The Cleveland School Board have a meeting today at 6:30pm. I wonder will there be a discussion about the Nucleus Project. This project doesn’t seem like it’s going to happen. It’s been stalled for a very long time.  :( :-X

The Cleveland School Board have a meeting today at 6:30pm. I wonder will there be a discussion about the Nucleus Project. This project doesn’t seem like it’s going to happen. It’s been stalled for a very long time.  :( :-X

 

It definitely has NOT been "stalled".

The Cleveland School Board have a meeting today at 6:30pm. I wonder will there be a discussion about the Nucleus Project. This project doesn’t seem like it’s going to happen. It’s been stalled for a very long time.  :( :-X

 

It definitely has NOT been "stalled".

 

MGM Grand Las Vegas would put 125-2 odds on this project ever being completed.

The Cleveland School Board have a meeting today at 6:30pm. I wonder will there be a discussion about the Nucleus Project.

 

Was there?

^I didn't see NuCLEus mentioned in the agenda- maybe it shows up when they show the minutes.  They're available for public view- https://www.boarddocs.com/oh/cmsd/Board.nsf/Public

I don't believe the first evidence of a renewed TIF vote is simply going to appear out of nowhere in a school board agenda or board minutes without a fair amount of press coverage prior to any vote and perhaps more public meetings.

 

If you all recall, the TIF vote was pulled at the last minute after extensive review and public input when the board got wind of other negotiations Stark was conducting with other public entities about an "overall full funding plan" for the project and the board, quite wisely, wanted to be involved in the discussions.  Since late August I would imagine the major players have been meeting to formulate a plan that will incorporate different types of public subsidies from the city, county and school board and run these proposals past potential debt funding sources.  Such a process is going to be a slow go.

 

My best guess is that the first smoke signals of a detailed proposal relating to public subsidies will come from the city or county rather than the school board and that we will hear about it from Michelle well before any formal public discussions and/or votes occur.

The Cleveland School Board have a meeting today at 6:30pm. I wonder will there be a discussion about the Nucleus Project. This project doesn’t seem like it’s going to happen. It’s been stalled for a very long time.  :( :-X

 

It definitely has NOT been "stalled".

 

MGM Grand Las Vegas would put 125-2 odds on this project ever being completed.

What were the odds when it was announced?

^ I'll have to check with the Nevada Gaming Commission's records Dept... But 7-2

I was surprised yesterday to see a "Now Leasing" NuCLEus sign with a phone number, attached to the fence around the parking lot, along Prospect. Not sure if it's been there for a while but I usually don't walk down Prospect and rarely if ever on the South side of the street. Anybody want to call the number and try to rent a space?

I was surprised yesterday to see a "Now Leasing" NuCLEus sign with a phone number, attached to the fence around the parking lot, along Prospect. Not sure if it's been there for a while but I usually don't walk down Prospect and rarely if ever on the South side of the street. Anybody want to call the number and try to rent a space?

 

If we're talking about the same one... That's been there since 2015.

I remember signs for the project but not "now leasing." Could have been there all along though.

Crain's reporter Stan Bullard sounds pretty confident that nuCLEus will get its TIF approved and that construction will get underway...

http://www.crainscleveland.com/article/20171229/news/146846/stans-call-tax-overhaul-has-major-realty-implications

Great News  ;)

The building height seems to be changing again per Stan Bullard's reports. It started at 54 stories, shrank to 48 (leaving out the hotel?), shrank again to 45. Now Bullard calls it 49 stories.

Don't like the "don't hold your breath" section...

 

http://www.cleveland.com/metro/index.ssf/2018/01/whats_likely_to_come_from_clev.html#incart_river_home

Who is this reporter Robert Higgs? I'd rather hear mjarboe[/member]'s take on this. She and Stan Bullard have the most insights on the real estate market in Cleveland.

Thank you KJP, you calmed the shakes I was having from this article(or from the hangover).

Funny how opinions about the future can make people feel good or bad.

Bullard has no facts that he's basing his comments on.  Just anticipation.  For local real estate news, he's wrong more than he's right. 

 

The Nucleus project needs a lot more than some tax reform help to get built.  It's just too expensive to build and the rents don't justify the cost.  It doesn't pencil out.

It's interesting to see him say that the tax bill benefits urban development and apartments over suburban single family construction. I'd welcome that, but I'm not sure I buy it. As he says, $750,000 can get you a lot of house in NEO.

Bullard has no facts that he's basing his comments on.  Just anticipation.  For local real estate news, he's wrong more than he's right. 

 

The Nucleus project needs a lot more than some tax reform help to get built.  It's just too expensive to build and the rents don't justify the cost.  It doesn't pencil out.

 

Needs a large HQ as a tenant.

 

Needs a large HQ as a tenant.

 

So you would urge a complete change in its proposed tenant composition?

 

Needs a large HQ as a tenant.

 

So you would urge a complete change in its proposed tenant composition?

