The Vision Thing

[Jim O'Bryan]

It would also bear noting, that I said to the Mayor, the group that must not end up with the private monies in the LHF and new Non-profit, must not be the very people that are now controlling it for one simple reason. ZERO success.

I am not a praying man, but God help us.

.

Mr. O'Bryan,

These two sentences make everything else you wrote superfluous.

1. The same "ZERO success" folks are in charge of the "Vision Thingy" and will continue to be in charge---- their perpetual and successive failures will soon been on display in the next two chapters (FPTF & Fitz Development) of the book Mr. Kindt says is only half written.

2. The only hope we have is divine intervention---and I am extremely proud of you that you have come the light and are now relying on God! This is truly "Good News" for Lakewood!

Brian

When humans in the real world turn to myths and mythology out of real necessity I feel we are really doomed. Especially as the churches of Lakewood fail and come under the wrecking ball or redevelopment into bars and entertainment areas. While the ancient order of Masons, and public schools on Sunday become the new anchors for the Neue Religions. But when you bring up generations to only see the possibilities in recycling I suppose it is to be expected.

One thing that usually bears fruit and is always worth considering is past history, and records of accomplishment. Their big move was to enter Lakewood in a Jiffy Peanut butter contest for "Best City and why?" they didn't land that prize either. 99% of the things the community would cite as their successes were co-opted from other sources, where they merely took the credit for doing it an awarding themselves ribbons and accolades to confuse, and hide the truth. aka Lakewood civic leaders way.

I have zero doubt that soon we will hear an announcement that Lakewood will be awarded that we are a **** Zone, and as such our future will be bright, and we can become a healthy city dedicated to bike lanes, walk-ability, parks, and entertainment. The awards will flow, the dinners and balls will be had, and we will be educated to the fact, that in the past we only thought that, now, NOW thanks to their divine leadership and mentoring it is really true.

A well known Civic leader used to ask me why I get so upset with the charades. "Jim they have accomplished nothing, let them have their parties. Let them take the faux accolades, who does it hurt?" Well I fear it is about to kill this city and squander the last and only real chance we have.

Let us pray.

.

[Bridget Conant]

Remember the Medical Mart?

Never panned out like it was presented to the voters. It’s a big, mostly empty, expensive building that we are stuck with.

That’s the problem with the Lakewood development - they promise more than they will ever be able to deliver.

No one outside of Lakewood will come here to go to a pet store or Mitchell’s Ice Cream - Avon, River, and Westlake have their own Mitchell’s so no one is driving here for ice cream.

There is no “anchor” in this development that will draw enough people from outside our own boundaries. Though the mayor insisted that “national” developers were interested in the parcel, none appeared. Nor are there “National” stores or chains interested. The development they’ve proposed will require a bigger draw to make it a success. That’s the problem. Their idea of what what they want there and what it will do isn’t borne out by what they’ve presented.

[Jim O'Bryan]

That’s the problem with the Lakewood development - they promise more than they will ever be able to deliver.

Your typical A+B thinkers. They are incapable of running the entire equation.

During the very ill conceived "Westend strip mall" project, not only did they never see the death of retail, they were so set on doing it, doing anything to play developer they didn't even realize the chosen developer was a failure, bankrupt and being sued by the City of Cleveland for $25 million dollars. And this was another early warning signs on this group. They asked the Mayor of Cleveland, Jane Campbell to hold off on the lawsuit until after the residents of Lakewood voted on their strip mall. Lies, cover-ups, misinformation their hallmark way back then. What would have happened is the developers would have been awarded $20 million, bought their way out of the Cleveland lawsuit and let our two attorneys fight them for the money. Hell for all we know, there might have been no safeguards even written into the contract. That is how desperate they are, just to play developer, just to play and pretend. The never did the full equation, or worse they did and were prepared to gamble. Of course what was private land before and private assets are now our land and our assets.

Nearly the same player on that adventure sit in the driving seat of this adventure. Now after being cock-blocked errrr development blocked for a decade their desperation to develop something, anything before they die has taken on insane proportions. Such insane proportions they worked to paint the entire city into a corner, make city council complicit, if not co-conspirators, and have us on the edge of a disaster which is being proven hourly, they simply cannot deliver on because they could never do the equation.

