gateway-district-parking-lot

This Gateway District parking lot, bordered by East Fourth Street, Prospect Avenue and Huron Road, is part of a portfolio that Stark Enterprises and J-Dek Investments Ltd. acquired Thursday from a California parking-lot operator. The local investors have assembled a 3-acre site near Quicken Loans Arena for a development that could include street-level retail, apartments, structured parking and offices.

(Gus Chan, Plain Dealer file)

CLEVELAND, Ohio -- Northeast Ohio investors paid $26 million this week for a downtown Cleveland parking portfolio, laying groundwork for a major development project in the city's Gateway District.

Stark Enterprises and J-Dek Investments Ltd. bought five properties Thursday from the L&R Group of Companies of California, public records show. In separate transactions, the investors paid other landowners an additional $2.75 million for two small parcels that round out a development site just north of Quicken Loans Arena.

The Plain Dealer first reported on the potential real estate deals in August. On Friday, Cleveland developer Bob Stark said he envisions a $300 million project - plus or minus $50 million - on the Gateway District land, a 3-acre block bounded by Prospect Avenue, Huron Road and East Fourth Street.

The details and design are in flux, but the basic elements could be 500 apartments, 200,000 square feet of offices, 150,000 square feet of stores and restaurants and nearly 1,500 parking spaces tucked into garages.

"We laid out millions of dollars yesterday. We got rid of a huge impediment to our environment from out of town," Stark said of the land acquisitions, which mark L&R's exit from downtown. "This is not speculation. It's the real deal."

The L&R portfolio included:

* A dilapidated parking garage at 611 Huron Road. Stark hopes to demolish that garage as part of the Gateway project.

* A 246-space parking lot between Prospect and Huron. That land will be part of the development site.

* A small parking lot at East Fourth Street and Prospect Avenue.

* The empty Herold Building, at 310 Prospect Ave. L&R and the city have been battling over the historic building, which is condemned. Stark plans to meet with city officials and neighborhood leaders to find a solution to the building's legal and physical woes.

* A large parking lot on West Ninth Street in the Warehouse District. Stark and J-Dek have no immediate plans for that property.

Rico Pietro of Cushman & Wakefield/Cresco Real Estate, who represented L&R, couldn't be reached for comment Friday.

A conceptual massing study shows the potential scope of the Stark Enterprises project planned for downtown Cleveland's Gateway District. The site is located between Prospect Avenue and Huron Road, east of East Fourth Street.

The footprint for Stark's development, dubbed "nuCLEus," also includes a small Prospect Avenue building, home to a clothing store called Mr. Albert's Men's World. That's one of the other parcels the developers bought Thursday, along with a strip of land at the corner of a parking lot.

If the city signs off, demolition could start early next year, after the development team wraps up design work.

Construction might begin in March. Stark acknowledged that there will be a stretch, ideally as little as six months, when parking options in the Gateway District will be reduced by several hundred spaces. But the first phase of the project will more than replace that lost parking, he said.

"Our intention is to open up a portion of this development, probably most of the parking part of it, before the Republican National Convention," Stark said, "and then open the rest of it up in late 2016 or the spring of 2017."

Of course, that all depends on financing and tenants.

Stark said he and J-Dek, a Solon real estate company, have lined up private debt and equity. But they're seeking a share of the casino revenues that Cuyahoga County has earmarked for downtown projects. And they're likely to pursue other public aid, such as property-tax abatement and help with infrastructure costs and site cleanup.

"We clearly have a lot of work to do to line up the necessary public assistance," said Stark, who wouldn't discuss details of the potential public ask.

He's keeping quiet about possible retail tenants, too.

The developer behind Westlake's Crocker Park and the high-end Eton Chagrin Boulevard shopping center in Woodmere, Stark hopes to lure national stores and restaurants downtown. Marketing materials for the Gateway District project describe towering buildings between Prospect and Huron, flanking East Sixth Street, which would become an intimate alley lined with shops, outdoor dining and small bars.

"We're very pleased with the level of interest and - more importantly - the recognition on the part of the nationals that Cleveland has arrived," Stark said, "that downtown Cleveland has arrived."