Monday, June 12, 2017

UC3 Project to create a 'downtown' University Circle

A major development that will change the face of University Circle is moving along without much fanfare. The City of Cleveland, the Cleveland Public Library, and private developer Midwest Property Group have put the gears in motion to repurpose the former site of the Third District police headquarters, the MLK branch of the public library, and several parcels of central park space in the heart of University Circle.

Proposed buildings in white.
The ambitious project also involves a total rerouting of traffic through University Circle -- the elimination of the fork separating Chester, narrowing Stokes Blvd. and eliminating a handful of disused access roads to calm traffic and open up land for development.

The project could add over 700 apartments, ample streetfront retail opportunities and provide a much more inviting streetscape for pedestrians. This, combined with the One University Circle project directly to the south, could increase the population of this small area by over 1,500 by next year.

Land acquisition is moving forward with UC3 holding companies already having acquired more than half the site including the former city park land in the center of the circle.

Land acquired by developer in red.

Read more press coverage here:

Centric: Transit-oriented development in University Circle

Panzica Construction took to Twitter last week to brag about its latest project, a 272-unit apartment complex colocated with the Little Italy RTA station.

Formerly known as the "Lot 45 project," this project replaces a the eponymous CWRU/CIA parking lot that separates Little Italy from University Circle. The seven-story, mixed-use building will include streetfront retail, covered parking, and a rooftop patio. Perhaps the most important part of this building is its direct connection to the rapid-transit station that was recently relocated to Mayfield Road from East 120th Street, where it stood disused and neglected. This project will be one of the most ambitious deployments of transit-oriented development in the state once finished.

Once finished, the $70 million project expects to rent at $2.25 per square foot. The author happens to believe that this is very optimistic given the rapidity of apartment development in the immediate area, but things must need to be said in order to secure financing. We welcome the addition of new development to tie the community together.

Thursday, April 9, 2015

Here's a Sledgehammer, Kill that Fly: The Laughable Nature of Cleveland City Ordinances

Sometimes, my day job requires me to do some light reading of the Cleveland City Ordinances. Almost every time I crack open this tome, I feel like I'm the only person who has ever read this stuff. There really are some Easter eggs in here. Here are just a few: 

The Ridiculous Penalty

This one is from the Zoning Code, which aside from the zoning rules, also contains off-street parking rules and regulations of the sizes of political signs. Get this:
§ 327.99  Penalty. [A]ny person, firm or corporation who violates any of the provisions of this Zoning Code or who fails to comply shall, for each and every violation or failure, be fined not less than one hundred dollars ($100.00), nor more than five hundred dollars ($500.00) or imprisoned for not less than ten (10) days, nor more than ninety (90) days, or both. A separate offense shall be deemed committed each day during or on which such violation or failure to comply is permitted to exist under notification thereof. Cleveland City Ords. § 327.99(a). (emphasis added)
So, for violating any provision of the Zoning Code, the least amount of money you can be fined is $100 per day the violation continues. If the city really hates you, they could hit you with the double-whammy of 90 days in jail.

"Why, shouldn't there be a fine for violating the zoning code?," you ask. I agree, of course. I take issue with the daily penalty requirement. Some of these zoning code requirements are downright trivial and can last for years. What's more, the zoning code requires a minimum fine of $100 per day. In a situation where the owner inadvertently violates the code for a year, the city would be required by law to levy a $36,500 fine. Anyone who thinks that this punishment is proportional to the crime needs to pass the pipe.

This type of legislation tends to reduce formal enforcement actions against more "everyday" violators to something close to zero. The city instead focuses all of its efforts on punishing only the most egregious bad actor with swift, malicious and horrifying punishment. This is something similar to the system of jurisprudence in the middle ages. Way to go, Cleveland.

Let's explore the types of things that can land you in hot water for a $10,000+ fine and 90 days in jail:
  • Erecting a sign of more than four square feet in your urban garden
  • Keeping more than one chicken per 800 feet of land
  • Not storing your trash cans out of sight
  • Leaving an unused satellite dish on the house for more than 6 months
  • Posting a political sign bigger than 8 square feet.
That's a hefty penalty for the politically active resident. Election season is a long time.

