Severance Center: Frustrations, Hopes & Possibilities

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The question that every Cleveland Heights candidate—both for Mayor and City Council—will get asked over and over again is: 

“What will you do about Severance Center?”

And because I like truthful answers, no matter how messy they may be, I’m here to tell you that it’s complicated. BUT . . . with a nimble and resourceful strategy, truly inclusive community engagement, and leadership ready to forge forward, we CAN lay out a plan to create a thriving town center to serve our needs for decades to come.

But first, let’s change the question: “HOW will we do something with Severance?”

A Quick History

We once had high hopes that Severance Center would become a financial magnet for the region, and deservedly so—it is a big space, full of potential, nestled within a densely populated area, with over 141,000 residents in its three-mile radius. But, as we know, over time those hopes fizzled, despite the city investing in expanding the surrounding streets to make room for increased traffic from neighboring cities. 

After the property was purchased in 2003 for $55 million, in 2016 the present owners bought it for only $10.5 million—in cash—at a county auction after the previous owner defaulted on their mortgage and the property went into foreclosure. And although the Cleveland Heights government was hopeful that the new owner, Namdar Realty, based in New York, would be open to renovating the property, the real estate management firm has been unwilling to invest in revitalizing it or to sell it so that the city can find someone who will.

Who Is Namdar Realty and What Are They Like?

Namdar Realty owns over 130 retail properties (and even more mixed-use, commercial, and residential), and they are constantly acquiring more, always on the lookout for rental properties in or near foreclosure that they can buy cheaply. They invest as little as possible in maintaining their properties. They do not appear to be interested in capital investments that renovate and modernize. Most of their properties are outdated and incompatible with changing community preferences and needs.

It is safe to conclude that as long as Namdar is getting more money from Severance Center than it is paying to hold onto it (taxes, fees, etc.), they’re likely not going to do anything with it besides sell it piecemeal to others. For example, in 2017 Namdar offered the Home Depot site for sale for $15 million after securing a 15-year ground-lease arrangement with Home Depot. And in February of 2020, “SRS Real Estate Partners secured a $9.59 million loan on behalf of a private investor for the ground lease acquisition of a property occupied by Home Depot.” 

While some real estate investors do buy large properties and then sell off parcels when leases and incomes make them more appealing to other investors, the result for Cleveland Heights is more stakeholders, more obstacles, and more complications in moving forward with a cohesive vision for Severance and its future development.

Step One: Make It Possible to Develop Severance

We can talk about what we would like to see happen there. We can (and should!) conduct surveys and hold town halls to gather the public’s ideas and preferences. We can put valuable resources into RFPs (like the one issued in June 2019) and then devote many hours weighing the merits of different developers and their proposals. But if Namdar is unwilling to work with us or to sell it, then all we’re doing is getting people’s hopes up and throwing good money after bad.

In fact, Cleveland Heights’ own report acknowledges that proceeding with development while Namdar is the owner will be challenging at best. In a September 2017 report, “Severance Town Center: Redevelopment Feasibility and Owner Engagement,” commissioned by the city, the firm HR&A reached out to Voorhees Township, New Jersey, which was trying to redevelop a similar site also owned by Namdar. They told HR&A that “working with Namdar was ‘fine’; however, occasionally disengaged.” Similar to Cleveland Heights, “Regardless of the City’s ownership, or the level of interaction with Namdar, [Voorhees Township] has moved forward with an RFP for redevelopment of the site that Namdar owns.” This report went on to advise that “Cleveland Heights secure site control before advancing and redevelopment efforts at Severance.”

The first step, then, is to work with our legal team and come up with a range of options to get truly cooperative (preferably enthusiastic) movement from Namdar—everything from the carrot to the stick. 

For instance, for the carrot, we might offer tax abatements in exchange for allowing development to be done in a way in which we lead concept and design execution while ensuring they negotiate a mutually beneficial long-term lease agreement with the developer we choose. 

