Cleveland’s downtown is anything but quiet today.
A Horseshoe Casino opened in downtown last year. The first new office tower in Cleveland in 20 years, the 23-story Ernst & Young building will open for business next year. The Cleveland Medical Mart — now called the Global Center for Health Innovation — and Convention Center will open this summer, slightly ahead of schedule.
Then there’s the Flats East Bank project, a $500 million development located at an idea location, where the Cuyahoga River meets Lake Erie. This development is scheduled to open this spring.
Joe Martanovic, head of the industrial brokerage group at Cleveland’s Ostendorf-Morris, sums it up well:
“There is a great buzz around Cleveland on a lot of fronts,” Martanovic said. “And the activity taking place downtown has certainly generated a lot of excitement. We are seeing people moving back into downtown.”
A reverse migration
Think of it as a reverse migration. For years, Cleveland residents moved away from the city’s downtown.
“Many people in my generation grew up in the inner city of Cleveland,” Martanovic said. “We disdained it. We wanted to move to the suburbs. Now we are seeing an exodus back to the inner city. It is now exciting there. It’s a hip place to be. I have young kids and they love to come to downtown Cleveland to be entertained. They talk about moving there. It’s a big change, a change for the better.”
KC Petraitis, a research analyst and licensed salesman at Ostendorf-Morris, understands this. He’s a member of the Downtown Cleveland Alliance, a not-for-profit organization devoted to bringing new life into downtown Cleveland.
Petraitis, like his co-worker, is thrilled with the pace of downtown growth.
He points to the new convention center and Global Center for Health Innovation. That facility, though it hasn’t officially opened, is already booked for about 50 conventions and conferences. And this has spurred additional downtown development, most notably new hotels locating in the area.
“People are coming to the city for tourism or for the convention center or casino,” Petraitis said. “Because of this, there has been a tremendous amount of investment in the area.”
The numbers are impressive. Petraitis said that downtown Cleveland should see about 1,000 new hotel rooms by 2014. At the same time, it’s estimated that 1,100 new multi-family residential units will open in downtown Cleveland by 2015.
Why the activity? Martanovic cites Cleveland’s surprisingly active cultural scene, its professional sports teams, its museums and its reputation as a center for medicine and medical research.
“This town, when it was the fifth- or sixth-largest city in the United States was a steel and auto town,” he said. “We still have that. But Cleveland is also a mecca for the healthcare and medical business. That’s why we built the Medical Mart. There has been a confluence of different things that is causing the downtown to boom.”
Downtown Cleveland, though, still faces challenges. The office vacancy rate is too high, though much of the vacant space is old Class-C space that will eventually be converted to apartments.
One building that isn’t being counted in the office-vacancy statistics is the old Ameritrust complex, a long-vacant site at East Ninth Street and Euclid Avenue. Geis Cos. will undertake a $200 million redevelopment of this former office property into a mixed-use development featuring a high-end hotel, residential and first-floor retail.
“It is super exciting to see this come online,” Petraitis said. “That is a main gateway in downtown. It’s long been vacant. This project should drive a lot of investment in that area of downtown.”
Petraitis is excited, too, about the Flats East Bank project, one that has been a long time in the making. This project, like many others across the Midwest, was sidelined during the country’s financial crisis.
But now it’s back. It will bring Class-A office space, hotels and residential to an important slice of downtown along the Cuyahoga River. The first phase of the project is scheduled to come online this year.
All of the new projects are working together to fuel downtown Cleveland’s resurgence.
“It has been a progressive, steady growth. Nothing happens overnight in any municipality,” Martanovic said. “One project adds to another project. During the last 10 years or so, people under 35 have wanted to move downtown.”
