Just wondering what everyone is thinking about how covid will affect downtown Cleveland. 
 

Will things go back to normal?

 

Will companies shift to full time work from home leaving office space vacant, and restaurants without customers which will cause further retail vacancy. 

 

Will downtown living become more attractive or less? (This could be linked to the office market)

 

How long till the FieldHouse, Playhouse Square, and other venues are back up to full capacity? Can restaurants survive until that happens or will we see several closures?

 

One thing I was thinking the other day was Heinens. Will the downtown location survive this?

 

There are so many potential outcomes and problems can easily snowball. Just wanted to get an idea of what everyone else thinks might happen. 

PHS is my biggest concern... most of those restaurants were set up to be intimate places to dine/drink before a show, and not at all conducive to social distancing. Moreover, 70%+ of their business was before or after shows

I'm not sure how many offices are returning to normal any time soon. I'm doing WFH for the foreseeable future. And most of olmy friends are too. This will affect many facets of the economy.  

I'm imagining working in a high-rise, where you have to take an elevator, and the ability to social-distance.

Who knows how it will shake out long-term, but the general consensus is that this won’t derail the urbanization trend on a global basis. Locally, it will play out differently in different cities. I agree that PHS is possibly the most sensitive issue, but the foundation has been found to be focused on the long term and persistent, so that’s a good thing. 
 

In terms of WFH, all I’ll say is that I reverse commute and so do many downtown residents (the stats are out there somewhere). My WFH is a net gain for downtown and a loss for the exurb. 

Edited May 20, 20205 yr by roman totale XVII

9 minutes ago, roman totale XVII said:

Who knows how it will shake out long-term, but the general consensus is that this won’t derail the urbanization trend on a global basis. Locally, it will play out differently in different cities. I agree that PHS is possibly the most sensitive issue, but the foundation has been found to be focused on the long term and persistent, so that’s a good thing. 
 

In terms of WFH, all I’ll say is that I reverse commute and so do many downtown residents (the stats are out there somewhere). My WFH is a net gain for downtown and a loss for the exurb. 

 

I'm in the same situation. My WFH currently benefits the city as well. It's amazing how many people forget the affects of reverse commuting and how it has amplified in recent years.

Edited May 20, 20205 yr by Clefan98

13 minutes ago, bjk said:

I'm imagining working in a high-rise, where you have to take an elevator, and the ability to social-distance.

 

I used to work in an office building in Middleburg Hts that had elevators too. Roughly only half of our employees would've had the ability to walk up 5 flights of stairs and make it to our office safely.

 

So I don't see this is as solely being a high rise issue.

Edited May 20, 20205 yr by Clefan98

My prediction in the long term is that companies will end up giving their employees more flexibility to work from home, but by and large it won’t move to telework.
 

I’ve seen articles about employee surveys stating they miss going into the office, seeing coworkers and friends, etc. I think long term it would be detrimental to moral to abolish the office for good.

39 minutes ago, freefourur said:

I'm not sure how many offices are returning to normal any time soon. I'm doing WFH for the foreseeable future. And most of olmy friends are too. This will affect many facets of the economy.  

 

I'm actually going to start going back to the office 1-2 days a week following Memorial Day. 

 

I work on the 22nd floor. But I've got it mapped out for now... Enter with mask, and I have a napkin in hand which I use to open doors and push the elevator button... My firm has a garbage can in our lobby where I'll dispose of the napkin... Once in my office, I'll close the door, wipe down my desk and keyboard with a clorox wipe, then remove my mask. 

 

I won't eat at the office and I'll only drink from my screw-on-lid Yeti that I'll prepare at home. 

 

Tbh, I just need a mental break from the monotony of home, and I also need to be more productive, which is much easier with three screens and a full desk. 

4 minutes ago, Enginerd said:

My prediction in the long term is that companies will end up giving their employees more flexibility to work from home, but by and large it won’t move to telework.
 

I’ve seen articles about employee surveys stating they miss going into the office, seeing coworkers and friends, etc. I think long term it would be detrimental to moral to abolish the office for good.

I hope so. I believe a switch to full time work from home changes the tax structure and employees would then be viewed as working in their home city, and paying taxes to that city as well. That would be devastating to the city of Cleveland. 

