July 13, 200618 yr Excellent article, KJP. You really delivered a lot of what has been expressed here in a concise, well-written piece! I hope people outside the forum are reading!
July 13, 200618 yr ^good question zaceman...how far can Shaia go? if the court battle really takes place and he's ready to break ground in 6 months, what then? Does he risk starting and then losing the property and all the money he's sunk into it? What scenarios can the courts create here anyway? Is it either the land is transferred or not? Is it one piece of land at a time or all at once?
July 13, 200618 yr Sahia can't really move forward as long as the ED proceedings are hanging over his head- no reputable bank would finance the project and no prudent buyer would put a deposit down under these circumstances. Shaia might be able to recover some of his development soft costs, however, if the court deems them to have increased the value of the property. Should be super interesting to see if this is headed to court, to city hall, or back to the negotiating table... I also wonder if anything is going on behind the scenes.
July 13, 200618 yr ^right...good points Strap. It's rare for a development in this city to get financed without some presales (Avenue District) or momentum built up from other phases (Stonebridge). Shaia's would certainly be contingent upon this and the risk involved with eminent domain proceedings is pretty significant. As KJP's article implied, it's unfortunate that more negotiation and collaboration is not being pursued with this project. Or, at least, not to our knowledge. It would be a shame for the city to lose out on development potential and possibly suffer from long-run negative impacts due to having developers at war with each other. Also, there's always the issue of what kind of precedent eminent domain cases set for the future of development in a city. I, too, am wondering what's going on behind the scenes...or at least, what's going on in the mind of Wolstein!
July 13, 200618 yr Author Nancy Lesic did call me back, but after deadline. I will run a follow-up next week with her comments. But the gist of her statement was that as long as the port authority is doing the property acquisitions and, since then, taking the legal actions, Scott Wolstein can't get involved in negotiations. Yet that only reinforces the basic theme of my article -- no one appears empowered to alter/adjust the process based on changing conditions (such as a legitimate development proposal or two). The whole thing is locked in a state of legally enforced inertia and with no apparent ability to change it without the intervention of a common pleas court judge. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
July 14, 200618 yr Great post, KJP. Nancy Lesic is lying to protect her client (hard to believe, I know). Yes, technically, the Port Authority facilitates the "negotiations," but Scott Wolstein tells the Port what to do. SCOTT WOLSTEIN makes ALL DECISIONS regarding which properties to go after and how much the Port is authorized to pay. Scott Wolstein's new company (Flats East Bank Development, LLC) signed a Development Agreement with the Port in 2005. The contract stipulates that the developer (Scott Wolstein) controls all property acquisition decisions and will ultimately pay money to control whatever properties are acquired by the Port. It is up to Scott Wolstein to decide which properties he wants to try to "land grab" and which ones he chooses to leave alone. For example, there are 2 properties in the Community Development Plan area that Wolstein has chosen to leave alone (1100 West 9th and also 1150 West 9th). Just ask Bob Brown or Daryl Rush from the City to see the paperwork. Scott Wolstein is the one who's abusing eminent domain and refusing to help Khouri & Shaia with their deals.
