-hanging fruit," Segal said of the recommendations. "When you get into the connections, you're anywhere from probably six digits to eight digits on each. ... If we were going to implement everything in that plan, it would probably cost tens of millions of dollars."
But, he added, "we're not suggesting we implement everything" - at least, not right away. Instead, the plan sorts potential investments by feasibility and timing. And it assigns a team to every task, pulling from the lineup of nonprofit groups, governments, institutions and private partners already working downtown.
The consultants also laid out broader challenges, such as filling vacant retail spaces and expanding school options for downtown residents with children.
On a list of economic priorities, they mentioned the need to provide housing that downtown workers and middle-income households can afford; recruit more casual, quick restaurants; and fill empty retail spaces with businesses, such as pet stores, that cater to nearby residents. Another list, focused on improving the downtown experience, touched on everything from scattering fitness stations across public spaces to adding bathrooms and water fountains across downtown.
"What keeps it from being just a plan on a shelf is a commitment from [the alliance] and its partners to execute," Schwarz said. "And a pretty detailed framework."
The 110-page report charts a potential course for the nonprofit alliance, which draws roughly 60 percent of its funding from special assessments levied on downtown property owners.
The alliance's current agreement with property owners ends in late 2015, and the nonprofit's leaders will start making their case for renewal later this year. So far, those assessments have helped pay for cleaning and safety crews to patrol city streets and business-development programs designed to land and keep office tenants and other companies.
Now, it appears, missing links could be a big part of the alliance's next pitch.
"One of the things that 'Step Up Downtown' does is it makes the connection between things like walkability and bicycle-friendliness and real estate development," said Michael Deemer, the alliance's vice president of business development. "In today's world, with Millennials and empty nesters so strongly gravitating toward mixed-use and walkable environments, creating an environment that is walkable and friendly and feels connected to things is important from a development perspective."
Apartment outlook stays strong
Across the country, cities are seeing residential growth thanks to young renters and aging Baby Boomers without children at home. Based on national trends and local developments, Segal looked at areas where downtown is likely to grow - and falter - during the next few years.
Apartments: Residential demand will stay strong. The recent wave of building conversions doesn't seem to be putting much of a dent in renters' appetites, since downtown apartment occupancy has been hovering around 95 percent for nearly three years. Most of those conversions have involved historic buildings, which can qualify for federal and state preservation tax credits.
Based on the remaining pool of tax-credit-eligible buildings and the recent pace of apartment projects, Segal and the alliance predict that downtown Cleveland could add 2,000 to 2,500 apartments during the next few years.
That shakes out to 3,000 to 3,750 residents, putting the downtown population somewhere in the 15,000 range. And that potential growth doesn't include new construction, which is stirring on the edges of downtown and is planned for a site north of FirstEnergy Stadium.
"I think it affirmed some of the things that we've been seeing in the market," Joe Marinucci, the alliance's chief executive officer, said of the market research. "We were probably pleasantly surprised by that conversion number."
Offices: As older, less desirable office buildings become dwellings, the city's soft office market will get a boost. So far, most of the residential makeovers have eliminated empty buildings, which don't necessarily factor into market statistics. But developers are looking more closely at half-full buildings, such as the recently converted Hanna Building Annex and the Standard Building, which just changed hands. Forced to move, office tenants are soaking up empty space in other parts of downtown, helping to cut the overall vacancy rate.
The Newmark Grubb Knight Frank real estate brokerage in Cleveland estimates that apartment conversions have reduced downtown's supply of lower-rent office space - Class B and C buildings - by 15.2 percent during the past few years. Rents are inching up at the remaining office buildings, with the cheapest properties seeing the biggest boost.
Overall office vacancies remain high, at anywhere from 17.6 percent to 23 percent, depending on which brokerage you ask. But the success of the Ernst & Young Tower at the Flats East Bank project - downtown's first private high-rise since the early 1990s - demonstrates that tenants want new space and are willing to pay for it. Segal predicted that downtown Cleveland could see additional office construction, though it will be limited and, like the Flats, could require hefty public subsidies.
Shops and restaurants: Retail vacancies probably won't change much during the next few years. The alliance's new plan emphasizes the need to fill empty storefronts along major streets, including Euclid Avenue. Segal wouldn't rule out the possibility of attracting a discount retailer, now that giants including Target and Walmart are experimenting with smaller stores designed for cities. But he expects most new retailers to be small, and focused on residents.
"People have to realign their expectations," Segal said. 'You're not going to have Nordstrom. You're not going to have the big, high-end department stores in a downtown setting almost anywhere.
"Basically, what we've said is to be selective," he added. "We can't expect in a downtown the size of Cleveland that you're going to have miles and miles of retail."