Northern Lights may be visible over Cleveland tonight

Photo credit: Visit Finland

WASHINGTON -- Northerners thawing out from a bitter freeze may get rewarded with shimmering northern lights the next couple days.

Federal space weather forecaster Joe Kunches said the sun shot out a strong solar flare late Tuesday, which should arrive at Earth early Thursday. It should shake up Earth's magnetic field and expand the Aurora Borealis south, possibly as far south as Colorado and central Illinois. He said best viewing would probably be Thursday evening, weather permitting.

Story here: http://www.wkyc.com/story/weather/2014/01/08/northern-lights-from-solar-flar/4375371/

If we have clear skies tonight, the Aurora Borealis is an incredible sight and it's likely we're not going to get an opportunity to see this again here for a good while.

Fairmont Creamery deal in Tremont closes

Fairmont Creamery deal in Tremont closes; construction on apartments, offices, retail to start

Dimit Architects

By Michelle Jarboe McFee, The Plain Dealer 
Email the author | Follow on Twitter 
on January 06, 2014 at 2:25 PM, updated January 06, 2014 at 2:32 PM

CLEVELAND, Ohio -- Despite the frigid temperatures, work will start this week to turn a former creamery building in Cleveland's Tremont neighborhood into a home for apartments, a business accelerator and other tenants.

A developer trio has purchased the Fairmont Creamery building on Willey Avenue for $450,000. Real estate records show that the sale, part of a $14.9 million redevelopment deal, closed Dec. 30th.

In a testament to the strength of the rental market, Ben Ezinga, Josh Rosen and Naomi Sabel say they have a waiting list of more than 85 people for 30 apartments. That's after just two weeks of casual marketing on Facebook and Craigslist, for a project that won't open until October or November.

Read more: http://www.cleveland.com/business/index.ssf/2014/01/fairmont_creamery_deal_in_trem.html

http://www.freshwatercleveland.com/devnews/fairmontcreamery021413.aspx

Author's note: This development is uniquely located in the previously industrial valley between what is commonly considered Tremont, Ohio City, and Clark-Fulton. Although it is located in the Tremont neighborhood, it would definitely be considered outside the periphery of Tremont residents and visitors. It is the first of its kind.

Vacancy in the City of Cleveland, the untold story

Apartments in Slavic Village - by Stuart Spivack

As of the 2010 census, Cleveland proper's vacancy rate has reached 22%--about twice as high as the national average and higher than every major U.S. city except Detroit. Abandonment is a common sight in the center city, and the numbers don't lie about this.

There's a notion about town that population decline in the center city is to blame for the abandonment problem. It's like a meme--repeated by amateurs, experts, public officials and residents--that Cleveland was a city built to house a million people, and needs to "right-size" to house its current population. These ideas in turn lead public officials to pursue somewhat misguided policies like indiscriminately tearing down houses. Entire political campaigns are founded upon the idea that Cleveland is "too big" for the number of people living in it, and the solution to all its social ills is to destroy perfectly livable homes, and even entire neighborhoods.

There's something about this argument that just doesn't sit right with me. Vacancy was not a major issue before the foreclosure crisis:

There are two clear points of interest in this chart: 1960-1970 and 2000-2010. The first jump in vacancy can probably be attributed to the aftermath of social unrest reflecting the time of the Hough riots, social and civil unrest and white flight. The demographics of entire neighborhoods changed overnight as the result of this intense social change as white residents flocked to the suburbs.

This leads us second point of interest: 2000-2010. Vacancy doubled during this period. I can't think of any better explanation than banks evicting people from their own homes post-foreclosure, or people moving out as soon as they realize they can't afford the payments. This had nothing to do with the city's slow population bleed: this was quick and sudden.

So assuming that the current vacancy problem wholly stems from the foreclosure crisis, why did vacancy stay flat from 1970-2000? Can the vacancy problem not at least partially stem from the loss of population, especially when population is off by 59%? How can a city with a housing stock built to house a million people not experience abandonment when the population has fallen this much? The answer is something of an urban legend because it wasn't well-observed when it was happening, but the census data tells the story alright. The answer is overcrowding.

The chart tells a historical narrative--in the city's most growth-heavy years of 1890-1930, housing concentration is at its greatest. People moved to the city in droves, often taking up residence in crowded residential hotels with shared facilities. It took until the 1940s for the supply of housing to catch up with population growth. Locals will regale you with tales of growing up living with their entire extended family in a single small home or duplex, simply because no vacancy was to be had, and rent was expensive. The average occupancy rate per unit hit seven people per unit at its height.