As their biological clocks ticked away, and they approach the golden years if not the ends of their lives they needed to do something immediately. The ten years letting Lakewood another $100 million and time to study could not figure into their plans. They had control of the groups, most of City Council, had laid the ground work for years with way-finding, community studies, and even branding for the land and money they coveted. Not because they had a good idea, hell we are finding out they really didn't even have an idea. But simply to finally develop something, anything with other peoples money.

It's nuts.

.

[Mark Kindt]

Thank you, Mr. O'Bryan for your thoughtful analysis.

My analysis assumes that during the past 5 years the city administration did two things:

1. Failed to enforce the remaining decade of obligations to run the hospital under the contracts related to Lakewood Hospital; and,

2. Abandoned or tacitly rejected the other viable offer from Metro Health System to operate Lakewood Hospital as a going concern.

This came with a variety of concomitant losses that have been previously well-described in the Lakewood Observer and the Observation Deck, including the diffusion to other purposes for foundation or association funds previously used to support the hospital or associated with the hospital.

The current city administration proposal for a mixed-use commercial development will not replace those losses, though it may have some other relatively modest benefits.

However, as I will shortly demonstrate, those relatively modest benefits come at high cost in terms of the use of existing public assets and remaining funding from the City.

Obviously, a hospital would be the continued optimal use for this parcel of real estate given all of the "knock-on" benefits that you describe.

(The overall economic losses to the City of Lakewood from the closure of the hospital was addressed in The Lakewood Observer in June 2016.)

Finally, I will suggest to Mr. Mager that he may have violated one of the rules of this thread. In this thread, he only has 5.7 acres to use for redevelopment.

[Brian Essi]

Now For A Sad, But Comic Interlude

"Who is the largest employer in Lakewood?"

Guess --

In 2017, the consultant for the City of Lakewood is telling the city administration and the citizens of Lakewood that the largest employer in the City of Lakewood is the Cleveland Clinic Foundation (!) Yikes!

Yikes Indeed!

By then, the consultant must have known the CCF employees at the Lakewood "ER" were reduced to about 125 and New York Life was gone.

The fact that two taxpayer funded public entities are now the largest employers in the Peoples' Republic of Lakewood underscores Mr. Richard Baker's concerns about how they should be counted since we taxpayers are paying all salaries of those employees. I am curious as to the answer to Mr. Baker's question as to how many of those employees actually live in Lakewood (or can afford to live here)?

It is truly ironic that 100% of City Hall and 80% of the School Board helped destroy the largest employer in Lakewood that didn't cost taxpayers a dime by using the argument that the City should not be involved in healthcare. Is the taxpayer subsidized CCF "free medical space, equipment and utilities" in Lakewood High School not government involvement in corporate healthcare?

Sorry for the thread drift.

[Mark Kindt]

In this 3-year U.S. Department of Housing and Urban Development report, two federal economists (T. Kukawski, T. McDonald) forecast demand for rental units in Cuyahoga County at a required 2,635 units to satisfy estimated demand.

We can see that if we allocate Lakewood's share of this demand by its share of Cuyahoga County population (4.13%), then Lakewood's share of the demand is 109 units over the three year period.

This is an annual demand of about 36 or 37 new rental units. It may actually be less when we look at other data in this HUD forecast.

The forecast states that the entire demand for the first two years of the forecast has already been met by the 2,100 units that are already under construction, leaving only a balance of 535 units not yet built.

The Lakewood share of the units to-be-built in the forecast would be 22 or 23 units.

Based on these figure we can conclude that the current demand for apartment units in Lakewood has been more than fully met by current construction of the 144 units at Lakewood Center North.

There is no specific need for the conversion of the former hospital site into apartment units.

More importantly, there is no market failure that would come anywhere near justifying the proposed public subsidies for these proposed apartments.

Lakewood's population is slowly declining and the demand for new apartment units can be met by the ordinary business activities of builders without the extraordinary intervention of the City of Lakewood.

Digging A Little Deeper Into The City's Consultant's Report

Let's start with the federal estimates first. There is an annual demand for about 37 new rental units per year in Lakewood.

Now, I want to unpack some of the numbers on this slide from the City's consultant's market study.

[Mark Kindt]

First, let's note several things about the Market Study:

1. It includes both the populations of Brooklyn (10,828) and Linndale (176) in its Lakewood sub-market. (This has the effect of inflating the Lakewood sub-market by about 20%.)

