Monthly Archives: April 2014

Wimp with tremendous socks talks development

On April 1st, 2014, I had the opportunity to speak on a panel discussion talking about development in downtown Cleveland.  The panel discussion was put together, largely, by the group that is for the sin tax, though the Next Generation Council played a big part in trying to frame the discussion as a place for young professionals to engage with the topic and issues at hand. I was honored to be asked to help add some development context based on my experiences and perhaps a layer of what the young professional community can be doing to participate in the discussion and make a difference moving forward on these topics/issues. (admittedly, I was a late addition to the panel)

I am going to try and represent what I remember talking about last night as accurately as possible, though if you were there, and you heard me say something different, please make a comment here so I can correct it.

At the beginning of the discussion, I took a few minutes to talk about the broader use of public financing on projects to try and connect people with a larger understanding of how public money can be used to help leverage private dollars. It was important for me to highlight examples of when I thought it worked really well so that people can decide for themselves when it might not be working so well.   I was fairly careful (I hope) to not portray myself as an expert in public finance, but someone with a few experiences over the past couple years that might be relevant. For example, my experience working not only the design side of things for the Flats East Bank, but also helping put together many of the finance/marketing documents that were being used to try and attract investors and tenants to the project. The amount of public financing support on that project was incredible, and part of the reason the project moved forward in one of the most difficult development environments in decades. The public investment in roadways, infrastructure, public amenities and portions of a parking garage, which all in all was well over $100 million dollars, was a necessarily public investment that helped complete the financing package that otherwise may not have been possible. I personally believe that investment is going to pay enormous dividends as it relates to not only further development in the Flats, but also in the Warehouse District and (finally) on the Lakefront. These districts are all related and connected.  It is going to help create a predictable investment environment where other developers are going to feel more comfortable investing in Cleveland because they’ve seen successful projects completed. What I like about this development model, is the opportunity to leverage public money to allow private investment to have a much larger impact. In cities like Cleveland, public/private partnerships is probably one of the best ways (many argue the only) to do most of these types of developments. The finances don’t work any other way for a variety of reasons…some of which I understand…some of which I don’t. I probably spoke too much at the beginning about this, but I get excited when I talk about the Flats because it was such a large part of my life for so long and a big part of the reason I initially stayed here in Cleveland. I have worked on a number of projects, in and outside of Cleveland, that have very similar development financing stories.

Later in the discussion, I touched on my thoughts about the Euclid Corridor project as another example of a public investment done right. At first, I honestly hated the idea of the Euclid Corridor. Were we really going to demonstrate as a city how INNOVATIVE we were by building…..a bus lane? It just didn’t sound progressive enough and I thought that the 200+ million dollars was too much to spend for such an uninspiring transportation option. Looking back on that opinion, it is pretty clear I could not have been more wrong. No single public investment here in Cleveland has yielded (in my opinion) as many significant benefits as the Euclid Corridor. While still relatively young, the corridor has leveraged hundreds of millions of dollars in investment, even if you DON’T count the investments made on at the Cleveland Clinic and University Hospitals (mostly because one could argue that they would happen regardless). Look at what we’re seeing at Uptown, MOCA, almost ALL of midtown, some of CSU’s new residential neighborhood and some of the amazing re-investment downtown is seeing in buildings all up and down the corridor in and around the central business district. If you want to read more about exactly which projects are going on, take a look at this map: http://media.cleveland.com/business_impact/other/CLEVE-2011-DEVELOPMENT-MAP.PDF

Then came my apparently memorable line about my potentially foggy memory of my wife calling me a wimp (I spoke to her about this later that night, and she can’t remember saying it…so it actually may have been someone else:). It came when the discussion turned to the Opportunity Corridor. After a few comments from my fellow panelists about what they believed was the potential for the corridor, I found myself a bit frustrated with the conversation. Not because I didn’t want to get into whether or not the Opportunity Corridor was a good idea, but because I feel like we are doing with the opportunity corridor what we did with the casino skywalk. As a community, we take these opposition stances on things at a point in the process where we have very little chance of affecting the result, and then we get nothing. I personally believe that if we aren’t involved early enough, and aren’t likely to see a change based on our passion for a different solution, we need to re-think our opposition strategy to one of negotiation and common ground. This isn’t a completely thought out idea or fine tuned strategy I have, just something I’ve been thinking about recently. It might actually be a little too “wimpy”, because sometimes you do have to take the opposition stance to try and really change something….I can’t say I’ve come to a conclusion on my thoughts on this quite yet…but certainly something I’m thinking about. I just want to see the community start getting things for the investments/concessions it makes or is forced to make.  Apparently none of my above comments were as memorable as my socks…which was another quote in Scene today. Which I honestly didn’t mind, I think he was complimenting me, I just wish he had also dived a bit deeper into the content in addition to the remarks that were made.

