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EDITORIAL from CRAIN'S CLEVELAND BUSINESS, 3-29-01

``It's time to think out of the (big) box

It's very difficult to understand the sudden emphasis that Cleveland Council President Mike Polensek and others are giving to the notion of putting big-box retailers in the most attractive open development land that the city has

Chagrin Highlands, the area on either side of I-271 south of Chagrin Boulevard, has been under development for years, including the time it took to win approval for and build a new highway exit. But the time and money was going to be well-spent because it would be home to new office buildings filled with people and businesses paying taxes.

There even was talk of a high-technology theme to this new office campus, which was near hotels, restaurants and the shopping malls in adjacent Beachwood.

Now, with all the infrastructure done, a move is afoot to throw up big-box retail stores. Does this council president really want to have as part of his legacy the loss of such a great opportunity for thoughtful and lasting economic development?

I certainly hope not ...''

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COLUMN from THE FREE TIMES, 3-29-01, by Roldo Bartimole

``HIGHLANDS, LOW ROAD

Dirty Details of Chagrin Highlands Development Deal

Council President Mike Polensek says he wants to probe the Chagrin Highlands deal from the beginning and let the chips fall where they may.

He declares that his hands are clean, so he has no worries about what might come out of such hearings, as yet unscheduled. But he may not like where the chips do fall and how closely he might be linked with any results.

By sponsoring legislation (lacking in clarity as to content) to alter a deal made in 1997, Polensek unwisely entangles himself with George Forbes, who has been so close to Dick Jacobs that he didn't even mind it when Jacobs - on that famous flight to New York City - dressed as a Ku Klux Klan member for laughs ...

Polensek's legislation would allow Jacobs to build cheap retail outlets where the city, via a legal settlement, won a commitment from Jacobs to build office complexes on the city-owned property to produce well-paying high-tech jobs.

Jacobs instead wants to pull a fast one, with quickie development of what are called "big boxes," large retail stores with low income potential for Cleveland land held in reserve for nearly 100 years.

Cleveland can afford to wait for a better deal, as Polensek should know. If Forbes is not influencing him, as he insists, he sure better find a convincing way to let everyone know.

The original Chagrin Highlands deal was consummated under the leadership of Forbes and former Mayor George Voinovich in the late 1980s ...

If there were close examination, the roles of the two cooperative politicians of yesteryear would raise eyebrows.

That might not sit well with Forbes, now a private lawyer at the beck and call of Highlands developer Jacobs. Or Voinovich, whose former law partner, F. Rush McKnight of Calfee, Halter and Griswold, was on the Figgie board at the time and also representing Figgie, along with Voinovich's former law director, Tom Wagner.

In addition, Voinovich as governor delivered costly state highway construction funding for the development ...

Forbes and Voinovich engineered this deal with little involvement from council. There were plenty of unanswered questions about the nature of the Figgie deal back in 1988, including a measure allowing Figgie to "cherry pick" 40 acres of land at $1 an acre ...

Judging by the documents compiled during a legal battle between White and Jacobs, the more embarrassing contents don't favor Polensek or council.

Indeed, in the 1980s, Forbes shared the knowledge that Jacobs was to be Figgie's partner with only a couple of council members, who didn't inform other members or the public.

In depositions, Forbes and Jacobs agreed that Jacobs wanted development rights as far back as 1986 for all 600 or so acres of city land.

More than 10 years later, Forbes continues to run interference for Jacobs, as he did during passage of the legislation and later dealings with White.

Jacobs' right-hand man Martin Cleary noted in a memo: "Prior to that meeting {with White}, we should have a discussion with George Forbes to see how the initial liaison with the mayor should happen."

In a deposition, McKnight testified about Forbes suggesting Jacobs as a partner in the deal while legislation was being discussed. "Yes. He {Forbes} was not taking a pushy position on it at all. I mean it was more like I've got this guy {Jacobs} over here. He'd like to talk to you about it if you want to talk to him, fine."

Harry Figgie was more direct, asserting that Forbes asked him to work with Jacobs. "And coming from one of the two more powerful men in Cleveland," said Figgie, "I took that as a directive to talk to Jacobs, and we did."

Now, what does that mean, when the man who holds the key to passing the legislation that would give you lucrative land suggests he knows who would make a wonderful partner for you? Certainly Figgie understood.

Forbes himself said he had approached Harry Figgie with the prospect of partnering with Jacobs. He was asked, "Did you leave that meeting with an understanding that the Jacobs group and Figgie would somehow be co-developers of the property?"