July 16, 200618 yr ncs wrote (June 23, 2005) - "I love how Stonebridge just came together. There was really no news about this large development 7 years ago. No huge master plan posted all over the Plain Dealer and all over the news. It seems like those kind of projects are just set up to fail." I say amen to that! And Scott Wolstein is a perfect example of what ncs means -- all the friggin' pomp, circumstance and secrecy until the BIG UNVIELING replete w/ Mayor Campbell and other pols along w/ all the media outlets. I would never sneer at all the money the Wolstein family has given to education and medicine in this town. But development-wise? ... Wolstein wants the public to love him (as in, putting the public fisc + political mechanics squarely behind him). I don't like the renegade owners who sat on their land until Wolstein moved, but they've got a point: the Wolstein's sat on E. Bank property for nearly 2 decades; watched it deteriorate and, now, with the weight of the Port Authority and City Council, want to force owners out at bargain basement prices -- true, these robbers wanted it both ways in getting the lower reassessments when their businesses failed (& who sat on their boarded-up properties, like the Wolstein's), but Wolstein is no aggrieved prince/savior in all this, either. The whole mess smells, and people here (in addition to the PD's respectable architecture critic, Steve Litt) are rightfully iffy about the sterile design of Wolstein's proposed residential buildings in wiping out some of the handsome, quirky and historic warehouses that formed the core of Old River Road's electric/eclectic nightlife district up through the year 2000. And I'm not saying the Shaia's are saints, either, but Victor's proposed "Lighthouse" condo towers are frankly even more exciting looking that Wolstein's venture. And as it was noted in KJP's, something REALLY smells about the Port Auth instituting eminent domain (essentially a taking w/o just compensation) of Shaia's surface parking land to turn it back into ... SURFACE PARKING. Especially if we could have high-end, new-construction condo towers on them (all 3 elements being rare in downtown, even w/ all the residential surge, esp the last 2). And let's not strain imagination/optimism. Do you really think Shaia and Wolstein are talking behind closed doors? Not! This is classic Cleveland 'planning', 2 warring factions that can't agree, won't compromise (or even negotiate) who, in the end, may destroy the E. Bank market for everyone. At the very least, I think it'll be years before any construction can start (keep in mind, Wolstein, even at the mega-announcement in May 2005, didn't even project an opening until 2009, at his optimistic earliest). And what if, while this court battle rages on, the downtown housing market goes sour, killing the project, and leaving us with promises and vacant, surface parking and weed-choked gravel, much like what happened w/ the Marous' District Park, which we all thought would be nearing completion of Phase I about now -- turned out to be Phase Nothing. I'm not saying the East Bank will end up this way, but you never know... espcially in Cleveland ... At the very least, I'm afraid I can confidently predict that, at least for a considerable while, we'll just have to be content to watch the condo boom cranes rise... on the WEST Bank of the Flats, as owners over there are less about talk and more about cooperation and action.
July 17, 200618 yr ^^ I see your point...but that being said, I don't see how the Cleveland housing market is going to sour. The area around d'town and d'town itself has seen a slow and steady increase in availability of housing units downtown over the past 20 years and there has been a continuous demand for more. This isn't the office boom of the 80's....the housing stock has been increasing modestly...which each new project getting a little larger in size and scope. It'll be only a matter of time before Sharia and Wolstein realize they're missing out on something good and being to negoitiate something.
July 18, 200618 yr ^No, I didn't say the housing market, currently, is sour, but I was implying it easily could become so. Let's face it, while new home construction, esp of the high-density townhouse type, is strong in the neighborhoods and close-in burbs, downtown is iffy, now, compared to even compared to other the other 2 "Big Cs" right here in Ohio. We've done fine with office/warehouse conversions, but new construction? In the 12 years since 18-story Crittendon Apts went on line at the edge of Flats/Warehouse, we've had only 2 all new constructions downtown: (everyone's fave) Stonebridge, and the Pinnacle, which has struggled w/ all kinds of delays and, at this moment, is still unfinished after a very slow construction phase. Compare the similar record of a Baltimore, Cincy or even Columbus over that same period and, well, you get the picture. We're only holding our own w/ lowly downtown Detroit (but don't look now, their under a head of steam on the heels of hosting the Super Bowl, and a huge Jerome Bettis/Dave Bing condo project will soon rise on the Detroit river; there's already a, few-years-old gigantic condo tower (Harborplace?) along East Jefferson St. at downtown's edge) And look at the recent list of failed plans downtown: District Park, of a few years ago on W. 9th, 2 projects named "Courthouse Towers" (1 w/ a glimmering condo tower, the other with mainly a 330 Doubletree hotel). Even some of our for-sale office/warehouse conversions projects have failed, recently: like the Channel 3 building condos and that large building on W. 4th behind the core W. 6th District of the Warehouse Dist. Everyone's dazzled by the amazing success of Stonebridge, but Corna/Price are definitely defying the odds downtown. Yes, Stark and Wolstein have nice plans, but comeon, we in Cleveland should know better than most towns that, so long as girders aren't rising from the ground, the all-to-numerous blueprints aren't even worth the paper they're written on. If Cleveland had built even half the great plans that have been proposed over the years, we'd be Chicago. Let's face it, not to be negative (but honest/realistic), any significant project of any kind -- esp high-density residential/hotel or retail downtown -- is a much bigger struggle in Cleveland than it is for most big cities. That's just our troubling nature that keeps us in our perpetual 'coming from behind' status in so many ways. The stars must be aligned for really good stuff to happen (and most likely, the good stuff you see is after years, often decades, of a great deal of struggle and heartache --). And even when we do build a really nice project (the Flats, Tower City, the Rock Hall, the RTA Waterfont Line), we often end up questioning its success, turning our backs on it and achieve the self-fulfilling prophecy of the naysayers as such projects end up failing (or kept barely alive). This is why I fear the worst for Flats East Bank. Wolstein, who had all the wind in his sails last May, has been fumbling the ball badly, esp in the court of public opinion. He may only be 2 or 3 sales away from securing his "footprint" land, but it's only going happen after a major court struggle -- and you think there won't be appeals if he succeeds?. And it's beyond absurd to fight with Victor Shaia to actually try and STOP a major condo development -- in downtown Cleveland, no less (of not 1 but 2 towers); especially when all he wants for this land is surface parking. And Wolstein isn't even negotiating. I fear this whole thing is going to collapse -- like I said, I could see the market shift, construction costs to bubble up -- on top of his legal fees fighting fighting the other property owners -- with Wolstein pulling the plug in one of those PD back-pages little articles much like the aforementioned would-be developers. I sure hope I'm wrong. I'd HAPPILY eat my words.