 

I think it has to be done if the project ever wants to get under way. They landed Benesch, a Live! entertainment group tenant, a brewery, and likely a hotel, none of these have cut it. You need a tenant that guarantees 8+ floors are locked in long term.

 

There are plenty of companies with 500+ employees in Cleveland who are unsure of their future re: their current locations...

Bullard has no facts that he's basing his comments on.  Just anticipation.  For local real estate news, he's wrong more than he's right. 

 

The Nucleus project needs a lot more than some tax reform help to get built.  It's just too expensive to build and the rents don't justify the cost.  It doesn't pencil out.

 

Needs a large HQ as a tenant.

 

This doesn't make any sense as 75% or more of the office space is already leased. 

 

Needs a large HQ as a tenant.

 

So you would urge a complete change in its proposed tenant composition?

 

I think it has to be done if the project ever wants to get under way. They landed Benesch, a Live! entertainment group tenant, a brewery, and likely a hotel, none of these have cut it. You need a tenant that guarantees 8+ floors are locked in long term.

 

There are plenty of companies with 500+ employees in Cleveland who are unsure of their future re: their current locations...

 

Stark is moving his HQ there too.  Besides that, the office component of this project is very minimal, so it's very unlikely that the lack of a large HQ tenant is the main factor for delays.  I agree with Gottaplan, the rental rates don't justify the cost of construction....yet.

How can you make a legally binding lease for a property that nobody knows when it's going to get built? Does Stark have some kind of provision where he pays for you to break existing leases?

I doubt they're leases. They're likely letters of intent.

I think gottaplan is spot on here.  The cost of construction is too high for Cleveland rents.  That doesn't necessarily mean that this project is doomed but a lot of subsidy is needed to make it work.  That is why the full TIF is crucial.

I met a guy on Monday afternoon at a New Year's party who is one of Mayor Jackson's top guys. Amongst the small chat, I casually asked about nuCLEus and the TIF and its chances of passing anytime soon. He was pretty noncommittal about saying anything, but mentioned something along the lines of that it's in the hands of the school board head to explain the deal to his people successfully.

 

He did comment on how Benesch is all in on the project and wants to be aligned with it as much as possible. Years ago, when the firm would bring in prospective employees, they'd house them out on 271 and wine and dine them out there. Now, young potential employees want to stay downtown ... and be entertained downtown. The company thinks their new HQ in the nuCLEus office building and the attached hotel, along with the retail/entertainment will be perfect for them and their growth efforts.

 

All in all, if I had to rate his positivity/negativity vibe about it moving forward anytime soon, I'd put it at about a 6/10, slightly toward the positive.

 

^great news but Benesch is already located on Public Square...  pretty good spot for retail/entertainment.  Steps away from East 4th.  Keep in mind, this is going to be a significant jump in rent for anyone.  Office rents at Nucleus are probably low to mid $30's per sf.  A good $6- $8/sf more than what they are probably paying now.  Add that up over the total square footage & its a big number.  not to mention the cost of the move, the buildout, etc.  This move will cost them millions

 

I think they will get the School Board to approve the TIF and it will still sit awhile until something dynamic changes in the investment/finance stack or the project makeup - perhaps more office, less hotel/retail, something. 

If you compare 200 Public Square to Flats East Bank's E & Y tower, they are worlds apart. The finishes and amenities and technological features of the E & Y tower are worlds apart vs. 200 PS. You put that kind of office environment in the mixed-use setting that Stark proposes for nuCLEus, then I can understand why Benesch feels that this will be a tremendous marketing tool to bring in top talent.

^The "finishes" and technology are typically tenant improvements, though. No reason a new build-out at 200 PS can't be pretty much just as nice as office space in a new tower. 

^The "finishes" and technology are typically tenant improvements, though. No reason a new build-out at 200 PS can't be pretty much just as nice as office space in a new tower. 

 

Since I haven't been in offices inside either E&Y or 200 PS, I'm referring more to the common areas including the attached uses such as the hotel, restaurants, etc. The atrium of 200 PS was quite a sight in 1985. It's dank and cold in 2018.

If you compare 200 Public Square to Flats East Bank's E & Y tower, they are worlds apart. The finishes and amenities and technological features of the E & Y tower are worlds apart vs. 200 PS. You put that kind of office environment in the mixed-use setting that Stark proposes for nuCLEus, then I can understand why Benesch feels that this will be a tremendous marketing tool to bring in top talent.

 

Agreed - the floor plans in 200 PS are old, the window lines suck, lots of columns, etc but there are decent amenities there and it's location is as good as anything.

 

Regardless, it's hard to quantify the value or "gain" from a move like that but it will definitely cost them millions more than staying put

I think they will get the School Board to approve the TIF and it will still sit awhile until something dynamic changes in the investment/finance stack or the project makeup - perhaps more office, less hotel/retail, something. 

 

Given we have a shortage in 21st century office towers, and that historic tax credits are disincentivizing new construction for apartments and hotels as long as we have dozens old office buildings to convert, you'd think more office space would be the ticket for NuCLEus, but maybe that just isn't what Stark wants to do... he wants this to be the hot spot to live/stay/play.

