Big changes are afoot at City View Center, a 60-acre failed shopping center that’s been one of Northeast Ohio’s biggest real estate headaches for more than a decade.
Construction workers are stripping decorative facades off long-vacant stores, readying the former Dick’s Sporting Goods, OfficeMax and Walmart boxes for new life. Signs and leasing flyers promote the property as Highland Park, a business park being pitched to light industrial tenants, technology companies and offices.
Industrial Commercial Properties LLC of Solon hopes to acquire City View before the end of the year, in a transaction that will resolve an 11-year-old foreclosure case. Renderings of the reimagined project show renovated buildings with a more muted palette and grassy lawns and sidewalks in place of the parking lot’s rippled driving lanes.
On Sept. 30, the court-appointed receiver who has controlled the property since 2009 asked a federal judge to sign off on an auction that’s likely to occur in mid-November.
ICP, the holder of a $132 million note on City View through a joint venture with attorney and real estate investor George Simon, is the obvious bidder.
A prolific redeveloper of troubled buildings, ICP formally stepped into the lender’s shoes at City View in April. Owner Chris Semarjian still won’t say much publicly about his vision or his talks with potential tenants, though he acknowledges that the company is sprucing up the site, just off Transportation Boulevard near Interstate 480.
“We’re protecting our asset,” he said during a recent meeting at ICP’s headquarters.
But Semarjian is direct about a few things.
First, he’s certain that the buildings are solid. The undulating parking lot around them is the result of more than a decade of deferred maintenance and settling since City View opened in 2006 on former municipal landfills. And that’s fixable, Semarjian said.
Second, speaking of the landfills, ICP and its consultants haven’t detected methane in the buildings, according to documents filed with the Ohio Environmental Protection Agency. The company has spent much of this year working with environmental consultant and attorney Todd Davis and the Ohio EPA to understand the site, its history and any red flags.
“The two biggest misconceptions … are that the buildings are falling down the hill and that they are full of gas,” Semarjian said. “And that’s not true.”
On Sept. 29, the state EPA and an ICP affiliate signed a legal agreement that will let the developer take control of monitoring and gas-extraction systems for the property. The deal was a key step on ICP’s path from lienholder to landowner and eventual redeveloper of the project.
“It was important for our team to spend a little bit more time and more money to make sure that this plan was very robust and met all the requirements of the Ohio EPA,” said Chris Salata, ICP’s chief operating officer.
In an email, an EPA spokeswoman wrote that the agreement, along with a document that outlines how ICP expects to run and maintain the systems, “are put into place to ensure the operations at the site are protective of human health and the environment.” She confirmed that the agency has deemed ICP’s plans “acceptable.”
Davis said that ICP also hopes to take City View through the Voluntary Action Program, which involves environmental analysis and cleanup, if necessary. That process results in legal protections for property owners who satisfy the EPA’s standards.
“That’s how you address the stigma,” Davis said of taking on a property with substantial reputational baggage. “You do it with good people, good science.”
City View started losing retailers soon after it opened, as the original developer tangled with the EPA and one store closure triggered another.
A once-promised road project, to extend Transportation Boulevard south to Rockside Road and open up adjacent land for development, never materialized. As the Great Recession deepened, high-profile retail sites on both sides of I-480 in Garfield Heights ended up in court, as the subjects of messy foreclosure litigation.
The only remaining businesses at City View, which spans more than 500,000 square feet and has room for additional construction, are a Giant Eagle supermarket and Applebee’s.
A company tied to Simon purchased the distressed debt on City View in 2017, five years after a judge ruled on the foreclosure. Simon still won’t say what he paid. At auction, he and ICP will be able to credit bid, offering as much as the value of their note without having to provide cash.
The prospect of a business park thrills Garfield Heights Mayor Vic Collova, who has been grappling with City View since he took office in late 2009.
“The amount of jobs that this will create, the additional tax dollars coming to the city is really huge, no question about it,” he said of ICP’s plans. “This is just the beginning. … This is something really big, and we couldn’t be happier to be a part of it.”
The Highland Park proposal is reviving conversations about connecting Transportation Boulevard to Rockside, less than a mile away. Those talks are preliminary, and it’s too early to put a firm budget or timeline on such a project, said Vince Adamus, vice president of real estate and business growth services for the Greater Cleveland Partnership.
“There hasn’t been a demonstrated need prior to this,” Adamus said. “Now … Highland Park is in the hands of an owner that has the capacity not only to fill the existing site but also to do additional development there. So now it makes sense to look at the expansion.”
He said the partnership is talking up the site to potential occupants. In the third quarter, industrial vacancy in the region was 5.4%, according to the Newmark Knight Frank brokerage.
“Something we don’t have enough of is land and clean buildings to meet the demand for industrial space,” Adamus said, adding that the property’s location near densely populated residential areas also makes it compelling from a workforce development perspective.
Real estate brokers said ICP, which has refashioned former automotive plants as multi-tenant projects and has taken on other sites with tangled histories, is well-situated to succeed.
“Semarjian buys things off of Ford and GM,” said Rico Pietro, a principal with Cushman & Wakefield/Cresco Real Estate in Independence.
“I think he’s got a real nice property there,” Pietro added.