Forbes answered: "I left that meeting with the impression that the previous desires of Dick Jacobs about being involved in the project, wanting to develop it, would somehow be considered by him. I took him for his word, that it would be no problem, that it could be worked out."

There was also testimony that Voinovich knew of Jacobs's involvement. Said a Calfee-Halter attorney in a deposition: "I was told he {Voinovich} was aware of it."

In his deposition, Forbes was asked about this, a question his lawyer objected to: "He has already answered that he represented the Jacobs group in connection with Chagrin Highlands." But the objection was overruled, and Forbes replied: "I have had a continuous representation of Jacobs since 1990."

(That was a year after Forbes left office, when he helped bestow millions of dollars on Jacobs in subsidies and tax abatements, in addition to helping with the Highlands deal ...)

No one can tell what might happen in open hearings. Likely, not much, because few people have been through the thousands of pages of testimony in a legal matter that never came before the court. But if administration officials testify, bombs could drop ...''

CITY CHATTER from THE FREE TIMES, 3-29-01

``... It looks as if Mayor Michael White and Council President Mike Polensek have another tug of war going over moneybags developer Dick Jacobs. The two sides have been tussling for weeks over the Chagrin Highlands deal.

The new dispute involves property on the south corner of East 12th and St. Clair, sold to Jacobs by the city in 1987 for a 16-story building. Jacobs has been operating a parking lot there all these years instead of constructing the office tower he PROMISED to build.

Jacobs' deadline to finally deliver is April 1 [2001], and the White administration has introduced legislation before council to buy the land back for $386,680, as agreed in the contract.

That's 20 percent less than Jacobs paid for it. But the legislation appears bottled up. Community and Economic Development Chairman Tim Melena says he's not hearing the legislation until he gets the OK from his boss, Polensek. So the legislation sits unheard.

The city can still start default action against Jacobs. That could jeopardize another St. Clair corner property Jacobs obtained from the city with promises of constructing a 20-story building. Jacobs runs that as a parking lot behind his Galleria. If he doesn't meet his deadline to construct an office tower on either corner, the Galleria parcel can't be used as a parking lot, according to the city's deal ...''

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NEWS ARTICLE from THE PLAIN DEALER, 4-5-01, By CHRISTOPHER QUINN and MARK VOSBURGH

``White's deed puts snag in Jacobs' building plan

Developer Richard E. Jacobs hit a possibly insurmountable obstacle yesterday in his plans to put huge stores in the Chagrin Highlands ...

The obstacle is a deed restriction prohibiting warehouse-size stores on 54 acres that Jacobs has arranged to buy from Cleveland, which owns the 630-acre property. The administration of Cleveland Mayor Michael R. White imposed the deed restriction as a condition of the $6.9 million sale.

"This is news to the Jacobs Group, and they're going to have to study this," spokesman Jeff Linton said.

If Jacobs accepts the deal, city officials are ready to close tomorrow and put an end to weeks of contentious debate over the future of the Chagrin Highlands.

That debate began in January, when Council President Mike Polensek introduced legislation to eliminate provisions of an agreement requiring Jacobs, as lead developer, to build a "world-class" office park. The 1996 agreement guarantees a campus of corporate headquarters by limiting the number and size of stores.

White and suburban mayors have blasted the Polensek legislation, in part because high-paying corporations generate more income taxes than stores. The mayors also have argued that the Jacobs' plan violates the public trust because more than $100 million was spent on roads near the highlands to accommodate plans for an office park ...

The restriction covers two tracts, nine acres in Orange Village and 46 acres in Warrensville Heights, where Jacobs plans restaurants and three big stores. Cleveland Economic Development Director Chris Warren said the city wrote the deed restrictions to ensure that the land is put to its best use.

Warren said that Jacobs would forfeit the land if he signed the deed and violated the restrictions by building big stores. ''

E-mail: cquinn@plaind.com, mvosburgh@plaind.com

NEWS ARTICLE from THE PLAIN DEALER, 4-6-01, By CORWIN A. THOMAS

``City seeks to reclaim lot owned by Jacobs

Cleveland yesterday announced it has started the process to reclaim a downtown parking lot owned by developer Richard E. Jacobs.

Standing yesterday near one of Jacobs' parking lots, Chris Warren, the city's economic development director, said that on Monday a notice of default was sent to Jacobs because he did not fulfill an obligation to build a 16-story office tower on the land at the southeast corner of E. 12th St. and St. Clair Ave.

