Industrial Commercial Properties plans $100 million project in Seven Hills
Industrial Commercial Properties LLC, a Solon-based developer known for tackling tough sites, is planning a $100 million construction project in Seven Hills.
Early renderings of the 7Hills District show a building with 240 apartments, nearly 93,000 square feet of office space and approximately 50,000 square feet of restaurant and retail space. The plans span 10 acres on the south side of Rockside Road, west of Interstate 77.
To the south, PulteGroup hopes to build 147 townhouses on a partially forested 35-acre site. The homes, which start at around $350,000, will act as a buffer between commercial development along Rockside and existing single-family homes to the west.
Seven Hills, a community of approximately 11,500 people, has talked about the lands of Rockside for more than a decade. Developers Louis Beck and Jeff Graef bought much of the site in 2015 and eventually cobbled together 54 acres. They spent the next few years trying to find the right project team and type of project.
Industrial commercial properties came onto the scene last year, after Graef and Beck parted ways with Fairmount Properties, an Orange-based developer that explored buying the entire site. Now, ICP and its frequent joint venture partner, California-based Industrial Realty Group LLC, have reached an agreement to purchase the Rockside frontage at an undisclosed price.
And they’re setting an aggressive pace, with hopes of starting construction this year. Discussions with potential corporate tenants are determining this timing, despite great uncertainty about the impact of the pandemic and the growth of remote working on long-term demand for office space.
“We’re pretty bullish on the office market,” ICP COO Chris Salata said in a recent interview. “We think it’s going to come back. We think it’s going to come back – and it’s going to look different.”
The developers presented preliminary plans late Wednesday, February 9, at a joint meeting of the city council and its planning commission. This discussion kicked off what will likely be a lengthy public process.
ICP offers its vision of a mixed-use neighborhood, where people can easily walk between apartments, offices, shops and restaurants. Fairmount had a similar vision for the site, but ICP scaled down each of the components – razing around 100 apartments, reducing some office space and halving the number of retail and restaurant businesses.
The seven-story residential building, with four floors of apartments above three levels of parking, will be nestled into a steeply rising hill as the property extends south from Rockside. This design will save developers money on site labor and allow them to hide the 547-space parking lot from view.
Ground floor storefronts and ocean liner type apartments will screen the facade of the structure. The apartment complex will include a pool deck, facing north toward the downtown Cleveland skyline.
“I think the combination of residences, retail and office space will be a great addition to the Rockside corridor and a continuation of the investment we’re seeing on the north side of Rockside,” Mayor Anthony Biasiotta said during a interview.
He noted that ErieBank has just opened a new regional headquarters in Rockside, immediately north of the 7Hills district site. Sweeping Corporation of America has recently re-engaged in the region. And Meijer opened a supercentre in the city last year, near Broadview Road.
Seven Hills is in the process of striking a development deal with ICP and Pulte, which plans to build its townhouses on lots developed by Graef, Beck and Doug Krause of Hinckley-based Carrington Homes.
Biasiotta said the city is talking with ICP about potential incentives for its part of the project. These conversations include tax increment financing, an arrangement that would funnel new property tax revenue from the development back into the project, to help fund infrastructure work.
The City of Parma School District will need to approve any tax increment funding arrangements.
“When the office building is built…we are ready to work with future tenants through income tax refunds and other potential vehicles,” the mayor said.
At Wednesday’s town hall meeting, officials seemed enthusiastic about the plans. However, a few council members raised concerns about townhouses, saying neighbors would prefer single-family homes instead.
Jim O’Connor, regional planning manager for Pulte, said the publicly traded homebuilder believes the location and style of the homes will appeal to young professionals and older residents who want access to recreation, restaurants and entertainment – without the responsibility of a large yard.
“It will attract what we call urban commuters,” he said.
Nearly a third of townhouses will have the master bedroom on the first floor, making them accessible to buyers wishing to age in place. Between 2,625 and 2,780 square feet, these homes will cost from $400,000, O’Connor said.
Other townhouses, with no bedrooms on the first floor, will be 1,800 to 2,800 square feet. If city officials approve, Pulte plans to build the townhouses in three phases over three years.
Graef and Beck will cling to a few lots at the west end of the site, along Crossview Drive, where they could still build a handful of single-family homes.
After some jolts, Graef seems convinced that ICP can move the earth in Seven Hills.
“The city has been studying this site for years,” Salata said. “They’ve been through several iterations. We don’t hit a lot of tires. When we contract something, we execute.”
Elsewhere in northeast Ohio, the company is transforming the long-suffering City View Center mall in Garfield Heights into a business park, reimagining the land where the Geauga amusement park once stood. Lake and pursuing a slew of industrial real estate transactions.
Along with Industrial Realty Group, its 50% partner in the Seven Hills deal, ICP is planning the future of IX Center, the sprawling Cleveland site the companies took over last year.
“We’re thrilled to have them on board,” Graef said. “They have a good capacity to carry out a project of this magnitude.”