Anyways…

Then a question came about why we have such a difficult time developing amazing public spaces. I’m not sure I had a completely comprehensive answer to the question, but there are a couple thoughts I did try to articulate. First, until relatively recently (maybe the last 5 years or so), there really wasn’t much data around that  numerically linked investment in public space to increased surrounding property values. Armed with that data, we are now able to make a much more credible pitch to developers to share ownership (and the expense) of our public spaces. Secondly, we have largely neglected the spaces between our major investments for some time. We put “fences” around investment areas and have never really found a good mechanism for defining the public space between. Recently, this has started to change. The spaces between have become the focus of the conversation, which is going to have a huge impact on the corridors that link our investments.  I personally also believe we don’t aim high enough with our expectations of public space. For example with the pedestrian bridge to the lakefront, we have aimed so low with the design of that structure because of cost constraints, it makes me question whether we should even bother with the investment. Might we get more out of an investment taking West 3rd and East 9th and making them truly remarkable corridors that link to the lakefront than building an uninspired concrete gerbil tube? Check out the results from the 2009 Cleveland Design Competition for plenty of examples of what it means to aim a bit higher (granted, those were in the context of building a new high speed rail transit hub and gateway to the City of Cleveland….but still). http://clevelandcompetition.com/past-competitions/2009-lakefront-station/

(In full disclosure, if you didn’t already know, I co-found the Cleveland Design Competition…Bradley Fink and I have been working with an amazing group of advisors…Steve Rugare, Terry Schwarz, Dan Mansoor and many others…over the years to pull that off in a 100% volunteer capacity)

Considering the funding sources for the pedestrian bridge are just now being solidified, this is one thing I suggested young professionals could get involved in advocating for a better solution that provides more than just a mediocre link to the lakefront. Do we really want the terminus of the incredibly ambitious Group Plan to be uninspired? Don’t we deserve better?

Which brings us to the issue of the sin tax, which I actually don’t think I mentioned once during the debate…mostly because I wasn’t really there to talk about it.  As you can probably tell from my comments above, I am an advocate of public/private partnerships where appropriate public investment yields substantial private returns. I don’t think we would be where we are today as a city if it weren’t for those partnership projects. For example, if you look at Gateway, I can’t imagine anyone would argue that the neighborhood hasn’t been significantly more stable since the development of the arena/ballpark (if you would argue that, please let me know, I’d love to grab coffee and chat about this further). At a development level, stadiums that have been well integrated into downtown neighborhoods DO help to stabilize the restaurant, hospitality and oftentimes surrounding residential environment. It’s probably worth at least noting, at a development level, the Brown’s stadium is a completely different animal because of the lack of integration into downtown…this may change with the development of the new Lakefront neighborhood….so hopefully that development will yield a relationship with the stadium that allows the stadium to have a similar stabilizing impact on the  development.  The real discussion gets a little more heated when people ask is the sin tax really the best way keep these public facilities competitive per our lease obligations. Personally, I can’t say I know a ton about the various options that could be developed.  I have a few friends whom I REALLY respect that truly believe between now and August 2015, a new way of financing our facility obligations can be developed. They may be right. There was one idea in particular referenced to me  about taxing new ad revenue that I thought was interesting. My concern, and what I struggle with, is that right now we are FINALLY see incredibly positive steps…and not just small ones.  The momentum Cleveland is making right now is truly remarkable. We have an environment downtown right now that developers and investors understand. Things are predictable enough that people are investing in new developments (like the Flats, The 9, the Lakefront, etc..) and countless renovation projects that have gotten far less press, but are just as important.  So while I don’t think we have a particularly great model for funding stadium facilities, I think we have a method for funding them that is predictable; which sounds fairly uninspiring, but if it keeps private investors, developers and building owners interested in continuing to transform downtown, it seems worth the investment. The only thing I can say at this point (because I am still personally a bit conflicted on this issue) is that I will be listening to every single interview and reading every single article I can about this issue between now and May so that when the time to vote comes, I can confidently say I am going to cast an informed vote for what I believe in. I hope everyone does the same.

If anyone is interested in chatting more about this, I am always up for grabbing coffee to chat!:)

Best,
Mike Christoff