First Interstate Properties, Ltd. hosted a groundbreaking ceremony today for Steelyard Commons, a $120 million commercial redevelopment project that will transform 125 acres of abandoned industrial land into the largest open-air retail center ever to be built in Cuyahoga County.

Cleveland Mayor Jane L. Campbell, along with more than 100 public, private and community representatives took part in the ceremony, officially marking the start of the development which is expected to generate 1,800 jobs, a $40 million annual payroll, and $3 million annually in property taxes that will directly support Cleveland Public Schools and neighborhood services including police, fire, parks and recreation.

Scheduled to open in Spring 2007 and developed by Lyndhurst-based First Interstate Properties, Ltd., Steelyard Commons is another step in the renaissance of Cleveland and the revitalization of one of Cleveland’s most storied neighborhoods. The project will feature more than 50 new stores and restaurants in addition to recreational amenities that evoke the industrial history of the land.

The City and the developer are working together on a tax increment financing plan that will pump a projected $13 million of private tax dollars into neighborhood revitalization projects including an extension of the Towpath Trail into the heart of the Industrial Valley and eventually into Cleveland’s neighborhoods.

"Every year, Cleveland residents spend over $1 billion on retail goods outside our City borders,” said Mayor Campbell. “Steelyard Commons gives us a tremendous opportunity to bring that spending back to the City and to provide our residents access to retail choices. Steelyard Commons not only enhances our community tax base but it also helps leverage important community projects like the Towpath Trail. This development builds on our efforts to create a modern city with a range of choices for our residents.”

Steelyard Commons is the only retail project of this magnitude designed to specifically serve Cleveland’s diverse and densely populated neighborhoods. At completion, the project will encompass nearly one million square feet of modern retail, at least eight sit-down restaurants and other service conveniences.

Local Developer and National Retailers Believe In Cleveland

First Interstate Properties is the developer of eight outdoor commercial projects, all located in Northeast Ohio. To First Interstate President and native Clevelander Mitchell Schneider, taking the development “risk” in Cleveland was a no-brainer.

That’s in part because the development will serve 320,000 residents surrounding the project that spend $600 million annually in the suburbs. The project is a short drive from downtown with nearly 200,000 commuters passing the project daily.

Additionally, Schneider believes Cleveland can be competitive with shopping centers in the suburbs. First Interstate is currently documenting deals with more than 40 retailers and restaurants that will occupy nearly 80 percent of the project.

“Our goal is to have more than 95 percent of this project leased before our grand opening in the Spring 2007,” Schneider said, adding that Target has scheduled March 11, 2007 for its grand opening.

“The fact that national retailers are committed to Steelyard Commons is a testament to what is happening in the Cleveland market – there is abundant new housing and a tremendous amount of positive energy. There’s a market out there for this project and there’s a need, and Steelyard Commons fills that need,” Schneider said.

Schneider also believes that Cleveland’s “Quiet Crisis” attitude needs to change.

“Steelyard Commons is just one example of the next development wave in Cleveland,” he said. “We are on the verge of a real estate boom that will sweep the waterfront neighborhoods with the potential created by the lakefront and the redevelopment of The Flats. Having a major shopping center within minutes of Cleveland’s Central Business District will also be a further catalyst for the downtown housing market and a real convenience to Central Business District workers that commute in and out of the city.

“Two years from now, people will see a very different Cleveland -- including the ability to drive, walk or bike through the Industrial Valley previously off-limits to the public,” he added.

Schneider and the City agree that the success of the Steelyard Commons project is based on a three-pronged effort: to create the right blend of retail and job opportunities, leverage the catalytic potential for the economic and social development of the neighboring community and preserve the historic nature of Cleveland’s industrial past.

“If all we do is put together a self-contained retail project that pulls business from the rest of the neighborhood, we have not succeeded. This project will help the neighborhood overall,” he added.

Create Retail and Economic Opportunities

Steelyard Commons will include a Wal-Mart Supercenter, The Home Depot, Target, Staples, Best Buy, Marshalls, Old Navy, Famous Footwear, Lane Bryant, and many other prominent national retailers providing an unprecedented selection of merchandise and price points for Cleveland residents. At least eight restaurants, including IHOP, Ruby Tuesdays, Eat’n Park and others will open along with a host of smaller restaurants, including coffee and baked goods shops, ice cream, pizza and other carry-out services.