Here's another method of analyzing overcrowding. In 1950, the census began logging the average number of persons per room of a unit and whether that unit shared or lacked facilities. We can assume that more than one person per room in a unit is a sign of overcrowding. Along the same lines, units lacking dedicated kitchen and bath facilities, such as flophouse rooms or single-occupancy residential hotel rooms, are obsolete and don't impact the city's current housing stock because of their rarity.

As the chart shows, as the population fell, these units "right-sized" themselves by being pulled off the market. Whether the flophouses were torn down, reconverted to single-family homes, or repurposed entirely is not evident from the data, but what we do know now is that these units--some 54,000 at their peak--were phased out when they were no longer needed as the population fell.

The trend of declining household size is a national phenomenon. It's not a Cleveland-specific problem, nor should it be viewed as a problem at all. Smaller households are now able to afford to purchase or rent more square footage per person, which in any case could be construed as an indicator of wealth. There's no need to tear down these houses in order to artificially prop up home prices--these actions only make housing more unaffordable for us all.

Yes, the abandonment issue is rooted in a simple economic problem--home prices are so low here that an outdated and beat-up foreclosure isn't worth investment--but that's not because "we're too big." There's no deeper local economic issue that caused all of this overnight vacancy, nor is it accurate to state that vacancy is the way it is because everyone left. We may have an abundance of cheap houses in this city, but by no means have we run out of people to occupy them.

A peek at the new Heights High

This November, Cleveland Heights and University Heights residents passed a $134 million ballot initiative to return Heights High to its stately 1925 appearance with a complete renovation. (Two middle schools are also slated to be renovated.) Although the price tag seems steep, deferred maintenance has taken its toll on the building and many facilities are unsafe or functionally obsolete. Here's a rendering of the proposed frontage on Cedar Rd.:

Filling the Donut Hole: Migration Patterns in Cleveland

Ohio City Inc., the community development corporation for the Ohio City neighborhood, recently commissioned a white paper entitled "From Balkanized Cleveland to Global Cleveland" (authored by Richey Piiparinen and Jim Russell) found here. The paper addresses a wide breadth of subjects, but the most important takeaway is the confirmation of a trend of urban in-migration among young people, put in graph form.

City populations change by means of four basic events:
1. People move in
2. People move away
3. Births
4. Deaths

Large cities like New York and Chicago have abnormally high rates of both (1) and (2) such that they're constantly churning residents as people move in for a few years and then move away. Cleveland, by contrast, has very low rates of both move-ins and move-outs, but slowly leaks away population as the replacement rate by move-ins and births do not balance out the formula.

A 30,000 foot view of the population of the greater Cleveland area indicates a slow, drawn-out decline:

Source: City of Cleveland, City Planning Commission

Two alternative examination of population growth trends tells us a different story, and serves as a leading indicator for things to come. The first is the much-ballyhooed increase in downtown population, especially when compared with other neighborhoods:

Source: MetroTrends Urban Institute

The real story behind the decline in downtown population in the 1950s and the subsequent rebound in 1970 was because of urban renewal and the construction of housing projects. Different about this new wave of growth is the absence of public housing construction driving it -- these are almost entirely privately driven, market-rate apartments occupied by urban professionals.

Another method of making sense of the aggregate data is is to break down the data by age cohorts. As seen here, "unexpected" downtown population growth is off the charts for the under-35 age group, and the adjoining residential neighborhoods Ohio City and Tremont are experiencing the same kind of growth among 25-34-year-olds. 

Source: MetroTrends Urban Institute

With this data, it's easy to hypothesize that the younger cohorts are following the predictable pattern of graduating school, moving to the city from their parents' sleepy suburb, getting a job downtown. When the late 30s and 40s roll around, it's time to get married, move to the suburbs, have kids, and repeat the process. This is a pattern that we've witnessed before in places like Chicago, New York, and San Francisco, although the recession is causing delays in family formation (we've even fallen below the replacement rate in the aggregate).