July 18, 200618 yr Clvndr, you have nothing beyond your own negativity to back up your suspicion that the downtown housing market will become "sour." Cleveland has the fastest-growing downtown population in the Midwest. The Downtown Cleveland Alliance started its clean-and-safe program in April and will expand its programs in coming months to boost downtown events and, possibly, retail hours among other improvements. Who cares whether most housing units being added are renovations? I think that's cool, and it makes sense to reuse what we've got first before building new. Meanwhile, the Avenue seems on track to break ground in late summer/fall (fingers crossed). Try to concentrate on what's going on now rather than what's happened in the past. Look at what's happening in other old industrial cities like Cleveland. While the inner-city neighborhoods of places like Baltimore and Philadelphia continue their slow death, their downtowns have become quite vibrant. People want to live in downtowns. Now that we're finally paying more attention to quality-of-life issues, through the DCA, than building venues to lure suburbanites, I think it's entirely reasonable to expect our downtown to continue gaining momentum. Downtown housing projects that fail from here on out are failing because of their own flaws -- and Wolstein's is probably the most flawed among them, for a number of reasons -- not because downtown itself isn't viable.
July 18, 200618 yr As I don't totally agree with clvndr, I see their point. I believe over in the Avenue District thread there was news that it has almost hit the pre-sales requirement for ground-breaking which was something in the order of 25 units I believe. It is kind of discouraging that living in a region of approximately 3 million people, it is hard to sell 25 condominiums downtown.
July 18, 200618 yr ^that said, I think that Cleveland is new to the "pre-sell" stuff. I would be nervous about agreeing to buy a home before I ever saw it.
July 18, 200618 yr ^ i agree about cleveland being new to the presell. this is one reason that stonebridge was successful, as it was built and then sold off. stonebridge v is being built part rental as well, with plans to convert later. the other problem with presell is you have to wait. at the groundbreaking announcement last fall for avenue district, the plan was to close the parking lots in June 2006 and start construction...almost 2 months behind the initial optimism. i'm hopeful it still happens, but wouldn't be happy having to wait even longer to get into a home i had already put money down on.
July 18, 200618 yr ^ it is a huge leap of faith to do the pre-sell thing. I never thought I would do but it is proably more about my generally not caring for new contruction rather than concerns about final product. the good thing about presales is you get price break. Stonebridge 4 was seriously behind too. we put a deposit down in Oct 2003, and were in the first group to close in Feb of 2005, over a year later than original projection. Luckily the house in Cleveland Heights took FOREVER to sell so the timing was perfect.
July 24, 200618 yr Port Authority buys Flats property Related Links Cleveland-Cuyahoga County Port Authority By LESLIE STROOPE 3:07 pm, July 24, 2006 The Cleveland-Cuyahoga County Port Authority has closed its deal to purchase the site of the old Jimmy’s Bar in the Flats from Telecom Acquisition Corp. — a move that puts developers a step closer to revitalizing the Flats as an entertainment, retail and housing district. The port in April reached an agreement to purchase the property, at 1061 Old River Rd., for the Flats East Bank redevelopment project. A port authority statement did not provide the dollar amount for which it purchased the property. More at cleveland.com http://www.cleveland.com
July 27, 200618 yr Got a question. Do any of the legal minds on this forum know if the recent Ohio Supreme court decision on eminent domain in norwood will have an effect on the eminent domain proceedings for the Flats e. bank plans?
