Local nonprofits’ bid to acquire Shaker Square back on table — with meter running

CLEVELAND, Ohio — With a new city administration in place, local nonprofits continue to make their case to acquire Shaker Square. The landmark has been in court-ordered financial receivership for more than a year now.

No action was taken by the previous City Council at the end of 2021 on a plan for a $12 million loan from the city to Cleveland Neighborhood Progress (CNP) and Burten Bell Carr Development Inc. (BBC) to pay off debt and assume ownership of the historic commercial and transportation hub.

But that proposal now looks like it’s back on the table.

In fact, if all goes as planned, the deal could be back before City Council later in February. If it gains approval this time around, the nonprofits could take over with a public-private partnership early in the second quarter of this year.

“That’s the earliest that the transaction could take place, although we were shooting for the end of March,” CNP consultant Terri Hamilton Brown told the Shaker Square Alliance at its Feb. 3 Zoom meeting.

Serving as the treasurer of New Village Corp., CNP’s real estate arm, Brown added that “further delays equate to additional dollars, to the tune of about $3,000 a day” in accumulating interest and fees on the property that they are trying to keep from going to full foreclosure and auction.

Brown, BBC Executive Director Joy Johnson and CNP President and CEO Tania Menesse have renewed talks with Mayor Justin Bibb and staff; new Councilwoman Deborah Gray, whose Fourth Ward includes the Square; as well as Council President Blaine Griffin, who represents the abutting Sixth Ward and lives in the Larchmere neighborhood.

Gray had a real estate development consultant look over the proposal, leading to renewed confidence about its structure, including a new facet pitched by Brown that’s “really taking flight,” Johnson noted.

“We asked if $3 million of the money we paid back could go back into the neighborhood, rather than into the city coffers — (Gray) really liked that,” Johnson said. “We need to figure out how to get that in writing.”

Gray planned to take a tour of the surrounding neighborhoods to look at areas of potential investment.

“She just needs to learn more. It’s a tough situation, because she’s been in office for about a month,” Johnson said. “She wanted to be a good steward of the public trust and make sure she understood it.”

On that note, the nonprofit officials assured the Alliance in January that a 2019 proposal to close off Shaker Boulevard — a major concern for merchants and residents around the Square with the proposed new ownership — remains shelved “indefinitely.”

New concerns from proponents of the local ownership deal revolve around out-of-town investors buying up apartment buildings around Shaker Square for millions.

It prompted local residents in “The Morelands Group” to issue a statement through the Shaker Square Alliance urging the city to get off dead center.

“This area has been ravaged by real estate speculators buying, trading, flipping and abandoning once highly valued properties,” the Morelands Group statement read. “This degree of plunder is an indicator of the risks that exist to Shaker Square.”

Former Cleveland councilman and current Shaker Square resident Jay Westbrook also pointed to the 2016 sale of Severance Town Center in Cleveland Heights for $10.5 million by way of an online auction.

“This could happen at Shaker Square, and we’re not just crying ‘wolf’ here,” Westbrook said last month. “As this new administration kicks the tires on the proposed legislation, they really need to be concerned about the level of risk avoidance.”

Johnson and Brown noted that meetings were continuing this week through various committees on Cleveland City Council.

“Now that the conversation is more positive, we have to work on the transaction,” Brown said, adding that as time lapses, “whatever the number was that we thought we could buy it for, it keeps getting higher.”

Also tuning in to the Feb. 3 Shaker Square Alliance meeting was Cleveland’s Building and Housing Director Sally Martin — formerly the housing director in South Euclid.

“There are challenges in the area that have not been addressed by the City Building and Housing Department, and that will be one of the first orders of business when I get into the office,” Martin told the Alliance at the outset of the meeting.

“I hope that by becoming involved with this group, that can change.”

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