4 minutes ago, JSC216 said:

I hope so. I believe a switch to full time work from home changes the tax structure and employees would then be viewed as working in their home city, and paying taxes to that city as well. That would be devastating to the city of Cleveland. 

It would depend if the company they work for doesn't have their office location and company address in downtown as well. If they keep their company address in the city but allow employees more flexibility to work from home, taxes would still be paid to the city.

5 minutes ago, WindyBuckeye said:

It would depend if the company they work for doesn't have their office location and company address in downtown as well. If they keep their company address in the city but allow employees more flexibility to work from home, taxes would still be paid to the city.

From my experiences and with people I know when you work partially from home you still pay taxes to the city the office is located. But when you work full time from home you pay taxes to your home city, even if a physical office still exists elsewhere were you do not have a desk. This doesn’t apply to temporary situation like we are in now but if companies decide to downsize their square footage and have some employees work from home full time I believe that those employees will begin paying their home city. 

^Correct. If you work from home more than 12 days a year, you can file for a refund from the city where your office is located to get back the income tax withheld when you worked from home.

 

If someone works for a company in Cleveland, but works a significant part of their time from a home in a suburb with a lower or no income tax, they will be motivated to file for a refund from Cleveland.

 

Conversely, if they work for a company located in a community with an income tax, but work from home in Cleveland, they'll be less likely to ask the suburban community for a refund because they'd just have to turn around and pay the amount to Cleveland because the Cleveland rate is higher.

 

 

WFH may be relevant if a lease renewal is near, which is not the case for most companies. So they are stuck with a x years left on a 10-year lease--WFH means a companies is stuck with empty office space unless they can sublease it. So there's no financial benefit for a company to let everyone WFH full time. They may let employees do a few days/week maybe, but ultimately i think the office life will return. As the gig economy grows, we'll see more WFH as that has been a growing trend pre-COVID--and that trend won't change.

 

 

 

29 minutes ago, JSC216 said:

I hope so. I believe a switch to full time work from home changes the tax structure and employees would then be viewed as working in their home city, and paying taxes to that city as well. That would be devastating to the city of Cleveland. 

 

You're forgetting how many people now live in the city and WFH. My local taxes used to go Middleburg Hts but I've been placed on WFH status permanently so payroll changed my locality taxes to Cleveland. 

 

Also downtown Cleveland has a very small % of office workers in region. Something to think about...

Edited May 20, 20205 yr by Clefan98

I'll add that since this all started Heinen's has been consistently busy nearly every time I am there- and that is often... multiple times a week.  It seems to me they are doing fine.  The only hit I am sure they have taken is the lunch crowd and events upstairs.

10 minutes ago, Clefan98 said:

 

You're forgetting how many people now live in the city and WFH. My local taxes used to go Middleburg Hts but I've been placed on WFH status permanently so payroll changed my locality taxes to Cleveland. 

 

They shouldn't have switched that already. The legislature passed a law that requires payroll tax go the office location during and 30 days after the stay at home orders end.

24 minutes ago, JSC216 said:

From my experiences and with people I know when you work partially from home you still pay taxes to the city the office is located. But when you work full time from home you pay taxes to your home city, even if a physical office still exists elsewhere were you do not have a desk. This doesn’t apply to temporary situation like we are in now but if companies decide to downsize their square footage and have some employees work from home full time I believe that those employees will begin paying their home city. 

Good points. Yeah wait and see how much changes.

5 minutes ago, mrclifton88 said:

I'll add that since this all started Heinen's has been consistently busy nearly every time I am there- and that is often... multiple times a week.  It seems to me they are doing fine.  The only hit I am sure they have taken is the lunch crowd and events upstairs.

 

Agreed, we do our weekly shopping there and it's been slammed on Sunday/Saturday mornings.

10 minutes ago, Clefan98 said:

 

You're forgetting how many people now live in the city and WFH. My local taxes used to go Middleburg Hts but I've been placed on WFH status permanently so payroll changed my locality taxes to Cleveland. 

 

Also downtown Cleveland has a very small % of office workers in region. Something to think about...

 

87 percent of Cleveland's income tax revenues are paid by people living outside the city of Cleveland.

 

While about 15 percent of total employment in either Cuyahoga County or Greater Cleveland (I forget which) works in downtown Cleveland, nearly half (estimate varies from brokerage to brokerage) of all office space in Greater Cleveland is downtown. So it would stand to reason that roughly half of all office employment in for-rent office spaces is downtown. That doesn't take into account offices in government buildings, adjoining factories or in hospitals/medical centers, etc.