July 27, 200618 yr Nope. There is a grandfather clause. The court decision would make developments like the East Bank very very difficult to do in the future.
July 27, 200618 yr Has anyone seen a map of what properties have already been acquired, which properties are in court for eminent domain proceedings, and which properties are still in (pre-emininent domain) negotiations? Would be nice to see something posted.... :wink:
July 28, 200618 yr Also, Wolstein is approaching the East Bank takings the old-fashioned way: he had City Council declare all properties in question "blighted." So economic development (which Norwood dealt with) is technically not the rationale behind these takes.
July 28, 200618 yr Court limits eminent domain Court: Money can't drive eminent domain Thursday, July 27, 2006 Ted Wendling Plain Dealer Bureau Chief Columbus -- In a closely watched case with national implications, the Ohio Supreme Court ruled unanimously Wednesday that governments and developers cannot use economic benefit as the sole reason for seizing private property. The decision is a major victory for property owners in Ohio and an explicit rejection of a U.S. Supreme Court eminent-domain ruling last year. In a Connecticut case, the high court said economic development served such an important public purpose that it justified the taking of even unblighted land. More at http://www.cleveland.com/economy/plaindealer/index.ssf?/base/news/115398907436920.xml&coll=2
July 28, 200618 yr Ruling pleases lawyers in local domain cases Thursday, July 27, 2006 Sarah Hollander Plain Dealer Reporter Lawyers fighting local eminent domain efforts cheered Wednesday's Ohio Supreme Court ruling in the Norwood case, saying it should give their clients more protection in court. The court, in a case involving Norwood, near Cincinnati, ruled unanimously that governments and developers cannot use economic benefit as the sole reason for seizing private property. A dozen lawsuits are pending against property owners who are blocking a city-backed plan to redevelop the east bank of the Flats with housing, restaurants and shops. More at cleveland.com http://www.cleveland.com
July 29, 200618 yr If plans for redevelopment fail, Cimperman said he fears for the future of the Flats. "The status quo right now is a death spiral." Seriously... a death spiral? You've got tot be kidding. Is he over generalizing, or am I misinterpreting this statement?
July 29, 200618 yr If plans for redevelopment fail, Cimperman said he fears for the future of the Flats. "The status quo right now is a death spiral." Seriously... a death spiral? You've got tot be kidding. Is he over generalizing, or am I misinterpreting this statement? I agree "death spiral" is way over the top. What about the west Bank?? What about those of us that already live in the death spiral? gee thanks. JC needs to explain.
July 29, 200618 yr The only part of the Flats in a death spiral is the part that Wolstein owns and wanted to have declared blighted.
July 29, 200618 yr just a thought, if this project does not move forward, would all the proposed projects that developers came out with AFTER THE ANNOUNCEMENT OF WOLSTEINS, move forward? Especially Lighthouse Landing.
