A market study of the University Circle area shows that hospitals, institutions and nonprofit groups are fueling more than $3 billion in construction and creating thousands of new jobs. That presents opportunities for private developers who want to build apartments to house medical residents, graduate students, specialists and researchers who are in Cleveland for only a few years.
CLEVELAND, Ohio -- Hospitals, institutions and other nonprofit groups have been creating jobs and fueling construction projects in University Circle, laying the foundation for more apartments and other private development in the neighborhood.
Since 2005, 17 organizations in the Greater University Circle area have added the equivalent of 4,540 full-time jobs, according to a study scheduled for release this week. Those organizations could create 2,900 more jobs within five years, expanding their collective workforce to a projected 36,758 full-time positions.
The study was jointly paid for by community development group University Circle Inc. and the Finch Group, a Florida developer that has been investing in the area. Projecting growth through 2015, the research could be a valuable tool for developers considering projects between East 90th and East 120th streets.
"It's hard to find anywhere else in the region or the state of Ohio, for that matter, that has incurred growth in a down period," said Chris Ronayne, president of University Circle Inc. and a candidate for the new Cuyahoga County Council.
Several years ago, UCI commissioned a report that predicted 10,000 new jobs and $3 billion in construction and capital improvements in the neighborhood from 2005 to 2015. This new study, conducted by Real Estate Strategies Inc., found that the area likely will exceed that construction goal but could miss the 10,000 jobs mark.
The updated research forecasts more than $3.1 billion in construction, according to an executive summary obtained by The Plain Dealer. But the 17 institutions will create the equivalent of 7,440 new full-time jobs between 2005 and 2015 -- about 75 percent of what UCI expected a few years ago. The 17 organizations surveyed represent approximately 95 percent of employment in the area.
Ronayne called the job creation an "enormous success" and attributed the reduced projections to the economy. He added that projects at the Cleveland Clinic, University Hospitals, the Louis Stokes Cleveland VA Medical Center and other institutions are supporting, on average, more than 3,000 construction jobs each year.
"We do both real estate advisory work and economic consulting across the country, and there aren't many places that have the number of cranes that University Circle does," said Elizabeth Beckett, senior vice president at Real Estate Strategies, based near Philadelphia.
The 17 organizations have 31,984 full-time workers and 6,245 part-time workers. Tack on indirect employment, such as businesses that open or expand because of Case Western Reserve University or the Cleveland Museum of Art, and you get the equivalent of 82,611 full-time jobs, or about 12 percent of employment in Cuyahoga County.
Collectively, those jobs have an economic impact of more than $14 billion a year in Cuyahoga County. Add in jobs and paychecks tied to University Circle construction projects, and the annual economic impact surpasses $20 billion.
Several developers already are building on that growth. Buyers are snapping up townhouses at 27 Coltman in Little Italy. WXZ Development, of Fairview Park, is putting up townhouses along Euclid Avenue and has plans for 60 apartments on Hazel Drive. And construction recently started at Uptown, a mixed-use project at Euclid and Mayfield Road that includes apartments, stores and restaurants in its first phase.
Development opportunities prompted Wes Finch, chairman of the Finch Group, to partner with UCI and pay for the market study. Finch owns Park Lane Villa, a high-end apartment building off East 105th Street. The building is constantly at or near capacity, teeming with medical residents, graduate students, specialists and researchers spending a few years in Cleveland.
For several years, Finch has been eyeing a 97-acre development site known as Upper Chester, at the edge of the University Circle, Hough and Fairfax neighborhoods. He hopes to build 240 apartments on 3 acres just west of East 101st Street, along Chester Avenue. Another developer, NR Investments Inc. of Miami, recently has been floating a competing mixed-use proposal for the property.
Finch believes the Real Estate Strategies report will help developers attract lenders to projects like Upper Chester.
According to the study, nearly 10,500 of the employees from the 17 organizations live in six nearby ZIP codes, in Cleveland, Cleveland Heights, Shaker Heights, Beachwood, Lyndhurst and Pepper Pike. Earlier this year, more than 2,800 employees were in University Circle on limited-term contracts, typically one to three years.
"This shows demand that is greater than our capacity to produce," said Finch, who is looking at other development opportunities around University Circle. "This whole area really does not have a significant amount of quality housing. It's ripe to grow."