8 minutes ago, ink said:

 

They shouldn't have switched that already. The legislature passed a law that requires payroll tax go the office location during and 30 days after the stay at home orders end.

 

That would normally be true but since I am WFH on a permanent basis now, they were able to make the switch immediately. 

4 minutes ago, Clefan98 said:

 

That would normally be true but since I am WFH on a permanent basis now, they were able to make the switch immediately. 

 

was your switch to WFH permanently related to COVID-19 or just coincidental timewise?

18 minutes ago, KJP said:

 

87 percent of Cleveland's income tax revenues are paid by people living outside the city of Cleveland.

 

While about 15 percent of total employment in either Cuyahoga County or Greater Cleveland (I forget which) works in downtown Cleveland, nearly half (estimate varies from brokerage to brokerage) of all office space in Greater Cleveland is downtown. So it would stand to reason that roughly half of all office employment in for-rent office spaces is downtown. That doesn't take into account offices in government buildings, adjoining factories or in hospitals/medical centers, etc.

 

I can't find the stats by occupation, but only about 7.3% of the metro's workforce is located downtown. Only 1.8% of people living downtown also work downtown. 

 

Source:

http://www.downtowncleveland.com/DCA/media/DCA_Media/2018-Housing-Demand-Analysis.pdf

 

The reverse commute # is larger than people think, and the 87% figure was taken from 2015-2016.

We know there's been a lot of affluent newcomers who've recently moved into downtown, OC and UC in the last 3-4 years. I bet that 87% has gone down some.

 

 

 

Edited May 20, 20205 yr by Clefan98

10 minutes ago, Pugu said:

 

was your switch to WFH permanently related to COVID-19 or just coincidental timewise?

 

We were closing that office anyways however COVID sped up the timeline.

Edited May 20, 20205 yr by Clefan98

^Thanks. That proves my earlier point above. Companies not at the lease renewal point cannot just decide to go WFH---as they are stuck in a long-term lease.

My company (downtown office) sent out a survey last week asking for a employees desire to permanently work from home. As far as I know the physical office is not going anywhere and the input was needed to plan for retooling the floors to allow for more distance between employees i.e. everyone not on top of each other. It was a simple yes/no (no from me) but my boss was telling me there might be an option in the future for split time between office and WFH.

^ my employer is doing the same thing. They are determining who needs to report to the office. I dont know if WFH will become permanent.  But it will remain for the foreseeable future. 

SHW's employees are heading back to their offices in June.

 Every project downtown built on the previous development. One led to another; a virtuous cycle. Same with people moving downtown - more people moving there led to more people wanting to move there. Short term covid 19 is slowing the momentum that downtown was experiencing. Projects are being delayed, downsized or cancelled. Same for individuals planning on moving downtown. Many will think twice and delay/cancel the move.  Many, many segments are being hurt by this. WFH will increase but it won't replace the office. Business and leisure travel will be impacted leading to a pretty significant decrease in hotel occupancy along with a corresponding decrease in people eating in downtown restaurants and attending theaters. 

 

On an optimistic note I have great faith in the scientific community to come up with treatments and ultimately a vaccine. Once that occurs things will begin to return to what was once normal albeit at what, 80, 90% of what it was. I doubt that we will get back to normal in the coming decade. Too many people will remain afraid of density for quite awhile. This is a momentum buster for sure but I do feel strongly that given time, we will get it back. It's just going to take awhile.

9 minutes ago, cadmen said:

On an optimistic note I have great faith in the scientific community to come up with treatments and ultimately a vaccine. Once that occurs things will begin to return to what was once normal albeit at what, 80, 90% of what it was. I doubt that we will get back to normal in the coming decade.

 

Once a vaccine is in place, I think things will return to normal fairly quickly. Look at the bars and restaurants across the US upon opening--people are dying to get back to their normal---pre-COVID---lifestfyles---and plans. 

the Roaring 20's followed the Pandemic of 1918.  People will still live downtown and in dense Urban areas.....because it makes sense.  And remember, the densest cities in the world all came through this pandemic much better than the U.S.  