August 9, 200618 yr Notes from Flats Oxbow Design Review Meeting & 7/5/06 The Design Review Committee passed the façade & signage for Larry Flint’s Hustler Club @ 1041 Old River Road as originally presented on June 20, 2006 and approved it on July 5, 2006 when the applicant presented the additional information the Committee sought. The Design Review Committee further advised the applicant that any changes to the buildings on Front Street would be considered new submissions to Design. and: New Project News – So, What’s New? by Jessica G. Dunn, Strnisha Development Advisors Scott Wolstein’s Flats East Bank project has a new partner. The redevelopment team will be working with Building Cleveland by Design to explore ways to incorporate art, park design, and sustainability into the $230 million project. Building Cleveland by Design, managed by ParkWorks and Cleveland Public Art, has been awarded a two-year, $440,000 grant from the George Gund Foundation to provide resources and expertise in these areas to regional development projects. and, finally: Patrol Officer John Hategan of the 2nd District presented a traffic plan for the West Bank. (Sergeant James O’Malley wrote the plan but could not be in attendance today.) Purpose During recent West Bank of the Flats details, heavy traffic led us to determine that the current traffic patterns may be outdated and in need of review. Gridlock is a common occurrence during busy weekends and special events and with the increase of residential properties in the area, we feel that if changes were made, emergency services could respond in an efficient, safe manner without the constant monitoring and street closing by law enforcement at key intersections. It is our opinion that some or all of the below changes could be effective: Proposal: 1. Make Center and Main a four way stop intersection. This would assist in traffic flow and create a safe option for entering Main Ave. Several obstructions from parked cars and hills lead to a traffic hazard. 2. Place stop signs at Main & Elm, creating a three way stop intersection to assist in traffic flow. 3. Make Elm St. one way North from Elm to River St. 4. Make Center St. one way south from River to Main Ave. 5. Make Hemlock one-way East from Mulberry to Elm St. 6. Make Spruce one-way West from Elm St. The addition of one-way streets would allow law enforcement to maintain a safe flow of traffic and would assist if street closures are needed. Essentially, it’s easier to close and secure a one-way street than a two way street. Less officers and cars are needed. This allows other officers to enforce traffic laws and maintain police visibility in the area. (NOTE: This type of closure is often utilized when traffic backs up so that emergency services can proceed to an assignment without undue interruption.) Special Issues / Considerations 1. Parking on these streets would need to be reviewed. Permitting curb parking in areas previously restricted may be necessary. 2. The width of Elm and Center streets would need to be considered. They are basically wide streets when the curbs are clear. We would not want to create an opportunity for drag racing or illegal passing. Painting solid lines or lane markings to force “one lane” may resolve this issue. River Street would need to remain a two way street due to the mines. NO OUTLET signs at Center and River may be needed. Summary These recommendations come after several years of maintaining traffic in these areas during heavy traffic times and would assist law enforcement in effectively maintaining a safe traffic flow for public safety and emergency response. There were questions on how long it would take to implement the plan. Commissioner Rob Mavec (City of Cleveland – Traffic Engineering) had a suggestion to limit the times to only late evening early morning. The majority of people in attendance agreed that it should be 24/7. Commissioner Mavec said he would meet with Sergeant O’Malley. This could possibly be in place by next weekend. There was a request for speed limit signs on the viaduct. Rhona Allen requested a Handicap sign for in front of her shop on Old River Rd. There will be a meeting at the Imrov on August 2, 2006 at 9am regarding the W. 28th/W. 25th/Washington/Division area by ODOT. I wonder why nobody brought up public transportation, or the proposed elevator to the viaduct.
August 9, 200618 yr So, if Wolstien gets all east bank properties, will Larry Flint find his way up to the warehouse district? :|
August 9, 200618 yr ^ hopefully one of the vacant e4 properties. closer to businesses and hotels, what could be a better location?
August 9, 200618 yr ^I'd kind of like to keep the Hustler stuff on the fringes of downtown. If they want problems, they'd put it next to the gay bathhouse. Overly-zealous hetero males are strangely offended by the homo lifestyle.
August 9, 200618 yr Overly-zealous hetero males are strangely offended by the homo lifestyle. since when?
August 9, 200618 yr I was thinking the old Moda space would be perfect! By the way, we did see someone (a painter?) working in the Moda space two nights ago.
August 9, 200618 yr I was thinking the old Moda space would be perfect! noooooooo. check cashing and pay day loan in liquor store starting to sound classier!
August 9, 200618 yr On W. 130th there is a Bar/Pawn Shop. I have always wanted to go there and pawn something for a beer, but I've never found the right item. Perhaps this concept could be taken upscale and brought to Ohio City. I think that a lot of people would think it's a "hoot".