Due Process Denial

Here's another fun one, that tries to impose guilt without trial.
   (b)   The imposition of any penalty under this division shall not be construed as excusing or permitting the continuance of any violation, and when the violation constitutes a nuisance, any owner of the premises, whether the owner at the time the violation was committed or his or her assignee, shall be deemed guilty of a violation of this Zoning Code each day he or she permits such nuisance to continue unabated after due notice from the Director of Building and Housing of the existence of such nuisance. Cleveland City Ords. § 327.99(a). (emphasis added).
Ahem, have we heard of a little thing called "due process?"

Granted, I understand what they are trying to do here: they are attempting to create a rule that allows whatever tribunal imposing the penalty to assume guilt from prior acts without having to relitigate for fines. There is a concept called issue preclusion that is a similar concept, but this requires that the facts at issue be the same as before. Here, the facts are always different, because each day the violation continues is deemed different for the purpose of levying fines. The city is trying to have its cake and eat it too.

I'd laugh, but the truth is that this is tragic. I bet the same problem exists nationwide.

Friday, March 13, 2015

Lower unemployment != recovery

Think there's a recovery afoot?

Civilian labor force participation rate

 The percentage of civilians at work is lower than it was in 1978 -- a year when far fewer women participated in the labor force.

Friday, November 21, 2014

Cleveland is getting public 100-gigabit internet connection

Building upon a legacy started by Case Western Reserve University, the City of Cleveland has launched an initiative to create one of the fastest publicly available internet services available to the public.

Linking downtown to the city's technology center in University Circle, the project will provide 100 gigabit internet service to commercial enterprises, and eventually, residents. It will connect to an existing 100-gigabit network at Case Western that links Ohio institutions and government entities together, and for the first time, the public will be able to tap into such high speeds.
"We can tell the next candidate from Silicon Valley, 'We have the first 100 gig Internet right here in Cleveland.'" And you don't.

 "The commercial Internet is being reinvented in Cleveland," said the article related on Read more here.

Some will remember a few of the groundbreaking networking projects that have germinated in this city.

In 1971, Case Western Reserve University was one of the first ten universities to be connected to ARPANet, the predecessor to the internet.

One of the predecessors to the internet as we know it was the dial-up bulletin board system. Later iterations would produce CompuServe and the more graphically friendly interface America Online. The inspiration for both of these services can be traced back to the Cleveland Free-Net, which was run by faculty at Case Western. For many years the system served as an archetype for the implementation of similar services across America.

Monday, November 17, 2014

Downtown Cleveland needs a parking tax

Cleveland city officials and developers have lately begun making noise that the city center is short over 600 parking spaces thanks to the development of the new convention center and its companion Hilton hotel.

Naturally, the need to serve an increased number of visitors with parking facilities can be viewed as a boon to local businesses, not the least of which, the parking lot operators. But what is the economic cost of all this?

We Clevelanders have learned a painful lesson about surface parking lots: they destroy the urban fabric of a neighborhood and discourage surrounding development. Below is a forty-year time lapse photo of the historic Warehouse District, as taken from the top of the Terminal Tower.

Most agree that surface parking lots in central business districts are categorically a bad thing. Land devoted to storing idle automobiles is not productive land. Dimly-lit surface lots encourage crime and kill pedestrian activity. Open land creates windswept sidewalks unpleasant for walking. Cheap parking discourages uses of pre-existing efficient transportation methods. To this end, several cities in the United States have identified the elimination of surface parking as one of their enumerated goals.

Current parking operators in town are also getting away with murder tax-wise as well. Because surface parking lots are not very given a high valuation when compared with, say, a 50-story highrise, parking lots pay magnitudes less property tax than their more developed neighboring lots. For example, owners of surface lot close to the WKYC-TV studio pay just $26,500, as opposed to the landowners of the Lakeside Avenue studio who pay a staggering $158,000 for roughly the same amount of land. Couple a low tax bill with a practically risk-free business model of selling little tickets to people for $5 per day, and one can see why surface parking is such a good business to be in today in Cleveland.

The reality is that the surface lot is costing us all money in the form of reduced property taxes to the city, higher crime, lower desirability, and the destruction of a sense of place. A surface parking lot owner is little more than a squatter, making the easy money selling small pieces of paper to solo motorists while waiting for the next building boom to increase property values. Unfortunately, when a market is composed entirely of rent-seeking squatters, that building boom never materializes.