According to the latest census data, of the 70,781 private jobs downtown, 82% live outside of the city, 40% live outside of the county. Only a small percentage of downtowns population is in the workforce, whether they are retired, students, or for other reasons. In terms of downtown residents who reverse commute we are looking at 3000- 4000 people. Additionally 20% of those still work in the city, so no real gain there. Any way you look at it if working from home did increase, the city would be a major loser in terms of taxes, not even mentioning the other spin off issues associated with that. 

15 minutes ago, mack34 said:

the Roaring 20's followed the Pandemic of 1918.  People will still live downtown and in dense Urban areas.....because it makes sense.  And remember, the densest cities in the world all came through this pandemic much better than the U.S.  

 

Did they, though?  Did they report all their cases?   All the deaths?  In the favelas of Rio, the slums of Karachi?    The less said about China, the better.  

 

And if so, is it apples and oranges?   Americans are different than the rest of the world in our mindset, and we know it.   What we see is NYC being the epicenter of this stuff in the USA and it is far and away the densest place.

The 20s isn't really relevant because jobs were more centralized and commuting more difficult.

 

I don't see how density hasn't acquired a new stigma.  Especially among the older people who might benefit from it the most.

^ I would bet anything that real estate value in NYC will still be going up. 

International investors have to park their money somewhere, and NYC is still NYC. 

51 minutes ago, JSC216 said:

According to the latest census data, of the 70,781 private jobs downtown, 82% live outside of the city, 40% live outside of the county. Only a small percentage of downtowns population is in the workforce, whether they are retired, students, or for other reasons. In terms of downtown residents who reverse commute we are looking at 3000- 4000 people. Additionally 20% of those still work in the city, so no real gain there. Any way you look at it if working from home did increase, the city would be a major loser in terms of taxes, not even mentioning the other spin off issues associated with that. 

 

When's the latest census data from? What some fail to understand is the amount of people moving into downtown and the nearby neighborhoods. The numbers and economics are changing very quickly, so be careful relying on out-dated data. That said, what we're seeing on the ground now will take at least 2-3 years to show up on future census estimate/projections.

 

Look at the shear number of housing units going up in the Ohio city/flats/downtown area alone. Developers are putting up more units there than in the rest of the county...combined. When my friends from Brecksville visit they're blown away by the amount of construction and pedestrian activity they see in our neighborhood.

Edited May 20, 20205 yr by Clefan98

1 hour ago, cadmen said:

 Every project downtown built on the previous development. One led to another; a virtuous cycle. Same with people moving downtown - more people moving there led to more people wanting to move there. Short term covid 19 is slowing the momentum that downtown was experiencing. Projects are being delayed, downsized or cancelled. Same for individuals planning on moving downtown. Many will think twice and delay/cancel the move.  Many, many segments are being hurt by this. WFH will increase but it won't replace the office. Business and leisure travel will be impacted leading to a pretty significant decrease in hotel occupancy along with a corresponding decrease in people eating in downtown restaurants and attending theaters. 

 

On an optimistic note I have great faith in the scientific community to come up with treatments and ultimately a vaccine. Once that occurs things will begin to return to what was once normal albeit at what, 80, 90% of what it was. I doubt that we will get back to normal in the coming decade. Too many people will remain afraid of density for quite awhile. This is a momentum buster for sure but I do feel strongly that given time, we will get it back. It's just going to take awhile.

 

What projects are being canceled?

 

And the people who are afraid of density were never going be a relevant part of Cleveland's future. 

3 hours ago, Clefan98 said:

SHW's employees are heading back to their offices in June.

I am not aware of anyone that is not on the "essential" list going back anytime soon. No dates have been communicated as far as I am concerned.

20 minutes ago, Clefan98 said:

 

When's the latest census data from?

2017 which is why I gave a range of an additional 1,000. 

1 hour ago, E Rocc said:

 

Did they, though?  Did they report all their cases?   All the deaths?  In the favelas of Rio, the slums of Karachi?    The less said about China, the better.  

 

And if so, is it apples and oranges?   Americans are different than the rest of the world in our mindset, and we know it.   What we see is NYC being the epicenter of this stuff in the USA and it is far and away the densest place.

The 20s isn't really relevant because jobs were more centralized and commuting more difficult.

 

I don't see how density hasn't acquired a new stigma.  Especially among the older people who might benefit from it the most.

Well then, how about the Hong Kong Flu pandemic of 68/69?   I don't think anything changed after that.

