Feature Article, December 2004
Plan Of Steel
First Interstate Properties and Goodman Real Estate Services Group plan to turn an old steel mill into a 1 million-square-foot retail destination, Cleveland’s Steelyard Commons.
Katie Foxworth
In the old days, when it came to finding a great place to shop, most Clevelanders were left with little choice but to “take it outside.” In fact, in 2000, Cleveland residents spent approximately $1.3 billion on retail purchases outside the municipal boundaries of the city of Cleveland, according to a study from Iowa-based Oster Research Group. And, in the last decade, only 250,000 square feet of open-air modern shopping center space has come online inside the city limits. Perhaps even more telling, only two major national retailers — The Home Depot and Staples — have opened stores in the city of Cleveland within the last 10 years.
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This site plan for Cleveland’s Steelyard Commons illustrates the site’s easy access to several interstates.
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Bringing retailers, residents and ultimately shopping dollars back to the city of Cleveland tops the priority list for city planners and developers. One means to that end will take place in the form of Cleveland’s Steelyard Commons, a 1 million-square-foot regional power center development proposed by First Interstate Properties and Goodman Real Estate Services Group — the same development and leasing team that brought Legacy Village to Cleveland. Currently, First Interstate has a 3.5 million-square-foot portfolio of developed properties, while Goodman leases approximately 8 million square feet of existing and proposed shopping centers on a third-party leasing basis. The two firms have worked together for 11 years. Their latest project has been 6 years in the making.
A redevelopment of the old LTV Steel site, Cleveland’s Steelyard Commons is located on 127 acres in the heart of the Cleveland trade area, in a market completely void of major retailers. The location itself, which is near downtown, is choice for any developer — and the fact that Cleveland has been so hungry for great retail for so long makes the locale that much sweeter. Sensing the site’s enormous potential, Goodman pursued the acquisition of the property for 6 years on behalf of First Interstate. Finally, the property became available after the steel operation decided to downsize.
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Cleveland’s Steelyard Commons will be located on 127 acres in the heart of the Cleveland trade area.
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“This site has immediate freeway access to every major interstate serving Northeast Ohio,” says Mitchell C. Schneider, president of Beachwood, Ohio-based First Interstate Properties, Ltd., which is developing the project. “Within a 5-mile direction east and west, and 2 and a half miles north and south of the site, there are 22 freeway interchanges that provide direct access to the site. There are 300,000 people who can get to this property within a 10-minute drive time.”
First Interstate hopes to create a truly regional shopping destination that not only serves Cleveland residents, but also the outer boroughs of Brooklyn and Newburgh Heights.
“Cleveland is a woefully underserved trade area in terms of modern retail,” Schneider says.
Yet the demographics are there. On Interstate 71 alone, more than 100,000 cars pass the site daily. Thirty percent of the more than 300,000 people in the immediate trade area have an average household income in excess of $50,000. The entire region known as Northeast Ohio has 4 million people. And except for The Home Depot and Staples, no major retailer has a single store in the city of Cleveland. Yet the city of Cleveland has highest number of single-family housing starts in the county. Where will all these new residents shop? Right here in the city, if First Interstate and Goodman Group have their way. Their goal is to achieve a suburban-style retail experience in an urban environment, taking advantage of the burgeoning residential population as well as a daytime office population of 360,000 employees within 5 miles of the site.
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Cleveland’s Steelyard Commons is a redevelopment of the historic LTV Steel site.
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“Having 360,000 employees within a 5-mile radius is not something you’ll see, I’ll guess 99 percent of the time, at shopping centers. It’s just an incredible statistic,” says Randall J. Goodman, principal of Lyndhurst, Ohio-based Goodman Real Estate Services Group, LLC, which is leasing the property. “Not only do we have the densely populated area that retailers are not serving right now, we have a site that has all of the access points in place in the middle of a huge residential and daytime employment population.”
“This is a classic situation of finding a large, developable parcel for retail purposes that fills a tremendous void in the marketplace,” Schneider adds. “Virtually any national retailer doing business in Northeast Ohio can add a store in the city of Cleveland to their program without impacting other stores’ sales, and they can tap into a market that has 300,000 people.”
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The immediate trade area of Cleveland’s Steelyard Commons. (Map courtesy of SITES USA, Inc.)
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As for tenant mix, Schneider says he and Goodman are talking to a discount department store, a home improvement store, an electronics store that would be new to the market, a sporting goods store, apparel users, pet supplies, office supplies and crafts. Goodman says they also plan to build pad sites for four or five sit-down restaurants, approximately four fast-food restaurants and a couple of banks and other service uses. Ultimately, Goodman hopes to bring in a bookstore and supermarket as well. Schneider predicts that many of the retailers who locate at Cleveland’s Steelyard Commons will have their best volume location in the region, given the density of population and the lack of competitive retail serving the trade area.
“I think every retailer’s success is made up of incremental sales in a market where they currently operate without canceling out other stores,” Schneider says. “Randy and I have really made a niche of trying to pursue that need on the part of retailers.”
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The project design will incorporate the original 120-foot-high watch towers, as well as some of the original steel and metalwork on some of the buildings.
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Cleveland’s Steelyard Commons is being designed in-house by First Interstate’s Kevin Zak, development manager and director of design, who formerly headed the design group at Dorsky Hodgson + Partners in Cleveland. First Interstate has also been working with Dorsky Hodgson and the city of Cleveland’s planning commission to create an architectural theme.
“Essentially what we’re trying to do is place modern retail in an integrated architectural theme but in a very industrial environment,” Schneider says. “The steel mill is still operating on the property adjacent to where we will build the Steelyard Commons. So we took a [photographic] record of all the buildings that were on this site and now we’re coming up with architecture that evokes the industrial/urban environment and yet allows for modern national retailers to have a sense of identity.”
Also inherent to the architecture will be steel from the steel mill, as well as conversion of the 120-foot watch towers into signage. Schneider says they will also use exterior metal components from the old buildings on the façades of some of the new buildings. The overall architectural theme will be enhanced by landscaping and attention to pedestrian orientation. Yet Schneider is quick to point out that this is not a lifestyle center. “It’s a well done power center,” he says.
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Mitchell C. Schneider |
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Randall J. Goodman |
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The $90 million project is scheduled to open in fall 2006. “The city has just been thrilled with this concept,” Schneider says. “Early on, the mayor wanted to be clear that we weren’t looking for a tax abatement. And we’re not getting a tax abatement. So it’s a real boon to the city of Cleveland economically. In addition, it’s filling such a void in the life of the residents of the city of Cleveland. There’s been a real effort in Cleveland to bring in new residents and to enhance the quality of life for existing residents so that they have all the modern conveniences, goods and services that people can get out in the suburbs. As we mentioned, there is not a modern, large power center that exists today within the municipal boundaries of the city of Cleveland.”
With Cleveland’s Steelyard Commons on the way, that will soon change.
©2004 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.
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