Project Partners

Value Recovery Group, Allegro Realty Advisors, Hull & Associates Inc, Performance Site Management

Background

VRP North Coast, LLC, which includes as its members the affiliate of Archetype, Value Recovery Group (VRG), serves as the asset manager of the largest shovel-ready industrial site in the City of Cleveland in well over a half century. The site is configured to accommodate a 750,000 square foot manufacturing site that could attract 750 to 1,000 new jobs. The property is owned by the Greater Cleveland Community Improvement Corporation (GCCIC), a nonprofit entity with a three-member Board of Trustees, and which was established to facilitate public-private partnerships to undertake land development within in the City of Cleveland. The day-to-day operations of the project and site development has been managed by Managing Member VRG and its teaming partners, Allegro Realty Advisors, Hull & Associates, and Performance Site Management which comprise VRP North Coast, LLC.

In 2006, the City of Cleveland (City) awarded VRP North Coast to serve as a commercial and industrial land manager through a qualified RFP process with the objective being to acquire, clean up, clear title and other contingencies and then liquidate and/or develop properties throughout the city. A “community improvement corporation” was created under the Ohio Revised Code §1724. This governance structure was an ideal vehicle because it enabled a public-private partnership that served four objectives: 1) it provided the framework for Board Members entrusted to addressing public objectives while delegating its day-to-day activities to a professional, private sector entity; 2) it put into place a governance structure that allowed the entity to enter into indemnification agreements with sellers with the financial support of insurance products; 3) it allowed the sellers to share confidential information about properties without being subject to public records disclosure laws; and 4) it encouraged private sector expertise, by allowing private sector partners to invest time, money, and other resources into a project. Public funding was secured for the project in 2009, and the GCCIC was formed, the Board of Trustees were selected, and the operation commenced.

VRG and Allegro completed the land assemblage to create the site. However, the site suffered from a dramatic disparity in grade relative to all reasonable points of ingress and egress. Purchasing material (25,000 truckloads) to level the site would have had a deleterious effect on the economic viability of the site. The team created a plan that not only eliminated the potential cost, but also created a potential revenue stream to fund other work on the site. By transferring dredge spoils removed at nearby Burke Lakefront Airport to the site, the team was able to raise the elevation of the site, while at the same time developing a unique source of revenue that could be added to the project, and create much needed capacity for dredge materials from the harbor and the Cuyahoga River. This required working relationships with the US Army Corps of Engineers, the Cleveland Cuyahoga County Port Authority, the City of Cleveland, and the Ohio EPA to coordinate material analysis, transport of material, placement of material, and funding of these activities. The result was a stable site with conditions compliant to Ohio EPA standards. In total, the project required approximately $12 million in capital improvements that VRG and Allegro sourced from the State of Ohio, City of Cleveland, and private investment.

The site is located in the heart of Cleveland’s industrial valley, located adjacent to I-77 with a ¾ mile highway frontage between the Pershing Avenue and Fleet Avenue exits. The site offers 64 acres, high capacity utilities, road improvements and short line rail access to Class 1 lines. The site leverages the surrounding transportation infrastructure and industrial buildings and sites that could eventually provide up to 750 new jobs in the City of Cleveland.

Challenges & Solutions

  • Recommended the non-profit structure and guided the City on the undertaking of this large and challenging project

  • Real estate site analysis and selection for economic development purposes

  • Developed budgets and tracked expenses for project management

  • Wrote grants, obtained loans, and sought development contribution by public and private entities to demonstrate an aligned effort among stakeholders in site development

  • Managed the operational and financial activities of the non-profit board as the asset manager

  • Provided the accounting services for the GCCIC entity and the project

  • Managed the sub-contractors and payment requests

  • Developed RFPs for certain bid construction work and coordinated selection of contractors with the GCCIC Board

  • Monitored compliance of many facets of the project including MBE and SBE requirements, environmental reviews, storm water plans, and various matters for grant compliance

  • Developed a material management plan for the site with approval by the Ohio EPA; 1.2 million cubic yards of material was placed on the site.

  • Developed the deconstruction plan for the site

  • Developed  the grading plan, building site plan, rail siding plan, and infrastructure plan

  • Coordinated the acquisition, excavation, transport and placement of 300,000 cubic yards of dredge materials with the US Army Corps of Engineers, Port Authority, and City of Cleveland

  • Coordinated the obtaining of permits, developing and securing construction drawing approvals, attending hearings, presenting plans, and obtaining final approvals with City of Cleveland departments

  • Coordination with the City, regional sewer district, and Ohio EPA to fill over a box culvert storm water pipe up to 40 feet requiring engineering studies and tests

  • Oversaw the design and construction of two road access points into the site, including all utilities

  • Negotiated acquisition of a private road and obtained funding for improvement with the end result of public dedication of the road as a public access point

  • Board assistance in developing agendas, producing Board meeting minutes, providing a documents storage system, and drafting letters and resolutions

  • Managed the complex title work of this 100+ year site

  • Development of all marketing materials for the site, including a brochure, email distributions, web site page creation, advertising in trade magazines, renderings of the site, and development of press releases

  • Follow-up with site inquiries and prospective purchasers  

Summary & Results

In summary, the site that we created is the largest assembled, shovel-ready industrial site in the City of Cleveland. Prior to its creation, the site was operated as a heavy industrial plant by Republic Steel until its closure and demolition in the late 1980s. Since the plant demolition in the 1980s, the site remained vacant due to the environmental and topographical issues it faced, occasionally used for slag disposal by the steel company. In essence – the site was economically, financially, and socially unproductive for over 20 years. Our completing the site remediation and development, set the stage for new development, for the addition of 750,000 square feet of new manufacturing space and approximately 750 to 1,000 new jobs. This site fully developed should annually contribute an additional $750,000 for the City of Cleveland and $1.9 million for the State of Ohio in new income taxes, and generate approximately $2.1 million in annual property taxes for Cuyahoga County. Furthermore, this project will spur additional industrial development.