pd article jarboe 11.15.10

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Lisa DeJong, The PD

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The Penton Media Building, right, is reflected in the side of thebuilding at 45 Erieview on the left. The Erieview building, at EastNinth Street and La keside Avenue , is only 64 percent occupied.It is one of se veral office buildings hit with high vacancy in anarea that some downtown advocates a re trying to redefine a sthe NineTwelve District.

Downtown advocates aim to rebrand, remake Cleveland's financial

district

Published: Sunday, November 14, 2010, 11:00 AM Updated: Sunday, November 14, 2010, 11:57 AM

Michelle Jarboe, The Plain Dealer

CLEVELAND, Ohio -- While developers plot a

casino on Public Square, patrons fill

restaurants on East Fourth Street and club-

goers flood the Warehouse District,

Cleveland's one-time financial district sitsquiet.

Office towers around East Ninth Street that

once teemed with bankers and lawyers are

plagued with high vacancy rates and the

impending loss of major tenants.

Now, a group of downtown advocates is

trying to remake the area with hopes that a

clear plan, better parks, revived reta il and

access to cheaper parking will attract new

businesses and position the district for

redevelopment as the economy improves.

Proponents, who are calling the area the "NineTwelve District," see distress around East Ninth as a rare

chance to transform the central business district. Driven by a 16-member committee representing the city of

Cleveland, the design community, real estate companies and business groups, the NineTwelve effort ismining for opportunities in the rocky landscape along East Ninth and East 12th streets, from Euclid Avenue

to Lake Erie.

Out of 7.4 million square feet of office space in the district, 2 million square feet is empty -- the equivalent o

more than three-and-a-half 52-storied Terminal Towers.

With a handful of large tenants set to move, 800,000 additional square feet could open up by 2013,

bringing vacancy to roughly five Terminal Towers worth of space.

11/15/2010 Downtown advocates aim to rebrand, r…

blog.cleveland.com/…/print.html?entry… 1



Lisa DeJong, The PD

A vacant building at 1015 Euclid Ave. is p art of the JohnHartness Brown Building complex , a stretch of dilapidatedhistoric properties on the north side o f Euclid Avenue. ACleveland Heights inves tor purchased the buildings in 2006 withplans for a redevelopment project that never materialized.

early participant in NineTwelve. "There are a

lot of negative examples of cities that have

lost their downtown core, and it's hurt the

whole region. Obviously, Detroit's one.

When the downtown core revitalizes, it

helps everyone else."

The committee focused on both sides of

Ninth Street and the west side of 12th, from

Euclid Avenue to Willard Park. Notably, the

district omits the south side of Euclid and the

Ameritrust Tower, which would make the

collective vacancy even more daunting.

The East Ohio Building, at 1717 E. Ninth St., is empty. The KeyBank Center, at 800 Superior Ave., could be

largely vacant by 2012. KeyBank and law firm Calfee, Halter & Grisw old are moving out. Early this year,

the property's owner handed off the keys to its lender.

Huntington is scheduled to move in late 2011. Ernst & Young and Tucker Ellis are waiting for the de layed

Flats East Bank project, whose developers still hope to close on their financing this year. Eaton plans to

leave Superior Avenue in late 2012.

Despite the departures, some property owners are committing to the district. PNC has filled space in its

downtown tower by shifting jobs from other properties. And Optima Ventures, a deep-pocketed investor,

has purchased three properties on East Ninth: One Cleveland Center, the Huntington Building and thePenton Media Building.

Flanked by Playhouse Square and development spilling eastward from East Fourth, the district is

surrounded by activity. East Ninth remains a major artery, with the Rock and Roll Hall of Fame and Museum

to the north and access to Interstates 90 and 77 to the south. And some of the troubled buildings would

qualify for tax credits related to historic preservation and investment in low-income areas, making them

potential targets for redevelopment.

"In most real estate, you hear 'Location, location, location,'" said Kevin Piunno, U.S. leasing director forOptima. "We've got the location. Now it's a matter of reinventing it a little bit, polishing it up and marketing

it."

