The acquisition of 6555 Carnegie Ave. is set to close in late September. The four-story building will be redeveloped and could reopen in March.
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View full sizeA tour group walks through the central MidTown Tech Park building in Cleveland in May 2011. The suburban-style park, in a former industrial neighborhood, is growing to include several buildings designed to house growing Cleveland companies and suburban tenants looking to move. Hemingway Development is planning its $8.9 million third phase, at 6555 Carnegie Ave.CLEVELAND, Ohio -- An urban business park keeps growing in Midtown Cleveland, where Hemingway Development is testing the market for growing Cleveland companies and suburban tenants looking to move.
The developer, part of the Geis Cos. of Streetsboro, has a contract to buy a 64,000-square-foot building at 6555 Carnegie Ave.
The deal, set to close in late September, will add a third structure to the MidTown Tech Park, an emerging suburban-style office park in a former industrial neighborhood.
With the $8.9 million acquisition and redevelopment of 6555 Carnegie, the park will comprise 242,000 square feet -- much of it leased or spoken for.
"I think this building has got a ways to go," said Fred Geis, a Hemingway principal. "But we wanted to create a three-building campus. ... It gives people moving from the suburbs confidence. They see an engineered community. They want to have a suburban feel, while still moving back into the urban environment."
The city of Cleveland is considering $4.5 million in low-interest, federal pass-through loans for the project. To create a debt reserve, the city would use tax increment financing, tapping anticipated property-tax increases that aren't allocated to the Cleveland schools. The financing is contingent on approval from Cleveland City Council, said Tracey Nichols, the city's economic development director.
The city anticipates that phase three of the MidTown Tech Park will support 90 jobs and generate at least $117,000 in annual payroll taxes. Geis plans to reconfigure the building, razing a small addition near Carnegie and shifting the front door to face the rest of the business park.
"We really believe that we've got to keep the momentum going in regard to available space in that area," Nichols said. "Watching how Geis works, I really think the guy's smart."
Hemingway already has a likely, unidentified tenant for part of the four-story 6555 Carnegie building, which could open in March. And the developer is running low on space in the rest of the park.
The 128,000-square-foot first phase, a rare example of speculative construction in the city, is 90 percent tied up with leases or commitments. University Hospitals is negotiating deals on 7,000 square feet. The space would house a center that studies retinal images and the administrative offices for a grant-funded project that aims to provide better, less costly care for children.
"We're committed to the area," said Mikel Duffy, the hospital system's manager of lease administration. "This is a great building. It's got such access to technology. It's in the center of Cleveland."
Geis said the park's second phase, a redevelopment at 7000 Euclid Ave., is 72 percent leased to medical and veterans' services tenants.
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