City Council Observed: Real Estate Development Spanning 145 Years

1470 Warren Ave from Victoria Ave

The Housing, Planning & Development Committee met on Monday, March 25 at 6:00 PM. Thomas Bullock - Committee Chair, Jason Shachner - Committee Member, Kyle Baker - Committee Member, Sarah Kepple - Council President, and Cindy Marx - Council Member Ward 4 attended the meeting along with Mayor Meghan George, Law Director Ernie Vargo, Director of Planning & Development Shawn Leininger and members of the community.

The first business item was Ordinance 05-2024 which the committee and council had discussed one week prior. This ordinance would allow the city to enter into an agreement with a licensed broker for the sale of multiple properties. Four individuals from the audience addressed the committee. Two speakers asked the legislators to contemplate how 16016-16024 Madison Ave might benefit the community as a senior living facility; urging the elected officials to consider all facets of future offers for the property and not simply accept the highest bid. Another commenter representing the Lakewood Child Care Center (the only current tenant of 1450 Belle Ave) expressed LCCC’s desire to expand their presence in the building and pointed out that they had already made many upgrades to the building at their own expense. LCCC is interested in buying the parcel. Committee member and councilperson Kyle Baker stated that he would abstain from commenting or voting on this ordinance as his wife, Allison Baker, serves on the LCCC board.

The Committee then voted to remove 1450 Belle Ave, 16016-16024 Madison Ave and 16021 Madison Ave from the proposed legislation as these are commercial properties while the others listed were residential. With the Belle parcel removed, Baker reentered the discussion. He then proposed that two members of council closely monitor the sales process for these properties. Shachner suggested that President Kepple and the Ward 2 representative (himself) serve in these roles. This was approved by the committee. 

The ordinance was ultimately recommended to Council. Bullock stated, “Those parcels are strategically important because we have control over them… the commercial properties on Madison.” He continued, “Because Lakewood only has so many vacant parcels for redevelopment… we need to make our shots count and be thoughtful and choiceful in achieving our community good.”

In reference to 1450 Belle, Bullock restated his position from 7 days prior that he would like to see a more in-depth analysis of the structure and explore what it would entail to keep the property. His closing remark was, “I’m still of the mind that this is a key asset for the city and that we should retain the ownership unless we have a clear and compelling reason to transfer the property to a private owner.”

The next portion of the meeting dealt with Ordinances 03-2024 and 04-2024. These ordinances deal with the old Board of Education buildings on Warren Ave. East Rockport Central School sits at 1456 Warren Ave, was built in 1879 and is 10,000 sq/ft.  The old Grant School building is located at 1470 Warren Ave, was built in 1899 and expanded in 1905 to 26,000 sq/ft.  Both buildings are older than the City of Lakewood. Liberty Development acquired the properties in 2018 and they have sat vacant since that time. Liberty’s plan is to rent out the smaller Rockport building as office space and the Grant building as a residential building with 28 mostly studio and 1-bedroom residences.  

The ordinances propose a loan of $500,000 and a tax-abatement plan for the developers.  A presentation from Director Leininger cited the expense of historic restoration, rising labor costs, high interest rates and competition for tax credits from other local historical renovations as justification for the need of assistance for this development. Liberty does not expect to make a profit from this investment for at least 10 years. They plan to maintain ownership of the buildings for over 20 years.  

$200,000 of the proposed loan would go towards energy efficiency improvements in the Rockport building and the other $300,000 is for the overall project and historical preservation.  The proposed tax-abatement is a 15 year, 100% tax-abatement on the residential property and 75% tax-abatement for the commercial. Also proposed is a 30-year TIF (Tax Increment Financing). “A TIF is an economic development mechanism available to local governments in Ohio to finance public infrastructure improvements and, in certain circumstances, residential rehabilitation.” -(ohio.gov) These properties did not produce any tax revenue for the city at all until 2018 when Liberty took ownership. 

Discussion on this ordinance went on for almost an hour. After Director Leininger’s presentation Dru Siley, who held Leininger’s position as Director from 2008-2016 and is now VP of Development for Liberty Development Company, spoke on the developers behalf.  Almost every member of council present asked questions of the two presenters.  

Some members of council were a bit chummy with former Director Siley for my taste but asked legitimate questions and received satisfactory answers. Council President Kepple asked what recourse the city would have if Liberty failed to uphold their side of the agreement to do this work on the buildings and maintain their historical charm. Siley pointed out that Lakewood would be both lien holder and manager of the tax-abatement. He stated that any failure by the developer to satisfy the agreement would put their tax benefits and loan at risk. Councilman Baker said that there should be a high bar for access to public incentives but that he feels this project and its agent are worthy.  

Liberty Development Company has been based in Cleveland since it was founded in 1996. Co-Founder, CEO and President Tom Kuluris is a Lakewood resident. LDC was one of at least 5 bids for this land and was the only bid that did not plan to demolish the two buildings. It was made clear that readying these facilities for tenants and turning them into a profitable business venture would not be possible without the proposed incentives. Siley described the interiors as “rustic” but noted that the structures are sound. He stated that the current plan is to charge less than $2 per sq/ft for the residences.

The meeting began at 6:05 and was adjourned at 7:34. 

Theodore Babcock

Local Man/Photographer

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Volume 20, Issue 7, Posted 4:24 PM, 04.03.2024