CLEVELAND, Ohio — An outlet-mall landlord that’s been eyeing downtown Cleveland for years says the market is an obvious void when it comes to name-brand, discount shopping.

“We spend a lot of time looking for sites around the country, and it really was the hole in the doughnut,” said Gary Skoien, president, chairman and chief executive officer of Horizon Group Properties Inc. “Downtown Cleveland has no retail, basically, practically speaking.”

Horizon, a small but established outlet owner and developer based in Illinois, is in talks with retailers about a two-level mall that could rise at the edge of downtown, on the eastern end of the massive Lakefront Municipal Parking Lot. Those leasing conversations are occurring as downtown Cleveland’s population approaches 20,000 people, according to recent figures from the Downtown Cleveland Alliance, a nonprofit group that hopes residential growth will beget retail growth in a center city that has struggled with empty storefronts for decades.

Marketing materials for the Outlet Shoppes at Cleveland describe a 323,000-square-foot building nestled between South Marginal Road and the Cleveland Memorial Shoreway. Leasing plans show large entertainment and restaurant spaces at either end of the mall and a food hall in the middle. Placeholder tenants on those plans — examples of brands that might pop up — include Coach, Nike, North Face, Polo, Timberland, Tommy Hilfiger and Tory Burch. No leases have been announced.

Horizon aims to open the project as soon as 2022.

A site plan being used to market the Outlet Shoppes at Cleveland shows the potential location of the two-story mall, on the eastern end of the Muni Lot. The parking lot to the east of the building would replace unused, city-owned tennis courts.CBRE Group, Inc.

During a recent interview, Skoien said the timeline depends on discussions with two key parties: potential tenants and the city of Cleveland, which owns the property.

Skoien wouldn’t say how many retailers have committed to opening at the mall. And he wouldn’t put a price tag on the development. But, he said, “it’s in excess of $100 million.”

Horizon’s interest in Cleveland first publicly surfaced in 2016. At that time, the company was circulating plans for a four-story building, including a 1,400-car garage, on a parking lot just south and west of Burke Lakefront Airport. That land, north of the Shoreway, also is city-owned.

Construction near the downtown lakefront is challenging. The land — Burke, North Coast Harbor, the Shoreway and even the Muni Lot — once was part of Lake Erie. About a century ago, Cleveland created new ground by piling residents’ cast-off furniture, other household trash, sand and dirt dredged from the Cuyahoga River into the lake, driving the downtown coastline north.

That history creates legal complexities — building on the land requires lease agreements with the city and the state — and technical complications related to the soil.

That’s why Horizon pivoted from the 20-acre Burke lot to 36 acres on the opposite side of the Shoreway, where the company can build a less costly, lower-slung outlet mall with surface parking instead of a garage. The mall would occupy a little-used end of the 2,300-space Muni Lot, an area that’s packed only when tailgaters flock downtown for Cleveland Browns games.

A new parking lot would replace unused city tennis courts that sit just east of the Muni Lot, on the other side of a freeway ramp. Horizon’s plans show a pedestrian bridge over that ramp, leading to the shopping center’s second floor.

The potential 36-acre site for the outlet mall includes unused tennis courts that sit just east of the Muni Lot. Under Horizon's plans, a parking lot would replace the tennis courts.Lisa DeJong/The Plain Dealer

It’s unclear how advanced the developer’s negotiations are with city officials.

In an email, a spokeswoman for Mayor Frank Jackson said, “We have an understanding of the project and we are reviewing the proposed development plan. We may be able to provide additional details at a later date.”

Skoien said Horizon, which is likely to develop the project through a joint venture with an unnamed partner, has been “working cooperatively” with the city. “It’s their property,” he said, “so we ultimately would need to have a lease in place.”

Building anything significant on the Muni Lot also would require substantial investments in utilities, such as water, sewer and natural gas lines and telecommunications infrastructure. Those costs — and the question of how to divvy up the bill between private developers and the public sector — have been an impediment to building on and near the lakefront for decades.

Skoien acknowledged that Horizon has asked Cleveland for financial help, but he would not discuss specifics.

“We’ve never built an outlet center that didn’t get government assistance for the reason that it really is different than other retail,” he said, stressing that the company expects the mall to attract not only downtown residents but also tourists, convention attendees, visiting families of patients at major hospitals, families of college students and Northeast Ohio residents who do much of their outlet shopping in other states today.

“Every place is different,” Skoien said of public incentives for outlet malls. “We’ve had rebates of sales tax. We’ve had rebates of property tax. We’ve had direct grants, and they’re all across the board. … Most municipal officials and economic-development folks understand the difference between building this and a Walmart or a Costco or something.”

The closest outlet malls to Cleveland are older properties more than 30 miles away, in Aurora and Burbank. Horizon studied suburban sites and looked at existing downtown retail space, including the part-empty Galleria on East Ninth Street. But building a ground-up project that’s in an urban setting without being in the center of downtown emerged as the best option.

“The response to this project has been as strong or stronger as any project we’ve taken to market,” Skoien said. “Retailers get it right away.”

The outlet mall would sit at the edge of downtown Cleveland, on the opposite side of the Shoreway from Burke Lakefront Airport. A development on the property would require a long-term land lease between Horizon and the city of Cleveland, which owns the land.Lisa DeJong/The Plain Dealer

Rich Moore, a longtime real estate investment trust analyst, said the model of building discount shopping centers in cornfields and expecting shoppers to drive long distances for deals is outdated. The most successful outlet centers are increasingly in places that appeal to tourists.

“The traditional outlet center is struggling to stay relevant,” said Moore, the managing partner of a Solon-based real estate hedge fund called Lionhead Capital Management. “I would think that whoever’s planning a new one, you’ve got to think in terms of where you’re going to get these shoppers from. The international, the tourist, shopper is still your best bet.

“I also think it’s interesting what you’re going to put in there,” he added. “Outlets have always been majority apparel. Now there’s so much apparel. There are so many different kinds of apparel, and so many ways to get apparel online, that just apparel — I don’t know that that’s a formula for success.”

In a departure from that old-school, clothing-centric outlet model, the CBRE Group Inc. real estate brokerage is marketing two entertainment spaces, one 30,000 square feet and the other 26,000 square feet, and a pair of restaurants, totaling 10,500 square feet, at the project.

Joseph Khouri, a first vice president at CBRE in Cleveland, said the mall is attracting “significant” interest from potential tenants, though he wouldn’t name names.

“From a leasing perspective,” he said, “it absolutely is very, very real. … It’s a surprising amount of progress that’s happening behind the scenes.”

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