The author's explanation of this trend all align to tell the story of declining opportunities and degrading quality of life offered by the nation's "global" cities:

[W]hat cannot be overlooked is the “cool fatigue” that’s affecting many global city inhabitants. There is an increasing chorus of concern that global cities are turning into “vast gated communities where the one per cent reproduces itself”. Here, rising housing costs, deepening income inequalities, cultural homogenization due to vast commercialization of local neighborhood identity, it all provides psychogeographic fuel for seeking alternative, “frontier” locations...Taken together, talent is slamming into a ceiling in thick labor market metros. They are increasingly finding a better return on their skills in Rust Belt cities like Cleveland. 

(Source: Balkanization)

This is positive news for Cleveland and the rust belt in general, but the one key missing agreement is the attraction of talent via in-migration. We need to be more proactive to attract immigrants to this city. And it might even be time for City Hall to consider opening its mind to the attraction of international immigrants, too.

Move Silicon Valley to Cleveland!

Author Matthew Yglesias over at Slate recently caught some attention for making a bold claim: Move Silicon Valley to Cleveland. 

Cleveland’s lakefront (Photo by Sam Bobko / Creative Commons)

He has a point, after all: tech companies' presence are no longer appreciated around inward-looking San Francisco, and techies share the feeling. And most importantly, as Yglesias points out, The Rent is Too Damn High in the Bay Area. I don't suppose it's a minor coincidence that Yglesias has authored a book by the same name.

"The influx of money, young people, and business investment into Silicon Valley hasn’t led to a construction boom and the urbanization of the area. Instead, the local towns continue to insist on strict, suburban-style zoning that essentially rules out new housing supply. Nor are city officials in San Francisco interested in rezoning to allow for more population in a city that’s currently only about half as dense as Brooklyn."

Yglesias, in his tongue-in-cheek commentary, is pointing out a very real and increasing disparity that exists within America: the growing gap in the cost of living between coastal cities and the rest of America.

Silicon Valley itself has been getting quite a bit of flak lately, too. Consider Why Silicon Valley is the Next Detroit.

[W]hen you have more knowledge, tools and capital, some of the other things the valley prizes become common elsewhere as well. A culture of achievement, for example. As only people who have lived in a subculture that keeps them down know, the valley is a unique place where even surfers think they can be the next startup billionaires, leading to the creation of a company like GoPro.

In The End of Creative Class Migration, Jim Russell really cracks the story open for us here:

Perhaps there is more to this artist exodus after all. The rent is too damn high for the Creative Class. Brooklyn is too cool for school, until now. Talent attraction is no longer good enough for economic development.

At the root of this discussion is the clash of two separate ideals, one which promotes the development of "hubs" like Manhattan or Silicon Valley or Hollywood, and another that predicts that telecommuting and location-irrelevant workplaces will soon become the norm:

Richard Florida says the world is spiky. Thomas Friedman holds the opposite view. The world is flat. Truth be told, the world is spiky and flat. Both Florida and Friedman are wrong. The Creative Class economy is getting flatter... 

“Now, the smartest kid has a whole set of options; the best and the brightest go to Berlin, or Austin, Portland or Minneapolis,” says Robert Elmes, director of Galapagos Art Space, a Dumbo performance space for emerging artists, that is opening a venue in Berlin. “The recession has created a situation where people don't consider New York City to be a place of opportunity.”

New York City is no longer a place of opportunity. That is a remarkable statement with some great weight, and huge consequences to the future of declining cities like Cleveland.

Tech, part of what economist Enrico Moretti terms the "Innovation Economy," is converging. Until very recently, the Innovation Economy was diverging. Richard Florida was right. The world was spiky. Now, Silicon Valley is the next Detroit. I'm serious.

When labor costs become an overriding concern, an economic epoch has reached a tipping point. With efficiency gains, less employees produce more goods. As manufacturing converged, innovation diverged. Detroit fell. Silicon Valley rose. 

There's no doubt that technology will play a substantial role for the future landscape of the United States and the world at large. There is further no reason to believe that technology won't make it easier for a tech worker to collect a Silicon Valley wage from a Silicon Valley firm while living in a quiet, beautiful greater Cleveland neighborhood in a house that rents for less than the cost of a Nob Hill studio.

Convergence is going to happen, and it's going to be at the expense of the coastal bubbles and bring dividends to the rest of the country.