2. It seems to show even less demand for new apartment units than the federal market study.

In order to unpack these numbers we need to do several things.

First, we need to back-out the owner-occupied housing units and also note that they have done a 10-year projection between 2016 and 2025.

They estimate a total of rental units at 4,405 (2016) barely growing to 4,639 (2025). This is an estimated 234 new rental units across this period in their 15-min range study area.

This shows the need for about 24 new rental units per year.

Using both studies, we can present a picture of what the demand looks like for new apartment units in Lakewood and nearby.

Low range: 23 units/year (federal estimate)

Mid range: 24 units/year (city market study)

High range: 37 units/year (federal estimate)

Average demand is 28 units/year.

[Mark Kindt]

If the hospital site redevelopment project is completed by 2020, then at this rate (28 units/yr) the proposed 200 apartment units would not reach full capacity until 2026.

And, this argues that all new apartment rentals would be captured by the proposed development(!) Highly unlikely.

Neither the U.S. HUD market study, nor the City's own market study provide significant support for the proposed site redevelopment project.

Clearly, the demand for new apartments can be met by ordinary market forces.

[Brian Essi]

Mr. Kindt,

I truly enjoy your cogent analysis and writing style.

The table in your post above was "based upon key socio-economic drivers and feedback from from interviews with real estate professionals..."

In my 30+ years of advising clients concerning business transactions, I am unusually weary of general statements like these in "studies" upon which business and financial decisions rest. In addition to wanting to know who ordered the study and how the consultant was chosen, I would certainly want to grill the consultant as to the objective evaluation of these "drivers" and "interviews."

Given what we've learned about the "who" and "what" of the Subsidium and Huron Consulting engagements and processes employed, may I suggest that you have been very generous in your analysis that arrives at the 28 unit per year figure.

[Mark Kindt]

If the hospital site redevelopment project is completed by 2020, then at this rate (28 units/yr) the proposed 200 apartment units would not reach full capacity until 2026.

And, this argues that all new apartment rentals would be captured by the proposed development(!) Highly unlikely.

Neither the U.S. HUD market study, nor the City's own market study provide significant support for the proposed site redevelopment project.

Clearly, the demand for new apartments can be met by ordinary market forces.

This next slide tells us that there are already at least 144 new apartment units (Lakewood Center North) already in the pipeline to serve the same period (thus covering the demand for the next 5 years.)

[Mark Kindt]

This means that Lakewood is likely to have two new downtown apartment buildings with only partial occupancy until 2030.

[Mark Kindt]

Using both studies, we can present a picture of what the demand looks like for new apartment units in Lakewood and nearby.

Low range: 23 units/year (federal estimate)

Mid range: 24 units/year (city market study)

High range: 37 units/year (federal estimate)

Average demand is 28 units/year.

Thinking about what Mr. Essi said about over-estimation, I went back to double check the figures and had to revise these ranges:

Low end range: 7 units/year (derived from city market study)

Low end range: 23 units/year (derived from federal market study)

High end range: 21 units/year (derived from city market study)

High end range: 37 units/year (derived from federal market study)

Average Annual Demand: 22 units/year

Given this rate approximated from two separate government studies, we can estimate that it will take almost 16 years (on average) to reach capacity at Lakewood Center North and the proposed Carnegie development at the former hospital site. It could be better or it could be worse, depending where the demand actually hits in these ranges. Even at 37 units/year, full capacity is almost a decade away.

[Mark Kindt]

Again, In The Category Of Sad, But Comic

The hospital has already been closed for a year AND here we see the city administration's OWN consultant telling them that all the job growth for the next decade is going to be in -- wait-for-it -- HEALTH CARE (!!!)

[Mark Kindt]

Again, let me summarize my arguments up to this point before we move on to some tax subsidy and other tax-related issues:

Argument No. 1. There is a strong qualitative argument that the former hospital site be redeveloped for purposes that are broadly public, civic, beneficial and innovative with high on-site employment levels.

Argument No. 2. The quantitative data provided by the federal government does not support the proposed construction of new apartments at the former hospital site.

Argument No. 3. The qualitative data provided by the City's own consultant is even less supportive of the proposed construction of new apartments at the former hospital site.

[Stan Austin]

Even though my"proposal" for a Tide Laundromat may be tong in cheek, it looks like Mark's analysis if far more sophisticated than any than have been offered by supposedly reputable outfits.