For the stick, there are many ways we can make holding onto and doing nothing with the property to be more expensive and troublesome than working with us to improve it or selling it, such as, but not limited to:

  • pursue every possible fine and action for maintenance issues of both the buildings and the parking lots, 
  • conduct fire marshal and police safety inspections and leave no violation uncited, and 
  • encourage Council to develop a vacant property bond (stronger than the one we have, which only applies to those in a foreclosure action), particularly for larger and/or out-of-county commercial landlords, that might do more to compel Namdar to action.

But the bottom line is that, first and foremost, Namdar needs to be willing either to work with us in good faith or to sell the property so it can be developed.

Step Two: Develop a Clear Direction Through Deep Community Engagement

Once we can realistically see the possibility of redevelopment on the horizon, then we will create a process to gather input from our community, in particular nearby (one-mile radius) residents as well as businesses—both in Severance and in the surrounding area. From there, we will put together a focused RFP (Request for Proposal) that reflects what the community needs, what is best for our local economy—both now and in the coming decades—and aligns with our city’s Master Plan and our commitment to sustainability.

Create a Town Center That Serves the Community We Have, Not the One We Wish For

If you’ve watched any of the presentations by potential developers for other sites, you may have noticed a trend: proposals designed to attract new and different residents. On the one hand, it is true that our population has been slowly declining over recent years and that this trend needs to be reversed. On the other hand, I believe that if we proceed with a deep focus on serving the people who are here now, then new residents will come.

I agree that a mixed-use development best suits our city, but when it’s time to compose our RFP, let’s get more specific so our potential developers can better meet our needs. For instance, we know we want more single-story residences for our seniors who would like to age in place, but would they prefer to rent or buy when it’s time to downsize? (Many developers’ plans for other local projects propose luxury rental apartments, but I imagine that many people preparing to downsize would prefer to use their current equity to purchase a smaller home for which they would have little or no monthly payment.) 

In addition, in our city’s Master Plan, we have made a commitment to sustainability, and it’s time we made good on that promise. In addition to requiring all development proposals to meet LEED standards and include ample green space, we can also request that all new construction include renewable energy technology in its design, such as solar panels and small (and sometimes beautiful) wind turbines. Renewable energy is the future—this is inevitable. Knowing this, we should be building in a way that is forward-thinking so that later we don’t need to spend more money to retrofit what we’re building now.

And if we have a sense BEFORE issuing the RFP of the kinds of businesses surrounding residents hope to see at Severance, that can help determine the overall design. 

We need to conduct deep community engagement to find out what people want and would use: 

  • What are the businesses you go to a lot? 
  • What are you driving outside Cleveland Heights to get? 
  • What do you wish you had right here for you and your family?
Work Thoughtfully with Our Local Businesses

It’s crucial that we include in the discussion the present tenants to ensure that our development efforts work for them—particularly the larger businesses in and surrounding the Namdar property. Given that MetroHealth, Dave’s Supermarket, and Home Depot ranked as 4th, 7th, and 9th, respectively, in the Cleveland Heights 2019 Comprehensive Annual Financial Report’s list of top employers in the city, we need to make sure that development proceeds in a way that minimizes disruption and offers a compelling vision of future growth for them.

Further, as we work to attract businesses to fill the retail spaces we’re creating, we should also reach out to our city’s business community so we can prioritize local businesses that are ready for expansion and help pave a pathway for local entrepreneurs with plans that would fit perfectly with our vision for Severance Center.

Step Three: Where There’s a Will, There’s a Way

I’m betting that every candidate for office will make getting the Severance redevelopment FINALLY done as a key part of their platform, and in that way I am no different. I’m sure every candidate clearly sees that voters are ready to hold our city leadership accountable in moving forward.

The question for candidates, then, is not “Will you do something about Severance?” but rather “HOW will you develop Severance?”

  • How will we get Namdar to work with us? 
  • How will we engage the surrounding community and get meaningful input so we can develop the property wisely? 
  • How will we guide potential developers to make sure they propose options that meet our community’s values, needs, and commitments? 
  • And how will we ensure that the completed development is managed in the long term in a way that supports our community’s goals?

These are the kinds of questions that I will bring to the table when moving forward with Severance. And I know this is not the easy answer that many voters want to hear, but developing Severance—and doing it RIGHT for Cleveland Heights—won’t be easy. But if we’re not afraid to have the hard conversations, then when it does get done, it WILL be good.