Given we have a shortage in 21st century office towers, and that historic tax credits are disincentivizing new construction for apartments and hotels as long as we have dozens old office buildings to convert, you'd think more office space would be the ticket for NuCLEus, but maybe that just isn't what Stark wants to do... he wants this to be the hot spot to live/stay/play.

 

Plus, the Class A vacancies downtown are dropping to near 10 percent, justifying significant new office space. But it may need to fall further to push rents up higher to where a new office tower can be afforded. Stark's proposed office usage of nuCLEus is less than 200,000 sf IIRC. At current absorption rates, that will only delay a new office building by a year or two. And even a new SW headquarters won't have much impact on the downtown office market if their old building is converted to apartments and the rumors are true that SW wants to be the only occupant of a new HQ tower (aside from ground-floor retailers/restaurants).

Had the great honor of meeting Michelle Jarboe today. I asked her what was going on with Nucleus, knowing if anyone had a decent idea as to what's going on here, it'd be her. Her impression is that its not the city or schools holding this up right now, but squarely the County.

^ The county doesn't have any decision authority on the TIF. 

^Isn't Stark looking for other types of government subsides from the county to go along with the TIF?  Didn't the school board step back from the TIF because it heard Stark was trying to negotiate a package with the county and it thought that all sides should be at the table to see exactly what subsidies were being offered and how they would work together?

it might be too big of a bite for the county maybe.  It is one thing to give away future revenue than it is  to give away current money.

Stark could always try to build in phases since he supposedly has tenants lined up. As someone who always wants to see this town move forward in a positive direction, it's frustrating to see all this potential just stagnate.

sorry, sorry no news, but i just noticed the lead render on the website is so...far off. :(

 

http://www.starkenterprises.com/properties/nucleus/

i almost feel bad posting here because I have only questions, but that's what this forum is for  - anyway, I'm just wondering about the "ongoing quiet" surrounding the game-changing Nucleus project.  Some recent posts suggested that even if the  Cleveland Schools voted yes that there was still a "county issue" that could derail the project. I assume that's another part of the financing equation...Is Nucleus, in its current projected form,  just impossible financially in Cleveland and is it just because office rates are lower in "The Land" then all those other mid- market cities that have constructed major towers in the last few years?  How do cities like Cincinnati, Baltimore, Milwaukee and Pittsburgh all erect major new towers in the last few years? Is Cleveland's market value just different than even these "non-glamour" locations?  (I know Pittsburgh had PNC behind their 564 feet high tower.)

It feels like Cleveland greatly needs a project of Nucleus'  magnitude to continue its momentum as a 21st century major American city. I acknowledge the cool "Beacon" project as well as the hopefully soon-to-follow PS Tower.  But Nucleus would be that iconic tower that would change the look of downtown. Do the Forum insiders think this project still has its heartbeat? 

^Yes.

 

Projects of this scope can take time. This project includes retail, apartments (maybe condos?), new Class A office space...at a cost of half-a-billion dollars.

 

Rents downtown still don't justify the price, and downtown renters are beginning to be price conscious which doesn't help with financing new build construction. Added to that, i believe the cost of building new has gone up. Correct me if I'm wrong, but not too long ago rents at $2.00 per sqft could justify a new tower, no? I believe we're either there or have passed that point already. If rents were higher downtown I'm sure we'd be seeing a lot more new construction.

 

Hopefully those days are coming soon, as Class C office space continues to disappear.

^Cleveland has built Ernst and Young 330', Hilton 380', One University Circle 234' all within the last 4 years.  Not to mention the countless residential conversions downtown, and the under construction Beacon 338'.  In Cleveland's hot neighborhoods, there is a lot of infill happening, and the residential conversions downtown have made building new more of a reality since that real estate has been spoken for.  I just got back from Cincinnati not that long ago, and Cleveland seems to have a lot more momentum than Cincy building taller buildings.  I am sure people get tired of hearing it just as much as people who say it, but these big projects take time.  Milwaukee, a city I frequent quite often is building several new towers, but they have be devoid of a decent skyline for quite some time.  But outside of the Northwestern Mutual tower, they're right on par with Cleveland.  Couture in Milwaukee has stalled out for the time being.  Pittsburgh really only had PNC and 3 PNC go up in the last 9 years.  So let's just assume Playhouse Square starts some time in 2018 and the CPS votes in favor of NuCLEus and that can start in 2019; I would say outside of Chicago, Cleveland and Milwaukee are building the most over 200'.

^ don't forget rising interest rates which will increase the cost of the project.

Joe Marinucci , President & CEO of D.C.A. said tonight on TV 25 Ideas program that Stark's NUCLEUS is in the final stage of funding the project!!

REALLY???

Joe Marinucci , President & CEO of D.C.A. said tonight on TV 25 Ideas program that Stark's NUCLEUS is in the final stage of funding the project!!

 

Is this one of your sick jokes?

But isn't that where Stark has been for the past six months?