The success of brownfield development into Steelyard Commons

How First Interstate Properties revitalized the Cleveland Flats

By: Erik Cassano

Michael Schneider, Founder and President, First Interstate Properties

Where most people saw a brownfield in Cleveland’s Flats, First Interstate Properties saw the potential for a unique urban shopping development. The result was Steelyard Commons.

When Cleveland was one of the nation’s largest cities, the downstream portion of the Cuyahoga River Valley known as The Flats, with its plants and factories, represented one of the primary cogs in the industrial machine. Then the economy shifted, factories closed, people moved away, and The Flats spent decades drifting into post-industrial disrepair.

Through it all, the area has struggled to find a modern identity. How would this land, once some of the most prized real estate in Northeast Ohio, help drive Cleveland’s economy in the 21st century?

Mitchell Schneider thought he had the answer.

Mitchell Schneider, Founder and President, First Interstate Properties

A wasteland no more

Over the decades, countless cars have passed by the site, through the merge of Interstate 71 and the Jennings Freeway. Until 2006, the area was a brownfield that included outbuildings and unused land then owned by the steel mill. Despite the condition of the land, Schneider — founder and president of First Interstate Properties, a Lyndhurst-based real estate developer with a portfolio that includes Legacy Village, Avon Commons and the forthcoming One University Circle — saw potential where others saw a wasteland.

The brownfield was conveniently located for development — a roughly crescent-shaped, 120-acre plot of land near the growing and rapidly gentrifying neighborhoods of Tremont and Ohio City. Those neighborhoods, and others nearby, totaled a population of about 300,000.

“We had been searching for a large enough site to bring a sizable retail facility into the city,” says Schneider. “When we found that site, we identified it as a strong possibility.”

Out of that came the concept for Steelyard Commons, which has grown into the largest shopping district in Cleveland’s urban core.

Urban-core retail districts are nothing new, as cities across the U.S. undertake efforts to reclaim and repurpose underutilized land. However, Steelyard Commons’ roster of stores and its layout make it unique among its peers.

Descending the hill on Steelyard Drive from Quigley Road, motorists initially see something that urban-core shoppers don’t usually see — a huge, well landscaped, well designed shopping center equal to any in suburban Cleveland. The ample parking fronts stores — most notably Walmart, Target and The Home Depot — that are more often found primarily in large suburban shopping centers.

“It’s very unique to have an expanse of land this vast available for development so close to an urban core,” Schneider says. “We took advantage of that, because we didn’t envision this as a dense, urban development. We knew that if we were going to draw people to shop here, we’d need to create a facility equal to or better than the type of experience a shopper would have at a suburban location.”

Mitchell Schneider, Founder and President, First Interstate Properties

Big-box boom

With median incomes rising in the immediate vicinity surrounding Steelyard Commons and downtown offices creating a reliable influx of downtown day-workers looking for a place to have lunch and run midday errands, First Interstate was able to attract big-box retailers to the project.

The commitment of each big-box retailer was a critical win for Schneider and his team. It represented a vote of confidence that the company could use to attract other major retailers to the site.

“Walmart and Target each said they’d only commit to the project if the other company did,” Schneider says. “That’s the only time I can remember where you had two rivals, two primary competitors, and they’d only commit if the other committed. They wanted to know that the customer traffic would be there.”

Then The Home Depot signed on, as well, creating a triangle of anchor stores, with The Home Depot anchoring the northern end of the development, Walmart on the west side and Target at the southern end. With three main draws positioned at the corners when the development officially opened in 2007, other big retailers soon followed, including Burlington Coat Factory, Marshalls and Old Navy. Major restaurant chains, including Applebee’s, Chipotle Mexican Grill, IHOP and Steak ‘n Shake, also committed.

To date, Steelyard Commons has created 1,100 jobs, and each year, it generates $230 million in retail sales.

“The caliber of the brands that we were able to bring in illustrates how the surrounding area is changing,” Schneider says. “The neighborhoods around Steelyard Commons are vibrant and growing, with increasing income and education levels. But we also knew that we needed to create a shopping district that had its own identity and that wasn’t tied to any one specific community. With the size of the development and the stores we have, I think we’ve accomplished that.”

Steelyard Commons

Future development

Steelyard Commons’ land area is so expansive that, even with 40 stores, restaurants and businesses taking up 825,000 square feet, 15 acres of undeveloped land remain for future development.

“Our goal is to get up to 1 million square feet of developed space on the property,” Schneider says. “We still have some land that can be developed, that actually might have been developed already if not for the recession in 2008 and ’09. That was right after we opened, and obviously that altered a lot of the growth plans for major store chains.”

Schneider says the goal for Steelyard Commons in the coming years is to develop more large-format retail stores on the northern end and outlots on the southern end of the property.

“There is sufficient land for probably five or six buildings on the outlots and more than 100,000 square feet of retail space,” Schneider says. “That land can be used to attract the right kinds of retailers. You want to have a good mix of both smaller storefronts and large-footprint stores, so you continue to develop a diverse mixture of businesses on the property.”

And First Interstate isn’t limiting development of the remaining land to just stores and restaurants. Although its goal was to create a development with an identity independent of the surrounding neighborhoods, Schneider and his team still wanted to integrate Steelyard Commons into the surrounding cityscape.

"We knew we needed to create a shopping district that had its own identity and that wasn’t tied to any one specific community."
– Mitchell Schneider, Founder and President, First Interstate Properties

With Tremont, Ohio City and the downtown area attracting increasing numbers of residents who are drawn to a car-free urban lifestyle, First Interstate saw an opportunity to invest in the improvement of the Ohio and Erie Canal Towpath Trail.

As part of the project, First Interstate constructed about a mile of the Towpath Trail — which follows the original Canal Towpath built in 1827 — as it traverses The Flats adjacent to the Steelyard Commons property.

The company has helped create a tax increment financing (TIF) fund that will allow the city of Cleveland to further expand the Towpath Trail into the city.

“The idea was to create a fund that is managed by the city, to help create a pot of somewhere around $10 million that will allow for the expansion of the Towpath within the city,” Schneider says.

Steelyard Commons

Above all, the future expansion of the property has to accomplish the same goal that First Interstate has had for Steelyard Commons since its inception — to create a space that is both unique and integrated, a space that offers a shopping experience that can’t be found anywhere else in the immediate vicinity, while seamlessly fitting into its environment like a piece of a puzzle.

“We wanted Steelyard Commons to be different and unique within its environment, but still honor the legacy of the area,” Schneider says. “The land that it sits on is land that helped build this city and this region, so we did want to honor that past.

“That’s why you see artifacts that we harvested from the site as fixtures on the property. The bridge that you drive under at the north entrance was used to carry utilities from one end of the mill property to the other.”

“We wanted Steelyard Commons to be different and unique within its environment, but still honor the legacy of the area. The land that it sits on is land that helped build this city and this region, so we did want to honor that past.”
– Mitchell Schneider, Founder and President, First Interstate Properties

First Interstate also auctioned off harvested mill artifacts to raise $300,000 in scholarships for local students.

“We want Steelyard Commons to be connected to our past, present and future,” Schneider says. “In some ways, it’s laid out like hundreds of other shopping centers, but in many other ways, it’s special, and the goals connected to it are special to this area.”

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