RMS Investment Corp., the developer that controls much of the district, has fine-tuned its plans for the inner-ring suburb's new downtown.
SHAKER HEIGHTS, Ohio - Detroit-based watchmaker Shinola has signed a deal for its first Ohio store, which will anchor a food hall at the heart of the Van Aken District project in Shaker Heights.
RMS Investment Corp., the developer that controls much of the district, has fine-tuned its plans for the inner-ring suburb's new downtown. Updated site layouts for the $90 million first phase of the project show a 20,000-square-foot food hall populated by small retailers and food stands.
Shinola and two undisclosed restaurants will flank eight to 15 stalls leased to businesses including Rising Star Coffee and Luna bakery, two local retailers that are expanding. RMS isn't ready to announce other food hall tenants for the project, set to replace the tired Van Aken Center retail strip west of Warrensville Center Road.
The food hall will function as the social centerpiece of a project set to house 100,000-plus square feet of retail, 60,000 square feet of offices, 102 apartments, structured parking and park space in its first phase. The broader 11-acre district includes a revamp of the Shaker Plaza shopping center to the west, redevelopment of the city-owned Qua Buick site to the east and a handful of properties earmarked for future retail, residential and office projects.
An updated site plan shows the vision for the Van Aken District, an 11-acre area being repositioned as a new downtown for Shaker Heights. RMS President Luke Palmisano said Mitchell's Ice Cream has committed to opening a freestanding shop in the district. Many existing Van Aken Center tenants, including Pearl of the Orient and D.O. Summers dry cleaners, have agreed to move to Shaker Plaza, which RMS is renovating after gaining control of the property through a lease-purchase deal. And the Fresh Market grocery store, the largest tenant at Van Aken Center, has agreed to stay in the neighborhood.
Palmisano wouldn't discuss the Fresh Market deal, and a representative for the grocer declined to comment. But site plans indicate that the Fresh Market will move to a new, freestanding building on the old Qua Buick site. The existing grocery store, the newest portion of the 1950s Van Aken Center plaza, will become the food hall - a nod to a budding development trend that attempts to replace the passe food court with an eclectic indoor mix of artisans and eateries.
"It needs to be authentic and connected to the community," Palmisano said of the food hall. "And we're not targeting the national-type tenants that are going to make this feel like a Disneyland project."
That building, and the urban-style vision for a suburban setting, appealed to Shinola, which has only 10 stores globally. The company, launched in 2011, makes watches, leather goods, bicycles, journals and pet accessories. Its home offices and manufacturing operations are in Detroit, though the brand's parent actually is a Dallas-based private investment group called Bedrock Manufacturing Co.
Heath Carr, Bedrock's chief operating officer, said the company hopes to open three to four additional stores this year and expand at a rate of six to 10 openings annually. Shinola looks for interesting real estate, population density, traffic to its online store and local sales through other retailers, such as department stores, when choosing new locations.
"For us, it was really the development," Carr said of the Van Aken District. "What the developer's creating there in Shaker Heights was really interesting. ... It's a place where people can spend a couple hours. You can eat. You can shop. There's entertainment, and it's all about walking around and enjoying that. You can ride bikes there on the weekend. That's what drew us there - maybe not what it is today, but the vision of the developer seems very exciting."
The first phase of the Van Aken District is set to open in fall 2017. RMS plans to tear down most of Van Aken Center in the spring, after completing renovations at Shaker Plaza and shifting tenants across the street.
Demolition could begin as soon as next week on the Qua Buick site, just north of a once-snarled meeting of streets scheduled to reopen as a streamlined, four-way intersection before the end of the year. The city bought the 2.4-acre dealership property in late 2013 and is tapping Cuyahoga County demolition funds to clear it. RMS expects to buy the property from the city in the spring.
A private partnership between members of the Ratner, Miller and Shafran families - the founders of Cleveland-based Forest City Enterprises, Inc., a publicly traded real estate company - RMS is selling off the last, scattered bits of its real estate portfolio to focus on Van Aken.
The developer is targeting a mix of unusual or small national brands and local retailers to fill shopping and dining spaces in the project. Office tenants might include wealth-management firms, financial firms and insurers. The first group of apartments will range from 624 to 2,100 square feet, including six penthouses with rooftop decks. Palmisano said rents could be similar to what landlords are charging at new projects in Beachwood and University Circle.
Financing, including public money, is still falling into place. Shaker Heights and the local school district approved a tax-increment financing deal for the Shaker Plaza renovations, allowing part of the new property-tax revenues from renovations to flow to outdoor improvements including infrastructure, streets and parking. That arrangement won't generate any money for the larger Van Aken Center project.
Mayor Earl Leiken said Shaker expects to consider a separate TIF agreement and other financial support for Van Aken Center, though he said it's too early to talk specifics. The project faces the hurdles of structured parking, which is costly to build but key for office tenants, and local property taxes. Shaker Heights has the second-highest taxes in the state, trailing only Cleveland's Shaker Square neighborhood.
Leiken stressed that any city assistance for the Van Aken Center project will flow to public improvements, not private spaces. Another tax-increment financing deal would require approval from the school district.
"Our entire community is very enthusiastic about this project," Leiken said, noting that more than 7,000 people turned out for a series of beer gardens in the Van Aken Center parking lot last summer. "I think, once the new center opens, we're going to get an overwhelming response. We're very pleased with the way things are coming together."
Cuyahoga County Council is considering a loan of up to $4.3 million for the project, from a pool of casino-tax revenues set aside for economic development. The proposal marks the county administration's first look at a project beyond downtown Cleveland, which had exclusive access to the casino cash for the first few years after gaming debuted in Cleveland and across the state. The geographic restriction on the money rolled off a few months ago.
"It's a terrific project," Nathan Kelly, the county's interim development director, said of Van Aken. "It's encouraging density in already dense suburban markets. It shows that this kind of model works. The reinforcement of transit-oriented development - staying connected to both job centers and high-density residential where the workers already live - is proof that this is a model for where development is going. And it's going to be very good for the county, long-term, to see more projects like this."
A development summary attached to the proposed loan legislation predicts that the project could support more than 550 permanent jobs. The loan legislation was introduced Oct. 13 but hasn't been scheduled for committee discussion yet.
Lastly, a $500,000 state grant will pay for a park in the middle of the project. RMS will own and maintain the park, but the city will control the land through a long-term lease deal with the developer. Palmisano said RMS also is pursuing a state loan to support green infrastructure related to storm-water management and runoff.