Promotions, parks, people and public transit

This year, advertising and public-relations firm Liggett Stashower came up with the NineTwelve District

brand, meant to represent a mixed-use neighborhood rather than a corporate center. This re-branding is





Liggett

Stashower

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A logo developed tobrand the NineTwelveDistrict in downtownCleveland.

the first of several goals that the Downtown Cleveland Alliance and its partners hope to meet quickly.

Other tasks center on reviving the streets, to bring people back and make potential tenants take a second

look.

The NineTwelve committee has identified 13 small parks, plazas and public spaces in the district and is

talking to ParkWorks and Cleveland Public Art, two non-profit organizations, about ways to make those

areas more attractive. The city of Cleveland already is spending more than $1 million for renovations of Per

Park, at Chester Avenue and East 12th, where two men were shot last year.

Several city programs, including assistance for storefront renovations, could hel

revive small businesses in the district -- and on the streets. Cleveland launched

a food cart program last year, and the city's first food truck has developed a cul

following. Joe Marinucci, chief executive officer of the Downtown Cleveland

Alliance, envisions a handful of food trucks or carts roaming on Ninth Street,

luring workers out of office buildings and attracting lunchtime traffic from other

parts of the city.

But the most important groundwork, at least according to property owners, is

making parking cheaper and more convenient. Downtown buildings, where

tenants typically pay an additional $2 to $4 per square foot for employee

parking, can be a hard sell for companies considering a move from the suburbs. And some of the most-

troubled buildings in the NineTwelve District are the ones with limited access to parking.

Public transportation might be a solution. The NineTwelve committee wants better marketing of the Greater

Cleveland Regional Transit Authority's Commuter Advantage program, a partnership with companies that

lets employees buy monthly passes using pre-tax dollars. Roughly 500 employers and 11,000 employees

currently participate.

And NineTwelve proponents are talking to RTA General Manager Joe Calabrese about launching a free

trolley to provide an efficient connection between offices on East Ninth and cheaper parking, including an

underused municipal lot near the lakefront and garages near Quicken Loans Arena. RTA already runs two

free downtown trolley routes, which serve nearly 5,000 passengers da ily during the week.

Operating an East Ninth trolley route could cost as much as $518,000 a year and would require financial

support, at least in part, from the private sector, Calabrese said.

"We'd love for it to work," he said. "We'd love to do it, but we'd need to find the money."

A shrinking city, a smaller office market





A group of NineTwelve committee members is studying the costs of the plan and considering potential

funding sources. The first priorities are paying for park improvements, food carts and the expanded trolley

system. But the group also will examine private and public ways to assist with improvements to viable office

buildings and transformation of obsolete ones.

"We're working with a variety of brokers on the different buildings and getting a better idea of what the

highest and best use is for any of these properties," said Tracey Nichols, the city's economic development

director. "We're trying to market the properties and work with developers to see what we can make

happen here."

Some buildings could be split into a mix of uses. Others, with smaller floors, might be attractive candidates

for apartment developers. Such conversions would bring down the supply of available office space to better

meet reduced demand. And with less vacancy downtown, landlords might be in a better position to fill the

remaining offices.

Members of the NineTwelve committee said they are focused on making the area more attractive to growing

companies, particularly those w ith young workers who want to be in an urban environment.

But they point to other parts of the city, including East Fourth and the Warehouse District, to show that

Cleveland does not have to be bound to its past. Dingy storefronts can become acclaimed restaurants. Old

warehouses can become apartments. And a former financial district can continue to be a place for work --

but can become one where people also live, dine, visit and linger.

"I happen to feel, and I know others on this committee feel very strongly, that change is good," said Paul

Westlake, of Westlake Reed Leskosky. "Change often in Cleveland is a symbol of poor hea lth. But I thinkyou have to remember the words of Harry Truman, who said a pessimist is a person who sees an

opportunity as a problem, and an optimist is a person who sees a problem as an opportunity."



pd article jarboe 11.15.10

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