Further reading:
Silicon Cleveland, Where the Rent Isn't Too Damn High
Rust Belt of Silicon Valley: San Jose Is Dying
Some Further Thoughts on Moving Silicon Valley to Cleveland
The Innovation Economy is Dying

Development roundup in Cleveland - June, 2013

The Cleveland real estate market, long stalled by a combination of poor economic prospects and a poor national reputation, appears to be finally making some strides in a positive direction. Grit and determination have pushed developers to make investments in a city completely devoid of hype.

Here is a roundup of the recent major developments in the city as well as some other proposed developments in the place that once labeled itself as "The Comeback City."

- Flats East Bank Project ($500 million)

The east bank of the Flats, bordering the Cuyahoga River and Lake Erie, was once nationally known as an entertainment hotspot of the Midwest, where riverfront bars and clubs served up thousands of beers every weekend. The days of spilled beer and late night boat parties are long gone, and a $500 million project twenty-five years in the making has finally yielded an 18-story, 450,000 square foot riverfront office tower together with three restaurants, a 150-room Aloft hotel, and a 1200-foot boardwalk, all opening this week. Big Four accounting firm Ernst & Young has relocated their de facto headquarters to the tower, which marks the first major office development in more than twenty years in the central business district.

The overwhelming leasing success of this development has emboldened its developer to fully launch Phase II of the Flats East Bank project, which adds 140 apartments and more retail space, creating a mixed-use, transit-oriented lakefront community from scratch in the heart of downtown.

Read more here: http://www.flatseast.com

- Global Center for Health Innovation and Convention Center ($465 million)

City leaders in 2004 proposed a development to capitalize upon the presence of the Cleveland Clinic and the hundreds of spinoff biotech and healthcare companies within the metro area. The project eventually morphed into a replacement of the city's antiquated downtown convention center with an absolutely unique 225,000 square foot underground convention center built on a slope fronting the lake with floor-to-ceiling windows and a grass ground-level park on the rooftop of the building. The development maintains the wide open space that was central to the original Group Plan designed by architect Daniel Burnham, famous for implementing urban plans like the Chicago Plan, the Civic Center of San Francisco, and completing the design of the National Mall of Washington, D.C.

This new project, finished ahead of schedule and under budget, had its ribbon cutting this month and is scheduled to hold conventions this year. The Global Center for Health Innovation has signed several permanent tenants to showcase new medical devices and processes to the healthcare industry, creating further reason for the healthcare industry to hold exhibitions in this complex.

Read more here:
http://www.clevcc.com/
http://www.theglobalcenter.com/
http://www.cleveland.com/architecture/index.ssf/2013/06/clevelands_new_convention_cent.html

- Downtown apartment market (completed and in process)

Cleveland's central business district is traditionally commuter-based, and no significant population has lived downtown for at least 75 years. Thanks to a growing hunger for urban living among young professionals, this tide is changing in a big way for Cleveland. Downtown population is soaring, up 100% over ten years and remains at near 100% occupancy with months-long waiting lists. Over 4,500 downtown rental units were occupied at the end of 2012, with 1,136 more scheduled to come online in the next 18 months. Downtown Cleveland has been a stand-in for New York City on several occasions in various movies, and offers an unusually urban environment for a city of its size. It is poised to capitalize on that strength to satisfy residential demand.

Read more here:
http://www.downtowncleveland.com/media/82160/q4_2012_final.pdf
http://www.crainscleveland.com/article/20130130/FREE/130139975
http://www.propertymanagementinsider.com/cleveland-apartment-occupancy.html

- Public Square and lakefront connection project (proposed - $360 million)

Thanks to a $90 million surplus resulting from the Convention Center coming in under budget, the city and county have partnered to redevelop the city's focal point, Public Square, into a world-class public space and link the central business district to the lakefront via a greenspace land bridge, after years of being severed from the water by a highway and a busy rail line. Part of the new proposal includes a $260 million, 600-room convention center hotel intended to serve the burgeoning demand for hotel space in the city center. Other funding allocations have been made to build a new public marina downtown and mixed-use development along the former Port of Cleveland space adjacent to the Cleveland Browns Stadium. The project will finally provide a long-awaited link between downtown and the lakefront, something that other successful coastal cities like Chicago and New York discovered years ago would spur development and increase desirability.

Read more here:
http://www.cleveland.com/business/index.ssf/2013/06/cuyahoga_county_cleveland_part.html
http://www.crainscleveland.com/article/20130605/FREE/130609932

More to come as developments materialize. We have only scratched the surface of the activity around the Cleveland area.