On Wednesday, Cleveland City Council will get its first look at the proposed deal, which would give the Geis Cos. a one-year option on the lakefront property.
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View full sizeA site plan shows the possible size and layout of buildings in an office development on 20 acres south and west of Burke Lakefront Airport. The Geis Cos. of Streetsboro hopes to secure an option to lease the city-owned property, which is used for airport parking. Cleveland City Council will get its first look at legislation related to the deal Wednesday.CLEVELAND, Ohio -- A suburban developer is making a major play on downtown Cleveland's lakefront, where an office park could rise on 20 acres of city-owned property south and west of Burke Lakefront Airport.
In the first big example of private support for the city's new lakefront plan, the Geis Cos. of Streetsboro hopes to lease the Burke Development District from the city.
On Wednesday, Cleveland City Council will get its first look at the proposed deal, which would give Geis a one-year option on the property. If Geis leases part of the land or finds tenants for an office project within the first year, the city could extend the option for another 12 months.
"It's time for waterfront development to happen," developer Greg Geis said. "You have to get in there and work hard and get your fingernails dirty to get things out of the ground."
Cleveland officials see an opportunity to jump-start their vision of a bustling lakefront, after decades of plans that collected dust and requests for proposals that went unanswered.
The city's newest lakefront plan, unveiled last year, calls for office buildings ranging from two to nine stories in the Burke district. That property could support more than 750,000 square feet of offices, plus structured and surface parking.
"With the Geis Cos., you've got a qualified, quality, local, deep-pocketed developer that's got the ability and credibility to make something happen there," said David Browning, managing director of the CBRE Group Inc. brokerage in Cleveland. "If this had been in place when Eaton was out in the market, or American Greetings, they might have considered a site like this downtown."
Office occupancies have been inching up, but downtown Cleveland is still grappling with empty or near-vacant buildings -- raising the question of whether the city center needs more office space. Real estate experts say offices along the lakefront won't necessarily pull tenants out of high-rise buildings, though.
If the Geis project happens, it could lure suburban companies downtown, particularly if those businesses want access to the airport.
"It really is benefiting from the synergies with the airport, and there are a lot of companies that like to have offices near a regional airport, for private jets," said Scott Wolstein, who is developing the Flats East Bank project, which includes an office tower and hotel near the Cuyahoga River. "When I looked at the city's plan for waterfront development, I thought this component of the project made a lot of sense. I felt that this was the easiest and the likeliest to get done."
Cleveland can't sell lakefront land without a public vote. But the city can enter options or lease deals, with City Council approval. And the city does not have to solicit competitive bids, as long as the leases are based on the fair-market value of the property, said Chris Warren, the chief of regional development for Mayor Frank Jackson.
In this case, Geis would have a year to do soil testing, engineering research, design work and marketing, at an estimated cost of $600,000. Based on its findings and discussions with tenants, Geis could exercise its option to lease all or part of the 20 acres, which run east from East Ninth Street to the end of the Burke terminal.
"If this doesn't happen, the city still gets all the geological, soil testing and prep work," said Joe Cimperman, the city councilman who represents downtown. "There's really no downside to the city of Cleveland. None. And the upsides for the city are so huge. For me, this is a momentum story. The casino's done. The medical mart and convention center will be done next year. ... This can seed development around Voinovich Park and can seed development north of Browns Stadium."
Once Geis's option period ends, the city can market the Burke property to other developers -- but if Geis has executed at least one lease, the company will have the opportunity to match or beat other offers. Leases would run for 50 years, with a 47-year renewal option and rental rates based on the appraised value of the property.
Revenues would flow into the city's airport system, which owns the land and uses most of it for parking. Rent generated from the property would go toward running Burke and Cleveland Hopkins International Airport and could lead to lower costs for carriers, said Ricky Smith, director of the city's Department of Port Control, which oversees the airports, piers and docks.
Any deals with Geis will require approval from the Federal Aviation Administration.
"This is not a 10-, 15-, 20-year plan," Smith said. "This is a plan that we want to execute now. So we're moving as swiftly as we can when viable opportunities come up."
The office project would be built in stages, driven by tenant demand. Geis said he is talking to three potential tenants. When asked whether he will pitch new construction to Cuyahoga County, which needs 225,000 square feet for its new, consolidated headquarters, he declined to comment.
"Obviously, we're looking at the county portfolio," he said, "as I'm sure any developer is."
Fred and Greg Geis, who run the business their father started in 1967, see the Burke pitch as the opening chapter of a broader downtown story. The brothers, known for suburban industrial construction, have been reaching into the city with new buildings and redevelopment projects in Cleveland's Midtown neighborhood.
On Tuesday, Fred Geis and other investors bought the long-troubled Avenue District condominiums at East 12th Street and St. Clair Avenue, with plans to rent out 56 empty units. The brothers are eyeing other downtown acquisitions and plan to move a satellite office for Geis Properties, their property-management company, into the central business district.
"Fred was the first one to have a passion for the city of Cleveland, and I caught his fever," said Greg Geis, who is 44 and the younger brother. "It's contagious. Belief in Cleveland is contagious. And we're Cleveland boys. You're not going to get an out-of-town developer to come in and develop something on the lakefront in Cleveland."
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View Proposed Geis lakefront development in a larger map