The
past 10 years has seen a remarkable turn around for downtown Cleveland. The
city’s downtown core and inner ring suburbs have been home to an impressive
alliance of public and private entities that has successfully encouraged new
development in locations that were previously overlooked as viable investment
options.These completed developments are now paying dividends to the community, with increased occupancy rates, an influx of highly educated young workers, revitalized interest in living, working, and shopping downtown, and encouraging the construction of new developments. The Flats East Bank project is one of these catalytic development projects that helped further Cleveland’s economic comeback.
The
initial investment of approximately $275 million for the construction of the first
phase of the Flats provided a significant economic impact to Northeast Ohio. New
orders for building materials and the thousands of man-hours worked by union
laborers meant the project was a windfall to construction materials manufacturers
and construction workers—two groups that were hit hard by the effects of the
2008 Financial Crisis.
Additionally,
the construction of the new office tower allowed for Cleveland to keep Ernst
& Young’s Regional Headquarters as a downtown tenant. At the same time that
the Flats project was being planned, E&Y realized that it had outgrown its
previous downtown offices and was looking to move into newer and more efficient
facilities; a move that likely would have resulted in E&Y leaving Cleveland
for another location. However, the developers of the Flats were able to
incorporate everything E&Y needed in its new space, allowing the company to
maintain its Regional Headquarters—and associated jobs—in Cleveland.
Beyond
the immediate benefits of the Flats, long-term benefits of the project continue
to ripple through the local economy. As the first new, large-scale mixed use
development in Cleveland in several decades, the project has helped to improve
the image of downtown Cleveland, drawing new people to the area – including new
office tenants, residents, and visitors.
This has had the effect of dramatically improving the available office
stock in downtown, which is illustrated by the vacancy rates of office space in
Cleveland’s core. Overall rates have dropped from 23% in mid 2011 to 18.4% by
the first quarter of 2015 and—for Class A office space specifically—to a level
of 15.1% vacancy*.
We
at CiF are pleased to have played an important part in the Flats East Bank, given
the project’s positive impact on the growth of our region.
*
Vacancy rates drawn from DCA Quarterly Market Update Reports
