From Steelyard To Power Center
With Steelyard Commons, First Interstate Properties is seeking to recapture Cleveland residents’ retail dollars and keep them within the city limits.
Kevin Jeselnik

First Interstate has preserved the steel processing facilities’ old employee clock-in building, as well as an old bottle car that was used to transport steel, which will be displayed within Steelyard Commons. The building will be operated by Western Reserve Historical Society to celebrate and provide a history of Cleveland’s steelmaking industry.

A developer has to have a certain amount of passion for its projects in order to see each through to the end, but a hometown development always seems to hold a little more importance. For Cleveland-based First Interstate Properties Ltd. and its president, Mitchell Schneider, the development of Steelyard Commons is the result of notable vision and dedication.

Situated on a 125-acre parcel of land that was previously part of the area’s steelmaking process, Steelyard Commons is an expansive $120 million power center totaling more than 1 million square feet. The project is located within Cuyahoga County, with access to interstates 71, 490, 90 and 77, as well as State Road 176. While the vehicular access to the site is impressive, the greatest asset of the location is the utter lack of competing retail within the city limits. In the past 10 years, only 275,000 square feet of new national retail has come online in Cleveland (a Home Depot, an AJ Wright and a Staples store are the main completions). During that time, the retail sector has exploded in the surrounding suburban submarkets, yet developers have stayed away from the city’s core. Schneider believes there is some illuminating demographic information underscoring the area’s need for new retail, as well as its ability to sustain it.

The signage for the new Petco store at Steelyard Commons integrates steel beams that were found on the site to tie into the property’s history.

“One of the most interesting things about this shopping center came to light when we started working with Target, which focuses on the number of households within a 5-mile radius of a trade area with incomes of $50,000 or greater,” Schneider explains. “If you look at the raw number of households in that bracket, even though most consider our area an urban location, the only suburban retail hub in Northeast Ohio with a larger number of those households is Lyndhurst, at the corner of Cedar and Richmond roads.”

This is an interesting point. The market surrounding Steelyard Commons has approximately 140,000 households in that 5-mile radius, with about 43,000 households boasting incomes of more than $50,000. In the Lyndhurst submarket, there are approximately 100,000 homes, with 52,000 households having incomes of $50,000 or greater. Steelyard Commons has the potential to become a destination for a huge population of shoppers that, until now, have had to leave the city and head to the suburbs for their retail needs. For Schneider, this data illustrates the viability and demand for a suburban-style shopping center around the city’s downtown core.

The signage for the Target store, which opened in March, evokes the center’s obvious steelyard aesthetic.

“Cleveland has a deficiency of approximately 3.3 million square feet of general merchandise retailer space. I wanted to do this project to help the city recapture the impact of the expenditures of its residents,” Schneider says. While it seems that it would be an obvious location for new development, it was hard for many developers to see the forest through the trees.

It has been even harder to find a site on which a proper shopping center could be built. “To acquire this kind of location, with freeway and arterial road access that would really serve the needs of the residents and the retailers, was something that just wasn’t possible for a long time,” Schneider says.

First Interstate Properties coveted the land on which Steelyard Commons now sits for 6 years before it could complete the acquisition and kick start the development. The property was originally owned by LTV Steel, which used the site to process steel that was produced on adjacent land. Eventually, ownership changed hands to International Steel Group, which chose to operate the land for a short time before deciding if it would dispose of the site.

After all the waiting, the negotiating and construction, the first stores have opened and the response has been very positive. The Home Depot (130,000 square feet) opened its store in early February, and Target (127,280 square feet) and Famous Footwear opened their doors in March. All three stores opened with sales above projections. Some of the other tenants set to open throughout the coming months in Phase I include Best Buy, Marshalls, Staples, Payless ShoeSource, Kay Jewelers, Starbucks Coffee and Old Navy. A Wal-Mart Supercenter will open in September. Restaurants that will be a part of the center include Quiznos, Chipotle, Chick-fil-A, Steak ‘n Shake, Taco Bell and Applebee’s. Approximately 30 percent of the outlots have been filled.

The 130,000-square-foot Home Depot store was the first retailer to open for business at Steelyard Commons in early February. So far, sales have exceeded the company’s expectations.

For the second phase, Schneider is going after the higher-end power center tenant, which he hopes will be persuaded by the strong reports and high sales coming from the anchors of the first phase. The second phase can accommodate up to 250,000 square feet, and the possible tenant types are a housewares store, a national bookstore, a department store such as Kohl’s or JC Penney, and a smaller, high-end grocery store.

The design and feel of the project will tie in very closely to the site’s history as a part of the city’s steel-making industry. Various remnants and artifacts from the property’s former use have been incorporated into the design. Signage for the center is built onto the top of old watchtowers that remain on the site, and many steel beams and structural support pieces have been used as part of the fascia of the store signs along the front of the buildings. One existing building, the clock-in facility where steelworkers once punched in and out of work, has been preserved and relocated, and will be operated by the Western Reserve Historical Society as an exhibit providing information on the city’s history as a steel town. Literal pieces of history can be found throughout the project.

The brownfield site did not need an extensive amount of remediation, as it was not used to actually produce steel, but the developer spent approximately $4 million for land improvement to ready the site. “To take 125 acres of polluted industrial property with 2 million square feet of dilapidated structures, rather than taking 100 acres of pristine green space outside of the city, was something that was very appealing to the company,” Schneider says. “It removed a part of the development process that is sometimes the least desirable, when you take over a beautiful environment and develop it for commercial use. The city of Cleveland really deserves to have a modern, suburban-style retail center serving its residents.”


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