More than 320,000 Clevelanders live within five miles of the project area. The development would capture some of the estimated $600 million that Cleveland residents spend on general merchandise annually outside the City’s borders. The project will be built with no City subsidies during a time that finds other cities compiling multi-million dollar incentive packages to lure similar retail developments.

All tolled, economic benefits include:

• 1,800 full-time jobs with at least $40 million in annual payroll
• $700,000 in annual payroll taxes to Cleveland
• $3 million in annual property taxes; $1.8 million annually to the Cleveland schools

Loree Soggs, Executive Secretary of the Cleveland Building and Construction Trades Council, said Steelyard Commons was a “terrific project for the building trades that will provide solid construction jobs in the years to come.”

Soggs and the building trades have a positive history of working with First Interstate Properties on the construction of all of First Interstate’s projects comprising nearly 3.5 million square feet of retail space in the past 15 years.

“The relationship between management and labor has grown through cooperation and regular meetings with developers, contractors and union members. This relationship has always been symbiotic and respectful, and we look forward to working with them on Steelyard Commons,” Soggs said.

Schneider said at least 95 percent of the project will be built with union labor. First Interstate estimates that construction of the project will generate more than $40 million in labor wages over the next 24 months – which translates into more than one million paid hours of labor.

A Catalyst for the Community

The City and the developer are working together on legislation that will create a tax increment financing (TIF) package that will support neighboring projects including the extension of the Towpath Trail from its current terminus at Harvard Avenue to Steelyard Commons. The Towpath is used by nearly two million bicyclists and pedestrians annually and bringing the trail into the City will create easy access for thousands of additional users – including City residents.

First Interstate has agreed to contribute approximately $1 million to build more than one mile of Towpath at Steelyard Commons which will be donated to the City upon completion. The Towpath project is more than just the continuation of the trail. Along the trail, bikers and pedestrians will be able to enjoy an educational experience with interpretive steel artifacts, public art and other amenities.

Schneider declined to use the TIF for road enhancements and improvements and chose instead to integrate the trail in the project.

“We owe Mitchell a debt of gratitude for donating the Towpath easement through the retail district to develop an educational and historical experience for Towpath users at his cost,” said Tim Donovan, Director of the Ohio Canal Corridor and member of the Towpath Trail Partnership. “This could create a new model for developers – using creative financing to dedicate parts of their projects for a public purpose.”

The developer will also support plans to extend the 51-mile Cuyahoga Valley Scenic Railroad excursion to downtown.

“By bringing new visitors into the market, we can spur other investments in the neighborhood,” Mayor Campbell said. “Steelyard Commons will anchor the economic development of this area and provide another base to the revitalization already underway in neighboring areas including Tremont, Ohio City and Clark-Metro.”

Marriage of the Old with the New

Steelyard Commons is bringing back to life the long-abandoned industrial site best known for its thundering LTV steel mills.

“These steel properties are Cleveland’s heart and soul,” Schneider said. “First Interstate recognizes that Cleveland has an emotional connection to this land. We have made a concerted effort to preserve and honor the site’s history with community gathering spaces and amenities that tell the stories of the workers that built Cleveland’s skyline and served as the heart of the nation’s industrial revolution.”

Steelyard Commons will respect and recall the history of steelmaking in Cleveland with architecture and amenities including a steel heritage exhibit, the re-use of salvaged artifacts as public art, a utility bridge as a gateway entry, towers, cranes, working rocker-arm gas wells, railcars, bus shelters constructed of reclaimed steel, a children’s playground designed in the look of a steel mill and dramatic lighting.

First Interstate today also unveiled a new Web site devoted to Steelyard Commons – www.steelyardcommons.com. The Web site provides information about the project including images of the area (soon to include monthly construction progress photos), site plan, road and access details and a brief video.

About First Interstate Properties, Ltd.

First Interstate Properties, Ltd. is a Lyndhurst, Ohio based full service real estate development and management company. Since its inception, First Interstate has built a sound reputation as a development firm concerned about and responsible toward the impacts of commercial growth on surrounding areas. First Interstate's reputation as well as its success, are premised in First Interstate's professional approach to addressing impact issues and solving community problems in a proactive fashion.

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