How a base of knowledge capital is transforming Greater Cleveland.
by RON STARNER
Hyland Software could have built its spacious new corporate campus anywhere in the U.S. It chose Cleveland – and the story behind that site selection reveals plenty about where this region is heading.
To say that this is not your father’s Rust Belt anymore would be the understatement of the new century. There’s plenty to like in the new Cleveland, says Rick Kirk, director of operations at Hyland Software in Westlake, Ohio, one of the shining suburbs in the Greater Cleveland area. The state of Ohio approved tax credits last October to support Hyland’s planned construction of a three-story, 112,000-sq.-ft. building across the street from Nordson’s headquarters facility that currently houses the software firm. The project would not be happening if the company had trouble finding the high-tech talent it needs to grow right in its backyard of Cleveland, notes Kirk. “I don’t have any trouble finding the skilled people that I need right here in the Cleveland market,” says Kirk, whose firm added 300 workers last year and could add another 387 with the building project. The 1,100-employee company noted that it considered locations in California, Massachusetts, Michigan, Nebraska and North Carolina before settling on Westlake for its headquarters expansion. Cleveland has been winning a lot of projects like this of late, and the common denominator in each is the vast talent pool found in Northeast Ohio. When U.K.-based Alexander Mann Solutions chose Cleveland over Raleigh, N.C., last year for the firm’s new North American headquarters, the decision confirmed what many in the Northeast Ohio had begun to suspect: Cleveland is back.
Drew Carey Had it Right
If some in the business world are still thinking of Cleveland as “The Mistake By the Lake,” they should take a closer look. That’s exactly what I did from July 31 to August 3, when I participated in a Site Selectors Fam Tour hosted by Team Northeast Ohio.
Together with site selectors from Jones Lang LaSalle, Mohr Capital and Newmark Grubb Knight Frank, I had the opportunity to interact firsthand with business and community leaders from around the region, and – more importantly – see for myself the evidence of Greater Cleveland’s turnaround. A Cincinnati native and lifelong fan of the Reds and Bengals, I am well aware of Ernest Byner’s fumble in the AFC Championship Game against Denver in January of 1988, as well as the much-chronicled foibles of the Cleveland Indians over the years. But if what I saw in Cleveland over four days this summer was any indication, I don’t think folks will be viewing the community through the lens of 10-cent beer night anymore. In the immortal words of Drew Carey, “Cleveland Rocks!” With $15 billion in projects either recently completed or under development right now, Downtown Cleveland is perhaps America’s busiest CBD construction zone of 2013. Deb Janik, senior vice president of real estate and business development for the Greater Cleveland Partnership, said that while manufacturing is still the largest sector in Cleveland, “there is a big focus on medical R&D space development here in Cleveland now.” The world-renowned Cleveland Clinic serves as the magnet for this development, as does the considerable talent pool churned out every year by Cleveland State, Case Western Reserve University, and the many other colleges and universities throughout Northeast Ohio. “We have 30,000 young professionals in the region, including 10,000 in Downtown Cleveland,” said Steve Luca, managing vice president of Cleveland Development Advisors, which has $100 million in capital under development right now. “From 2007 to 2010, Cleveland State invested $500 million into its downtown campus – the largest single development in our downtown.” Janik says the city’s renaissance has been remarkable. “People are coming back to downtown Cleveland today,” she notes. “Dan Gilbert (owner of Quicken Loans and the Cleveland Cavaliers) is investing here, and residential growth is driving our retail growth.”
Rear-View Mirror Not Needed
The sense of optimism in the city is palpable. I experienced it everywhere I traveled in Cleveland. Whether it was enjoying the world-class cuisine at Lola, Dante, Ken Stewart or Table 45, or touring the picturesque University Circle around the campus of Case Western Reserve, it was clear that the people of Cleveland were focused on moving forward, not looking back with any regret on their past.
In his address to about 250 attendees at the NAIOP Developers Showcase event at the Aloft Hotel, Mayor Frank G. Jackson captured that futuristic vision when he said, “The question for us is what’s next?” For many in Northeast Ohio, the answer will be capitalizing on the growth opportunities created by the Ohio Utica Shale. With 460 wells drilled and another $3 billion under development, the expected economic impact of shale in the region is enormous. Northeast Ohio companies that are growing because of the shale play right now include V&M Star in Youngstown (steel tubing); Miller Supply Inc. in Wooster (oilfield supply and services); Pioneer Group in Marietta (midstream fabrication and construction); Timken in Canton (manufacturer and supplier of bearings); and many others. Some of the world’s largest energy exploration companies are investing big bucks in the Ohio Utica Shale fields, including Halliburton ($150 million), Schlumberger ($150 million), and BP ($331 million). Without the considerable engineering talent coming out of Northeast Ohio’s colleges and universities, this growth would not be occurring. That’s why this isn’t the same Cleveland anymore.