CRAIN’S CLEVELAND BUSINESS
April 24, 2023
Hundreds of workers once filled the factory floor at a General Electric Co. plant in Euclid, where the company made lightbulb filaments and other metal products.
Now officials in the inner-ring suburb hope the 27-acre property, off Tungsten Road near East 222nd Street, can become an economic engine again.
Developer Weston Inc. purchased the real estate from GE last year and began razing the buildings in late March to make way for a new, 434,000-square foot warehouse. The $47 million project is a speculative one, aimed at manufacturers or distributors who need to move quickly.
“This is really the only new construction on this scale that we have going on,” said Callie Cripps, the city’s economic development division manager, who described the former GE site as one of Euclid’s largest redevelopment opportunities.
“It changes the landscape of Euclid by not having these dilapidated buildings,” she said.
GE closed the plant in 2017 as new technology supplanted the incandescent bulb. A few years later, the company sold its storied lighting division, based at Nela Park in East Cleveland.
The Euclid complex, which totaled more than a dozen buildings, never formally hit the market. GE auctioned off or scrapped the equipment and furniture and cleared out hazardous waste in 2018, according to public records.
The company initially sat on the property, rebuffing inquiries from prospective buyers.
Then a few key things changed.
In 2019, GE started rethinking its approach to its idled, contaminated properties. The company focused on revitalizing brownfields in low-income and majority-minority communities, where residents are exposed to more environmental harms and experience lower quality of life.
Using mapping tools from the U.S. Environmental Protection Agency and the Council on Environmental Quality, GE identified more than 50 underused properties to target. In Cleveland, the company is tearing down two former lighting plants on the East Side, in the Midtown area and the Collinwood neighborhood, to prepare the land for redevelopment.
Such efforts are part of GE’s environmental justice initiative, a company spokesman wrote in an email. In Euclid, he added, “we are pleased that Weston Inc. plans to redevelop the property and return it to productive use for the benefit of the Euclid community.”
In 2021, the Ohio General Assembly allocated $500 million to brownfield remediation, demolition and site revitalization. New programs offered grants to developers and county land banks willing to take on challenging properties, from blighted factories to abandoned houses.
Cripps, a few months into her job, made overtures to GE through a local attorney, Joseph Koncelik of Tucker Ellis. And she reached out to Weston, a Warrensville Heights-based developer with a vast industrial portfolio and experience reviving brownfields.
“Sometimes, timing’s everything,” she said.
Weston struck a deal with GE. After putting the former Tungsten Products Plant under contract, the developer won a $4.5 million state brownfield grant in June. Cuyahoga County agreed to provide up to $600,000 in matching funds, in the form of a forgivable loan.
Public records show that Weston paid only $100,000 for the property in October. That price reflects the considerable costs of clearing and cleaning up the land. A budget submitted to the city shows $6 million in anticipated remediation expenses.
The main manufacturing building, described in old newspaper articles as a “filament factory,” dates to 1931. Workers at the complex made tungsten wires used in light bulbs and electronic tubes, along with tungsten and molybdenum powders, ingots and gases, including argon.
Weston plans to take the property through the Ohio Environmental Protection Agency’s Voluntary Action Program, which offers owners a path to clean up brownfields and secure legal releases from liability.
The developer expects to preserve only one building, a dormant electric substation located at the back of the site. Weston hopes to reactivate that substation to offer extra power capacity to the new building — a feature that potential tenants increasingly ask about, said Jason Stump, the company’s development project manager.
David Stecker, a managing director in the JLL brokerage’s Cleveland office, said that hefty power needs are one of the top trends he’s seeing in industrial real estate, along with increased demand for rail access and the ability to tap massive amounts of water.
“With a deal like this and the utility infrastructure, they have a really great chance of seeing groups that are new to the city, county and state,” he said of Weston.
Demolition, including the removal of old basements and underground tunnels, will wrap up in late June or early July, Stump said. The new building, which Weston is calling Tech Park 90, should be ready for tenants in mid-2024.
Weston has been working with the city on sustainability initiatives at the project — a priority for Euclid officials. The developer plans to crush concrete slabs and bricks from the old buildings and use them to fill holes on the property, including former basements. Cripps said she’s also talked to the company about the possibility of installing solar panels on the warehouse’s roof.
“There’s a lot of cooperation to be creative with them,” she said.
The city is considering using federal pandemic-recovery money, from the American Rescue Plan Act, to provide a grant for the project. Cripps said the amount of that funding has not been set.
The new development qualifies for 15 years of 100% property-tax abatement under a longstanding city program.
At the end of the first quarter, the Newmark brokerage’s local office tallied up more than 4.2 million square feet of industrial construction projects scattered across Northeast Ohio. That’s the second-largest total ever, the company noted in an April research report.
“However,” the Newmark report says, “progress has slowed, construction starts (are) delayed and proposed projects are in limbo, due to a post-pandemic market recalibration and uncertainty due to the burgeoning banking crisis and its impact on commercial real estate.”
Brokers and developers will be watching closely to see what happens over the next year, as new buildings debut. Stecker, of JLL, said that leasing activity remains robust, with more demand than available space and healthy rent levels. Speculative properties like Weston’s Tech Park 90 have an edge. Many tenants can’t wait 18 months for a construction project.
Euclid also offers convenient access to Interstate 90 and a pool of potential workers. Proximity to labor is driving a lot of site-selection decisions across the region, Stecker said.
“I have full confidence that Weston has the connections,” Cripps said of the outlook for filling the building, which could accommodate up to four tenants. “And we want to help. We’re not going to sit passively and have them do all the work. We’re going to be promoting and marketing and talking about this site to anyone who’s willing to listen.”