The Golden Rule of Politico-Economic Policy

The government has a powerful tool in its arsenal to guide growth and development in the right direction. The old adage goes: if you want more of something, subsidize it; if you want less of something, tax it. Currently, downtown surface parking lots are enjoying something of a subsidy in the form of a reduced property tax burden when compared to owners of more productive, adjacent real estate. Instead of giving owners of fallow properties tax breaks, we ought to tax them just enough to make them go away.

Raise the Parking Tax: Pittsburgh case study

Pittsburgh is one of the best examples of a progressive parking-elimination policy. Its 37.5% tax on parking revenues is one of the highest in the nation. The surface parking lot is a rare sight indeed in Pittsburgh's central business district.

Clearance of slummy surface lots from highly valued land is not the only benefit of such a high tax. Pittsburgh collected over $44 million from its parking tax levy when it was implemented in 2004 in current form. 

Impact on Cleveland

Cleveland has its own parking tax, an 8% levy passed in 1995 to fund the construction of the Cleveland Browns Stadium. With a quick peak at the city budget, we can back-calculate just how much more the city will earn from a hypothetical tax hike to match Pittsburgh's 37.5% tax.

  • Cleveland 2014 budget for parking tax collections (8%): $11,250,000
  • Cleveland projected parking tax collections (37.5%) assuming revenues are unchanged: $52,734,000
  • Projected difference: $41,484,000
  • Percent increase in total revenue receipts: 8.25%

By enacting this space-saving, city-rebuilding measure, the City of Cleveland can increase its revenue to budget by 8.25% overnight in an almost risk-free move. 

How will a parking tax affect the availability and pricing of parking downtown? Generally, studies indicate that parking demad can be somewhat price elastic -- that is, consumers will more readily substitute a cheaper option when the price rises, like carpooling or public transportation. Given that parking rates are based on what the market will bear, price-sensitive consumers will substitute cheaper options like parking further away, or using the train, thus resisting parking lot operators' attempts to pass on the parking tax to the consumer.

Even if parking lot operators decided to simultaneously preserve their margins by passing on the cost to consumers, the average $5 parking spot would rise to $6.37 -- a small price to pay to put the surface lots out of business.

In the long run, parking rates will increases as the now unprofitable surface lots become redeveloped into more productive office buildings or residential units.

To recap, we will see several benefits from a parking tax increase:
  • Encouraged redevelopment of surface lots into more productive uses
  • Higher ridership of public transportation systems, leading to service expansions
  • An increase in demand for downtown residences as people desire to move closer to their places of employment
  • Increased density of the central business district
  • Increases in urban tourism and streetside activity
  • A decrease in crime in dimly lit, unpatrolled parking lots
  • A $44 million increase in revenue to the City of Cleveland

"We city-dwellers don't like to think of parking as expensive; we prefer to think of our suburbanites as cheap."

On top of that, it will close the loophole allowing parking lot operators to pay an unfairly small share of property taxes, encourage more new construction downtown, and revive the historically high density that once characterized Downtown Cleveland.

Tuesday, September 30, 2014

Occupancy rates of newly opened downtown office-to-apartment conversions

The most recent residential offerings in Downtown Cleveland are getting snapped up by renters hungry to experience urban living. This red-hot market is running between 96-98% leased and developers can't produce enough units. Here's a roundup of what's been happening.

Residences at 1717

Formerly known as:
The East Ohio Gas Building
Construction started:
September 11, 2013
Construction finished:
March 2015 (estimated)
Rents: $1.25 per square foot
Lease-up rate: 65% (as of August 26, 2014)

"The 9"
Formerly known as: The Ameritrust Tower
Construction started: February, 2013
Construction finished: September, 2014
Rent: $2.00 per square foot
Lease-up rate: 90% (as of September 4, 2014)
A Marriott signature hotel property will partially occupy the tower, alongside apartments, a movie theatre, several restaurants and an indoor dog park. Includes the historic and stunningly appointed Cleveland Trust Rotunda, which is slated to become a Heinen's upscale grocery store.