Industrial Commercial Properties Plans $100 Million Project in Seven Hills
Michelle Jarboe, Crain's
Industrial Commercial Properties LLC, a Solon-based developer known for tackling tough sites, is planning a $100 million ground-up construction project in Seven Hills.
Early renderings of the 7Hills District show a 240-unit apartment building, almost 93,000 square feet of offices and roughly 50,000 square feet of restaurants 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 construct 147 townhouses on a partially wooded, 35-acre site. The houses, priced starting around $350,000, will serve as a buffer between commercial development along Rockside and existing single-family homes to the west.
Seven Hills, a community of about 11,500 people, has been talking about the Rockside land for more than a decade. Developers Louis Beck and Jeff Graef bought up much of the site in 2015 and ultimately cobbled together 54 acres. They've spent the intervening years trying to find the right project team — and project type.
Industrial Commercial Properties entered the picture 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 a deal to buy the Rockside frontage for an undisclosed price.
And they're setting an aggressive pace, with hopes of starting construction this year. Talks with prospective corporate tenants are driving that schedule, despite broad uncertainty about how the pandemic and the growth of remote work will impact long-term demand for office space.
"We're rather bullish on the office market," Chris Salata, ICP's chief operating officer, said during 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, Feb. 9, during a joint meeting of the city's council and its planning commission. That discussion started what is likely to be a lengthy public process.
ICP is pitching its vision as a mixed-use district, where people will easily be able to walk between the apartments, offices, shops and restaurants. Fairmount had a similar vision for the site, but ICP has pared each of the components — shaving off about 100 apartments, trimming some office space and halving the amount of retail and dining.
The seven-story residential building, with four floors of apartments above three levels of parking, will be tucked into a hillside that slopes up sharply as the property runs south from Rockside. That design will save the developers money on site work and let them hide the 547-space parking garage from view.
Ground-floor storefronts and liner apartments will mask the front of the structure. The apartment complex will include a pool deck, facing north toward the downtown Cleveland skyline.
"I think the combination of residential, retail and office will be a nice addition to the Rockside corridor, and a continuation of the investment that we're seeing on the north side of Rockside," Mayor Anthony Biasiotta said during an interview.
He noted that ErieBank just opened a new regional headquarters on Rockside, immediately north of the 7Hills District site. Sweeping Corporation of America recently recommitted to the area. And Meijer opened a supercenter in the city last year, off Broadview Road.
Seven Hills is roughing out a development agreement with ICP and Pulte, which plans to build its townhomes on lots developed by Graef, Beck and Doug Krause of Hinckley-based Carrington Homes.
Biasiotta said that the city is talking to ICP about potential incentives for its portion of the project. Those conversations include tax-increment financing, an arrangement that would plow new property-tax revenues from the development back into the project, to help finance infrastructure work.
The Parma City School District will have to approve any tax-increment financing deal.
"When the office building is built … we stand ready to work with future tenants through income-tax rebates and other potential vehicles," the mayor said.
During the public meeting Wednesday, officials seemed enthusiastic about the plans. A few council members raised concerns about the townhouses, though, saying that neighbors would prefer single-family homes, instead.
Jim O'Connor, Pulte's regional director of planning, said the publicly traded homebuilder believes the location and the style of homes will appeal to young professionals and older residents who want access to recreation, dining and entertainment — without the responsibility of a large yard.
"This will attract what we call the urban suburbanite," he said.
Nearly a third of the townhouses will have the main bedroom on the first floor, making them accessible to buyers hoping to age in place. At 2,625 to 2,780 square feet, those homes will be priced starting in the low $400,000s, O'Connor said.
The other townhouses, without a first-floor bedroom, will be1,800 to 2,800 square feet. If city officials sign off, Pulte expects to build the townhouses in three phases over three years.
Graef and Beck will hang onto a few lots at the western edge of the site, along Crossview Drive, where they still could construct a handful of single-family homes.
After fits and starts, Graef seems confident that ICP can get dirt moving in Seven Hills.
"The city has looked at this site for years," Salata said. "They've been through multiple iterations. We don't kick a lot of tires. When we put something under contract, we execute."
Elsewhere in Northeast Ohio, the company is transforming the long-suffering City View Center shopping center in Garfield Heights into a business park, reimagining land where the Geauga Lake amusement park once stood and chasing a slew of industrial real estate deals.
With Industrial Realty Group, its 50% partner on the Seven Hills deal, ICP is planning for the future of the I-X Center, the sprawling Cleveland venue that the companies took control of last year.
"We're excited to have them on board," Graef said. "They've got good capacity to get a project of this magnitude done."