Shoreway Commerce Park: Bringing Industry Back

Work has begun on the development of the 27-acre Shoreway Commerce Park (SCP), a $20 million project that will turn a partially occupied former truck manufacturing site into a logistics and distribution hub for the Cleveland metro area.  NDC's HEDC New Markets structured financing that included its own $9 million New Markets Tax Credit Qualified Equity Investment (QEI) in the project, combined with an allocation of $6.235 million from the Cleveland New Markets Investment Fund II (CNMIF) in a "side-by-side" transaction, resulting in an investment of $15,235,000.

Shoreway will be the lead project in an International Trade District (ITD) to be developed around the proposed relocation of the Port of Cleveland (four miles east of the existing port).  In addition to the new port, the International Trade District will be supported by intermodal logistics and distribution facilities with outstanding truck/highway and rail access: less than a quarter mile from Interstate 90 and with its own railway spur leading to main freight rail lines.  The project is also located within a half mile from the new port, and four miles from downtown.  An additional 39 acres adjacent to Shoreway have been identified for future ITD development.

"We are now in the process of demolishing several hundred thousand square feet of obsolete, unusable industrial space, rehabbing an additional 400,000 square feet, and will begin bringing new infrastructure to serve the facility this summer," reports Mitchell Schneider, President of First Interstate and Shoreway Logistics, LLC, Shoreway's developer.

The site that has become the Shoreway Commerce Park was once home to truck manufacturer White Motors from the early 1900s until its bankruptcy in the 1980s. Since the company's closing, the site has been only partially occupied for office, light industrial and bus depot uses.

The loss of White Motors jobs brought economic decline to the park and surrounding neighborhood. The census tract that includes Shoreway Commerce Park has a poverty rate of 41% and an unemployment rate that is nearly six times the national average.  The site is part of 11,000 acres within the City of Cleveland granted an "Urban Setting Designation" by the Ohio Environmental Protection Agency as part of their Voluntary Action Program aimed at cleaning up contaminated Brownfield properties and returning them to productive use.

"This project was the first to leverage a State of Ohio development loan, along with city and county economic development assistance, through a New Markets Tax Credits financing structure," notes Tom Jackson, NDC Midwest Field Director, adding, "The deal attracted millions in private equity and state resources to assist NDC's client, Cuyahoga County, and the City of Cleveland in meeting their goals for bringing new jobs and investment to a neighborhood critically in need of both." 

The project is expected to support 13 full-time equivalent (FTE) construction-related jobs, retain 30 existing jobs, and create 45 new jobs within three years of construction completion.

NDC Field Director Karen Garritson, who provided technical assistance and underwriting for the project's financing, noted: "This project is a great example of public sector programs doing exactly what they are designed to do:  get high quality developers and entrepreneurs to take risks on lead projects in areas where 'old markets' have died and where the creation of 'new markets' is essential to the vibrancy of the neighborhood, city and state economies."  

Developer Mitchell Schneider is equally enthusiastic about partnering with NDC to get the project done: "NDC has been a tremendous partner in executing our NMTC financing for the redevelopment Shoreway Commerce Park. From initial contact, through underwriting and closing, the NDC professionals have been integral to launching this $15 million redevelopment project."

Director Garritson sums it up this way: "The patient, low cost capital provided to this project is essential for the creation of a 'new market' and direction for this area.  Change from devastation to economic strength does not happen overnight. It takes teams of visionary developers and leaders at all levels of government to pull together resources in a way that makes rebirth possible."