August 10, 200618 yr just a thought, if this project does not move forward, would all the proposed projects that developers came out with AFTER THE ANNOUNCEMENT OF WOLSTEINS, move forward? Especially Lighthouse Landing. My guess would be: No. Despite the contentious relationship btw Shaia and Wolstein, fact is the Lighthouse is attempting to piggyback on Wolstein's success. If Wolstein's shops and retail and high-density residential development along the river are suddenly removed, what motivation would people have to rent in a high-rise condo that is inland surrounded by the gravel and dust of the Port Auth, the sleaze Larry Flynt's Hustler club and the crumbling, abandoned Old River Road warehouse/former clubs regardless of how attractive the Lighthouse buildings are, themselves? And given the tight pre-sales/loan formula that is utilized by local banks, it is doubtful that construction would commence if the market suddenly turns sluggish. If Wolstein fails, Shaia's project dies too... and then we're stuck with nothing. Cimperman's 'death spiral' comments may be strong, but Wolstein's (and hence Shaia's) failure would be an extreme blow to the Flats. A half-of Flats -- West Bank, only-- won't fly despite Stonebridge's amazing growth -- that one project can't carry the whole area. And let's not delude ourselves that the West Bank is all that healthy, either. With the quiet closing of Riverwalk Cafe, if I'm not mistaken, we're down to just one river-level, sit-down Flats eatery on either side of the river: Shooters; and from all I'm hearing, Shooter's is on the brink of closure, itself; that this summer may be its last hurrah. I sure hope not, but what restauranters are finding is the charm of sitting along the river has been greatly diminished since West Bank diners are sitting facing a bunch of dilapidated warehouses across the riv -- no fun!
August 10, 200618 yr Oh yeah, we've heard about the massive Wolstein, Jeff Jacobs (plus I forget the other playa) casino, retail (hotel?) development IF Ohio passes the casino vote. That's a big if. If it flies, we could see a massive development that could sweep to the East side and get development pumping even if Wolstein fails -- but, of course, Wolstein's failure would set us back several years as an entirely new plan would have to be developed.
August 10, 200618 yr I think the flats should be revitalized to exactly what it was 10 years ago. Alot of develpment opportunitiwes were missed at that time such as hotels and parking garages. That area does not need massive redevelopement, rather, just a spruce up. I never liked the east bank plan in that it created an isolated island of developement versus just letting dominos fall and build based on demand. That is the only successful type of developement when it is built on demand versus force fed. The dominos just began to fall toward the end of the flats (Fed Cths Tower and other proposed project). Pardon my analogies.
August 25, 200618 yr Not sure if anyone else has posted/seen this tidbit from Fairmount Properties in regards to the development of Flats EastBank. On their site, they mention a total build out of over 1000 units. Perhaps they meant to say over 1000 residents? http://www.fairmountproperties.com/retail-developments.htm Fairmount Properties was the primary developer of First and Main in Hudson which was recently reviewed by Cooltown Studios http://www.cooltownstudios.com/mt/archives/000872.html
August 30, 200618 yr While it's unfortunate to see this have to go to court as opposed to being hammered out in private negotiations I'm still glad to see it progressing. Flats eminent domain battle set By JAY MILLER 2:06 pm, August 30, 2006 The legal battle that’s likely to determine the fate of the East Bank of the Flats is set to begin Sept. 25 in Cuyahoga County Probate Court. http://www.crainscleveland.com/apps/pbcs.dll/article?AID=/20060830/FREE/60830009/1004&Profile=1004
August 30, 200618 yr I checked the Probate Court docket to determine who was representing the property owners. Based on the reputation of a couple of the attorneys, I would say a negotiated settlement is very unlikely for all of the land at issue. The motion to consolidate was filed by the Port Authority so they must see some sort of strategic advantage to having everything heard in one action (or maybe the Port is just seeking judicial economy and the cost savings (attorneys fees) that follow).
August 31, 200618 yr So will Wolstein start work on the office building or other parts of this project while the case is in court, or will he wait until he has all the land (if that happens)?
September 7, 200618 yr Who is this woman? A lawsuit scrutinizing the Cleveland-Cuyahoga County Port Authority's decision to file eminent domain cases against Flats property-owners will go to trial next month. Lawyers for the port and Cynthia Roether, who filed the suit as an interested taxpayer, met this morning with Cuyahoga Common Pleas Judge Peter Corrigan, who will begin hearing the case at 9:30 a.m. Oct. 17. Roether's suit alleges that the port abused its powers by filing the suits on behalf of developer Scott Wolstein, who wants to build a $230 million mixed-use housing and retail neighborhood on the east bank of the Flats. The suit seeks to halt Wolstein's attempt to acquire the property through eminent domain. More at http://www.cleveland.com/weblogs/business/index.ssf?/mtlogs/cleve_business/archives/2006_09.html#180506
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