By Kevin Kelley
Westlake City Council Thursday approved five ordinances associated with American Greetings’ plan to move its corporate headquarters from Brooklyn to Crocker Park.
The deal between the city, American Greetings and Crocker Park has yet to be finalized. But the approved ordinances give Mayor Dennis Clough and his administration the authority to proceed on matters associated with the card maker’s planned move.
One issue still undecided is whether the city will assist in financing the development of a northeast section of Crocker Park known as Block K. A hotel, parking garage and several restaurants are planned for the area, located just east of Nordstrom Rack.
Westlake is set to issue $48.1 million in bonds to fund public improvements, including three parking garages and work on Crocker Road at an intersection near the American Greetings headquarters, to be built at the southern end of Crocker Park. Those bonds will be repaid by American Greetings and Crocker Park in the form of payments in lieu of property taxes.
“Instead of paying the real estate taxes, they will be paying these bonds off,” Clough explained.
Crocker Park would like the city to issue an
additional $6.3 million in bonds to fund public improvements – consisting of underground utilities, driveways, surface parking areas, sidewalks and streetscaping improvements – in and around the Block K area. However, Clough has concerns that the additional $6.3 million in debt the city is being asked to incur could jeopardize the city’s top credit rating. The city’s financial adviser, Matt Stuczynski, of Huntington Investment Co., said his company’s analysis indicated Westlake would likely still qualify for the AAA rating even with the additional debt, but just barely.
All five ordinances related to the American Greetings move passed council by a 6-0 vote, with Ward 5 Councilman Michael O’Donnell abstaining on all the votes. O’Donnell is employed at American Greetings as the company’s director of information technology.
The ordinances passed Thursday authorized the city to:
• issue not more than $55 million in bonds to pay for public improvements. This amount includes the $48.1 million for the American Greetings headquarters area and, possibly, the $6.3 million for the Block K area;
• accept a $1 million road improvement grant from the state’s department of development to help pay for these public improvements;
• provide American Greetings a tax credit equal to 0.5 percent of its income tax revenue over a 15-year period, provided the company meets certain payroll requirements;
• enter an agreement specifying the obligations of the city of Westlake, American Greetings and Crocker Park, and the company’s subsidiaries, in the development; and,
• finalize an agreement on the construction of a civic space, to be known as Market Square, within Crocker Park.
In addition, the city has also obtained an $8.5 million loan, at 3 percent interest, from the state’s infrastructure bank to help pay for the infrastructure improvements. American Greetings and Stark Enterprises, owner and operator of Crocker Park, are kicking in an additional $7 million to costs associated with the issuance of the bonds.
American Greetings promises to employ 1,340 people in Westlake, with a payroll totaling $132 million annually. The card maker also agrees that its new, 600,000-square-foot headquarters will have a value of no less than $98 million; retail space on the first floor of its headquarters complex will have a value of approximately $12.5 million.
Crocker Park agrees to construct additional retail space valued at no less than $26.5 million and commercial apartments valued at $34.5 million. The development also promises a payroll of 210 employees making a total of $6.54 million.
Steven Rubin, the chief operating officer of Stark Enterprises, said the addition of American Greetings will mean significant additional development at Crocker Park.
“[American Greetings is] a significant anchor that solidifies Crocker Park as the downtown of the West Side of Cleveland,” Rubin told West Life.
Rubin said he hopes the city will help as well in the financing of the Block K development.
Council President Mike Killeen said he expects the three parties to finalize the agreements and the bonds to be marketed in the next several weeks.
Killeen also assured residents that the city has extensively examined potential consequences of American Greetings’ move, such as increased traffic.
“It’s not like the city is going into this without detailed study and understanding of where everything is at,” the council president said.
According to a master development schedule included as part of the overall agreement of the three main parties, construction of American Greetings’ 600,000-square-foot headquarters is scheduled to begin this August. The company’s employees should begin moving in by the summer of 2016. Additional retail and residential properties near the American Greetings headquarters are scheduled to be completed by 2016 and 2017.
Clough said the arrival of American Greetings and the expansion of Crocker Park will be exciting events.
“I just think this is going to be great for the community and great for the parties,” Clough said.
In a related move, council approved a payment of up to $26,000 to the architectural firm Bialosky + Partners to design an enclosed pavilion building for the planned Market Square. In April 2013, council approved a development plan for Market Square that consisted of a 1-acre area with a hard surface and covered stage for events such as the farmers market. However, bids for the covered area came in higher than expected, so the city is now looking to build a covered pavilion.