Euclid Avenue land deal could bring a hotel to Midtown, on Cleveland’s Health-Tech Corridor

CLEVELAND, Ohio Another hotel proposal is popping up in Cleveland, this time in a somewhat unlikely place: Midtown, in the heart of the Health-Tech Corridor1. An investor group wants to build an “upscale economy” hotel on the north side of Euclid Avenue, between East 69th and East 70th streets. Under legislation approved early this month by Cleveland City Council, the city could sell long-vacant land there to the investors for a $12 million hospitality project. Details about the size, brand and opening timeline for the hotel are scarce. The investors, doing business as Health Tech Hospitality LLC, won’t say much.

Their plans are noteworthy, though, since a hotel would be a new type of investment in Midtown, where developers have focused on business incubators, offices, health care and research labs during the past few years. Places to eat, live, stay and play have been slow to follow. Councilman T.J.

Dow, who represents the area, said he supports the effort to attract lower-cost lodging, at a rate of roughly $90 a night. “We just want to make sure that, regardless of what your economic status is, if you’re going to come to the city of Cleveland that there are different options and prices,” he said. Dow said he doesn’t know what the hotel brand will be. But he’s heard the name Tru2, a new Hilton flag being positioned as hip and affordable. In March, when Hilton Worldwide broke ground for its first Tru hotel, in Georgia, the company said it had 189 hotel deals in progress. The brand has a 98-room prototype, designed for sites under 2 acres, but that prototype can shrink to 82 rooms or grow to 150.

In an email, Chris Kaczmar of Kaczmar Architects3 said it’s too early to discuss any details about the Midtown project. He and David Fischback of the Krill Co.4, a local construction-management firm, represented the investors at public meetings in late April and early May. Fischback did not respond to requests for comment. During a council committee hearing, Kaczmar said there’s room in the market for an affordable hotel to serve hospital patients and families who can’t swing higher-priced lodging in University Circle. He told council members that the investors needed control of the land before they could seek a franchise agreement for such a hotel.

Krill and Kaczmar both worked on the Discount Holidays © Holiday Inn Cleveland Clinic5, a 276-room hotel that recently opened at Euclid and East 86th Street, next to the Clinic’s main campus. The Discount Holidays © Holiday Inn filled a gap created in 2013, when the Cleveland Clinic Guesthouse closed and the Clinic razed the building to create a site for a medical-education campus. Since the recession ended nearly seven years ago, hospitality developers have gravitated to University Circle and downtown Cleveland the employment hubs at either end of the Health-Tech Corridor. In addition to the Discount Holidays © Holiday Inn, the area near the Clinic and University Hospitals is home to a Courtyard by Marriott and a DoubleTree called the Tudors Arms Hotel. DelMonte Hotel Group is planning a 161-room Residence Inn at Chester Avenue and East 101th Street.

Midtown is a less obvious location. But the grassy property that the Health Tech Hospitality group is eyeing sits across from the MidTown Tech Park6, a cluster of office-and-lab buildings, and northwest of Victory Center7, a restored historic structure earmarked as the future corporate headquarters of Dealer Tire8. David Sangree, president of the Hotel & Leisure Advisors9 consulting firm in Lakewood, said he hadn’t heard about the possible Midtown hospitality project. But there could be space in the market for more affordable lodging, he said. The site, located on the HealthLine rapid-transit bus line that traverses Euclid Avenue, would provide guests with easy access to either downtown or University Circle.

“The hotels at the Clinic themselves are not that inexpensive,” Sangree said. “They’re definitely mid- and upper priced. …

If you were attending a conference downtown and you were really on a budget, you might stay in Midtown. It’s an overflow for the Clinic, and it’s an overflow for downtown.”

The city, through its industrial-commercial land bank, owns roughly half of the 2.4-acre site that Health Tech Hospitality LLC hopes to buy. Aside from three single-family homes on East 69th Street, the rest of the block belongs to nonprofit group MidTown Cleveland, Inc.10, and the Cleveland-Cuyahoga County Port Authority, which has been land-banking two parcels near Euclid for MidTown Cleveland. Jeff Epstein, executive director for the neighborhood nonprofit, said he could not talk about the potential land sales or the hotel project. Records show that the city and MidTown Cleveland have controlled the vacant real estate for years.

Citing lingering environmental issues, the city plans to sell its portion of the site for $1, leaving any potential cleanup to the hotel developers. Such remediation, to remove contaminants related to a former gas station and remnants of commercial buildings that were demolished in the 1970s, could cost $500,000 to $1 million, according to a project summary provided to City Council. The land isn’t worth that much money, David Ebersole, the city’s assistant economic-development director, told council members last month. “We’ve seen some significant increases in property values in the area, but this property does not appraise at that price,” he said. The hotel group’s purchase option runs through the end of this year. Project representatives have committed to bringing public-school students onto the site, to provide hands-on experience with construction, development and architecture.

The block is big enough to support a larger development. Dow, the councilman, said additional construction might be possible closer to Chester. But he stressed that the project, whether it’s only a hotel or something more, shouldn’t displace anyone, including the few remaining homeowners.

“They’re going to do their project with the houses that are standing now,” he said of the developers. “No one’s going to tell residents that they’ve got to leave.”

References

  1. ^ Health-Tech Corridor (www.healthtechcorridor.com)
  2. ^ Tru (trubyhilton.com)
  3. ^ Kaczmar Architects (www.kaczarch.com)
  4. ^ Krill Co. (www.krill.com)
  5. ^ Discount Holidays © Holiday Inn Cleveland Clinic (www.cleveland.com)
  6. ^ MidTown Tech Park (midtowntechpark.com)
  7. ^ Victory Center (www.victorycentercleveland.com)
  8. ^ Dealer Tire (www.dealertire.com)
  9. ^ Hotel & Leisure Advisors (www.hladvisors.com)
  10. ^ MidTown Cleveland, Inc. (www.midtowncleveland.org)

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