The City of Cleveland Heights
has revived a plan to build a mixed-use building at the intersection of Meadowbrook and Lee roads in the Cedar-Lee District, and this time, the shovels actually may hit dirt.
The Orlean Company, which is already an active developer in Cleveland Heights, plans to build a four-story building that will include 77 market-rate rental apartments and nearly 15,000 square feet of commercial space. Orlean is the developer of the Kenilworth Mews
and Bluestone developments
in the city.
"This is a very urban development in a vibrant commercial district," says Stuart Friedman, a consultant with Orlean. "There's a lot of heavy lifting to go, but we think it will be an enduring asset of tremendous value for Cleveland Heights."
The project at Lee and Meadowbrook has been in the works for at least 10 years. Two previous developers (The Coral Company and A.L. Neyer) had planned for-sale condos on the site, but failed to break ground due to lack of sales.
The developer hopes to tap into strong rental occupancy rates in Cleveland Heights and other urban neighborhoods. The community is ideally positioned between employment centers in Beachwood, University Circle and downtown Cleveland, yet there are very few new, market-rate apartments available.
"People want to rent," says Friedman. "There are doctors and residents who come to Cleveland and are only here for three years. They can't make a long-term commitment to owning a single-family home. We also believe we'll capture our share of empty nesters who want to downsize and stay in Cleveland Heights."
The Orlean Company likely will charge fairly aggressive rents for the apartments -- somewhere north of $1.50 per square foot, Friedman says. He believes that, given current market demand and high rental occupany rates, they'll get it.
Although financing is scarce in today's lending environment, Friedman says that rentals are easier than for-sale units and they've "already gotten some nibbles."
The City of Cleveland Heights has granted an 11-year, 80-percent tax abatement to the project, which is extremely aggressive for this densely-built inner suburb. Intense competition from other, nearby cities prompted the bold approach.
The Cleveland Heights-University Heights School Board must still approve the tax abatement, but Friedman believes that they will. Even with the abatement, the project will bring in millions of dollars in new revenue for the city and schools.
The commercial space likely will be about two-thirds traditional retail, and one-third loft office space geared towards emerging startup companies.
Friedman says that the Orlean Company intends to break ground on the $11 million project next year and have units occupied by renters by early 2014.
Source: The Orlean Company
Writer: Lee Chilcote