Edited May 20, 20205 yr by skiwest

39 minutes ago, JSC216 said:

2017 which is why I gave a range of an additional 1,000. 

 

Even that range might be a little low but that's just splitting hairs. What's happening on the other side both bridges will be a huge asset to downtown's recover over the next couple of years.

 

I don't think anyone should expect an immediate bounce back but downtown Cleveland will be fine in the long term. And depending on leadership, maybe even better than fine.

 

Edited May 20, 20205 yr by Clefan98

48 minutes ago, skiwest said:

Well then, how about the Hong Kong Flu pandemic of 68/69?   I don't think anything changed after that.

 

We didn't shut down the economy.  Hell, while it was more or less dormant 400,000 people attended Woodstock and about a million watched Apollo 11 go up.

 

In any case, the turn of the decade and the period after was hardly downtown Cleveland's heyday.

1 hour ago, KJP said:

 

What projects are being canceled?

 

And the people who are afraid of density were never going be a relevant part of Cleveland's future. 

I agree.  Also,  if a vaccine becomes available (fingers crossed), I think people will go back to business as usual.

Regarding office space - I think there will be some changes, but overall I think it will be a wash. Some companies will downsize space as more people work from home, while others might use more space. I forget where it was from, but I was reading an article the other day on companies redesigning their office space to have three employees in a work area instead of the usual 6, and others that will be putting up more walls and dividers. I was watching CNN this morning and that had a rep from CBRE on who was talking about companies currently renewing leases. Some were downsizing space, but others were adding more space, going from (I forget the exact numbers) 125 to 175 square feet per employee. That same interview had a commercial landlord on talking about what landlords are doing. He was explaining some, himself included, were adding doormen so workers don't have to touch the handles, and putting out boxes of tissues for elevator buttons. I expect we would see more doors being switch to open automatically, maybe with a keycard swipe. I think it'll be interesting to see what type of "amenities" landlords add in due to this.

KJP regarding which office buildings have been cancelled there was a recent mention in a thread (I thought it was yours but maybe not) about a potential office building that was either going to be downsized or cancelled. Knowing the times and the difficulty in getting ANY office building built downtown that doesn't seem unreasonable to me. 

 

As you well know CLE has done an amazing job converting obsolete office space into residential. We've done a decent job building new residential. What we don't do well is build new office towers. I won't go into the reasons - most of us on this site are all too familiar with them. 

 

When you combine the difficulty in getting a new office tower built with the covid 19 times isn't it reasonable to think things will be tempered even more? I'm not saying it's the end of the world. I'm just saying the climb is more difficult today than it was 3 months ago. 

1 hour ago, E Rocc said:

 

We didn't shut down the economy.  Hell, while it was more or less dormant 400,000 people attended Woodstock and about a million watched Apollo 11 go up.

 

The HK flu killed 100,000 Americans over 2 flu seasons.  We are at 93,000 in 10 weeks.

5 hours ago, cadmen said:

KJP regarding which office buildings have been cancelled there was a recent mention in a thread (I thought it was yours but maybe not) about a potential office building that was either going to be downsized or cancelled. Knowing the times and the difficulty in getting ANY office building built downtown that doesn't seem unreasonable to me. 

 

As you well know CLE has done an amazing job converting obsolete office space into residential. We've done a decent job building new residential. What we don't do well is build new office towers. I won't go into the reasons - most of us on this site are all too familiar with them. 

 

When you combine the difficulty in getting a new office tower built with the covid 19 times isn't it reasonable to think things will be tempered even more? I'm not saying it's the end of the world. I'm just saying the climb is more difficult today than it was 3 months ago. 

 

That's one building. And it is "maybe" on hold. It's not dead. And even if it isn't, look for more residential developments to pop up.

 

I'm extremely happy to see planned projects moved forward and even some large, new projects emerge.

I applaud your optimism Ken.

Once the pandemic is officially declared over, I think life will go back to what we were used to. We are well aware of pandemics, yet life went back to normal once the 1918 flu was declared over. I get irritated when I hear COVID is the flu, but when the pandemic is over, I'm not going to avoid going to a busy restuarant and talk to people at a bar over concerns from a cold or seasonal flu.

 

16 minutes ago, cadmen said:

I applaud your optimism Ken.

 

Optimism = energy = productivity.