The city's move against the lot would cost Jacobs an estimated $400,000 to $500,000 a year in lost parking revenues. But Warren said the move was not related to a dispute between Jacobs and Mayor Michael R. White over development of the Chagrin Highlands tract in the eastern suburbs.

Warren said Jacobs has 60 days to respond to the notice. If Jacobs contests the notice, Chicago Title would hold the deed until a court ruling.

Jacobs had until last Sunday to develop the land, which he purchased in 1987 for $483,350 ...

A buyback provision gives the city the right to buy the land back at 80 percent of Jacobs' price ...

Warren said Jacobs has missed several deadlines within the contract and has failed to reply to numerous letters regarding the development agreement.

Jacobs was out of town and unavailable for comment.

Legislation to get the funds to buy the land was submitted to Cleveland City Council March 16. The legislation is currently on hold ... ''

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NEWS ARTICLE from THE PLAIN DEALER, 5-2-01, By LILA J. MILLS

``Warrensville sets limits to keep out big boxes

WARRENSVILLE HEIGHTS - The city ... strengthened its commitment to keep "big box" retail stores out of the Chagrin Highlands office park.

City Council unanimously approved zoning amendments that limit the size of retail and entertainment establishments that can be developed at the southwest quadrant of Harvard Rd. and Interstate 271.

"We want to ensure that we have a quality development, '' and this is one of the necessary steps," said Mayor Marcia Fudge.

In January, Jacobs said he would like to build four giant retail stores in the Warrensville Heights portion of Chagrin Highlands, which includes 630 acres in Warrensville, Beachwood, Orange and Highland Hills. The property is owned by the city of Cleveland.

Several suburban mayors and Cleveland Mayor Michael R. White opposed the idea. They said "big box" stores would not bring as much income tax revenue into their cities and would saturate the area with retail. Chagrin Highlands is minutes from Randall Park Mall and Beachwood Place.

The amendments adopted last night will limit the size of retail establishments to 50,000 square feet.

Entertainment establishments, like movie theaters, will not be able to exceed 75,000 square feet.

"This is not a change in zoning," Law Director Otha Jackson said yesterday. "This is a mere clarification of where Warrensville is going as far as development of that parcel is concerned." ...

In the 1980s, Jacobs said he planned to build a first-class corporate and biomedical park at Chagrin Highlands ...

The mayors of suburban cities in and near Chagrin Highlands have vowed to fight legislation introduced in Cleveland City Council that would allow Jacobs to build the stores on 46 acres in Warrensville Heights ...

Last month, White's administration attached a deed restriction to the sale of 54 acres that Jacobs had arranged to buy from Cleveland, including the parcels in Warrensville Heights. The restriction prohibits retail stores there. ''

E-mail: ljmills@plaind.com

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CITY CHATTER from THE FREE TIMES, 6-21-01

``Jacobs move backfires

Dick Jacobs' outfit apparently thought it threw an irretrievable monkey wrench into the city's plans to take back two downtown blocks formerly owned by [Cleveland].

Jacobs, using the site for parking, was to build two large office structures on the land. But when his 14-year hold on the properties at East 12th and St. Clair ran out recently, Mayor Michael White ordered the land taken back by the city, as per the sale agreement.

Then the Jacobs Group wrote Council President Michael Polensek warning that the agreement - which the city thought would cost about $1 million - would relieve the city treasury of about $3.9 million because other land privately owned by Jacobs had to be purchased along with the two city properties.

Economic Development Director Chris Warren told Polensek that the city was "delighted to learn that the developer concedes the city has an additional right to purchase" all the land in the area. Warren noted that "together {the land} constitutes a highly desirable whole block for redevelopment."

Even without development, Warren says continuing to use the properties for parking would net the city $1 million a year in profits. ''

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CITY CHATTER from THE FREE TIMES, 11-22-01

``... Secret wars -- Espied at [Cleveland] City Council: Dick Jacobs lobbyist Joe Rice trying to ply from council members a concession for Chagrin Highlands, the huge city-owned suburban tract.

As always, Dick wants big-box retail on the property he leases ... And as always, that would erase the dream of high-end office development on the site, which is what the lease currently requires.

The city spent millions in court to force Jacobs to conform to the lease, but that hasn't stopped him from routinely pressuring council to change the requirement altogether. With council in its current makeup down to its last days, beware the midnight giveaway ... ''

[The taxpayers have paid over $150 million for an interchange on I-271 and other road improvements to accommodate Jacobs' Chagrin Highlands development.]

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