Lakewood, CASTO reveal hospital site plans

View of downtown Lakewood development at the hospital site, from the corner of Detroit and Belle avenues.

The southeast corner of Detroit and Belle avenues in downtown Lakewood could see construction start by the end of this year on a new development plan for the former Lakewood Hospital site. The ground floor will offer restaurant/retail spaces with offices above for Roundstone Insurance. In the background is a concept for retaining only the façade of the historic Curtis Block while adding a five-story apartment building behind it (Dimit). CLICK IMAGES TO ENLARGE THEM

City Council to review downtown proposal next week

Details of a $90 million proposed development of the city-owned Lakewood Hospital site were announced today by Lakewood Mayor Meghan George. The plan and the terms of the city’s draft agreement with a development team led by Columbus-based CASTO Communities now go to City Council for its review and possible approval. If approved “soon,” city officials said construction could start by the end of this year.

First glimpses of the plan, including identification of the anchor tenant Roundstone Insurance, were revealed earlier this month by NEOtrans. In addition to 65,000 square feet of offices for fast-growing Roundstone, the development at Belle and Detroit avenues offers 200 units of mixed-income for-sale and rental housing, 30,000 square feet of ground-floor retail/restaurant space, a 20,000-square-foot plaza and community space, plus 540 parking spaces. The 5.7-acre property is a huge development site for built-out Lakewood.

Roundstone, based several blocks west along Detroit in the former Fifth Church of Christ, Scientist has about 115 employees in a roughly 20,000-square-foot space. Expecting its employment to grow to more than 200 workers, the insurance firm for small- and medium-sized employers had been looking for new, larger space both in and outside of Lakewood. The addition of 200 housing units will also address a growing need as demand for housing in Lakewood has driven up prices.

Proposed site plan for the new downtown Lakewood development by CASTO's team.

Tentative site plan for CASTO Communities’ downtown Lakewood development, south of Detroit Avenue and between Belle and Marlowe avenues (Dimit).

“This agreement is a significant win for Lakewood on multiple levels, meeting goals that the community set out during the initial visioning process,” George said in a written statement. “Those aspirations included community and economic development priorities for public space, high quality architectural and environmental design, diverse and affordable housing, active commercial uses and workforce growth. The elements of this agreement achieve that vision.”

The downtown Lakewood project’s development team includes CASTO Communities, North Pointe Realty of Mayfield Heights and Lakewood-based Dimit Architects, said the city’s Planning Director Shawn Leininger. He added that having Roundstone as the anchor in the office building allows Lakewood to maintain a growing employer that was otherwise unable to find enough space to remain in the city and keep hundreds of workers patronizing downtown businesses.

“Roundstone has been growing in our city for years, but would likely have ended up leaving Lakewood soon because there was no other location for them to continue that growth trajectory,” said Leininger, who noted that Roundstone is expected to quickly become the second highest source of private payroll taxes for the city. “The city has been working with Roundstone to investigate various options to remain in Lakewood, and having them as the anchor in this development provides a win-win situation that meets the goals for all involved.”

Equipped with a proposed $1.5 million grant from the city spread over eight years, Roundstone will purchase the three levels of office space to be built in the new development. The first floor commercial space will be retained by the developers. CASTO is a national real estate developer with a project it recently built in Cleveland — The Dexter mixed-use building at Franklin Circle in Ohio City.

A public plaza and community space is proposed on Detroit Avenue in the new downtown Lakewood development.

This view looking south from Detroit Avenue, mid-block between Belle and Marlowe avenues, shows the new office building for Roundstone Insurance with ground-floor restaurants/retail surrounding a public plaza. At left is the west edge of a proposed apartment building that retains the façade of the historic but decayed Curtis Block building (Dimit).

“We’re thrilled to expand our presence in the heart of Lakewood with a new office building,” said Mike Schroeder, CEO and founder of Roundstone. “We’re committed to our Cleveland roots and creating jobs in Ohio and are grateful to be part of the vibrant Lakewood community. Our entire team is excited by the news and the vision for the company — pursuing our mission of Quality, Affordable Health Care for All.”

Multiple housing types are envisioned, including single-floor living and ownership opportunities. Of these new units, at least 20 percent will be affordable and made available to income qualifying households. In order for the developer to get financing for the affordable units — housing made available to tenants earning up to 80 percent of the area’s median income — the city will provide a 100 percent property tax abatement for 15 years.

More details have yet to be provided about preserving and restoring the Curtis Block, located at the southwest corner of Detroit and Marlowe avenues. Tentatively, the city and developer propose to retain only the decaying building’s historic façade while potentially developing a modern five-story apartment building behind it. Detailed renderings of this concept were not provided, only a largely featureless massing.

“Our partnership with the City of Lakewood for the downtown development was founded on a shared goal of community benefit for the people of Lakewood,” said CASTO President Brent Sobczak. “We have a passion for these kind of complex, mixed-use projects, and the agreement will achieve a well-planned vision to add public space, housing, office, and vitality to Lakewood’s central business district. We are excited to get under way and look forward to being a strong corporate partner in this great city.”

Current view of the development site, often referred to as "The Pit."

“The Pit,” where CASTO proposes to develop its downtown Lakewood project, is seen from the neighboring Cleveland Clinic Family Health Center. At left, beyond the Mini Pit, is the Curtis Block. The 5.7-acre site is one of the largest development site to come on the market after Cleveland Clinic closed down Lakewood Hospital and built a new medical center in exurban Avon (KJP).

“We’re working closely with the City of Lakewood and the community to create a development with a true sense of place that respects Lakewood’s character,” said Scott Simon, president of North Pointe Realty. “That includes unique public space assets for the people of Lakewood to meet and connect.”

This is the second plan submitted by CASTO. The first was submitted to the city in 2017 but it lost out to a competing plan by Carnegie Management and Development Corp. of Westlake. Carnegie withdrew from the project in a dispute with the city over who should pay for $2 million in unanticipated site clean-up costs. The city paid Carnegie a $255,000 settlement later that year to walk away without facing further legal action and so the city could begin negotiations with runner-up CASTO to secure a development agreement.

In its first plan, CASTO and Dimit proposed a largely hidden parking deck that was wrapped by townhouses. In this new plan, the parking garage is hidden only along residential Marlowe while exposed to the mostly commercial Belle. One of the commercial activities along Belle is the Cleveland Clinic Family Health Center whose visitors and workers will be allowed to use the new parking garage, according to the city’s term sheet. The parking garage is proposed to be financed in part by a tax-increment financing arrangement with the city.

Historically and currently, the city-owned property has not generated any property taxes. Upon transfer and development of the site, it will generate property taxes for the first time in decades, if not ever. Additionally, approximately 300 jobs will be retained and created on-site within five years. This along with the new households living onsite will create an estimated $600,000 in annual income tax revenue, city officials said.

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