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Rockport Square Plans Slow to a Crawl

Officials say mortgage loans for condominiums have “virtually dried up,” making it difficult to complete the remaining two phases.

The plans are about five years behind schedule, but the stalled development hasn’t been forgotten.

That’s part of the message that Rockport Square project manager Bill Sanderson shared with  on Monday. 

During the past few years, the plans for the four-phase development have been changed, scaled down and slowed to a crawl.

Sanderson said that mortgage loans for condominiums have “virtually dried up,” making it difficult to complete the remaining two phases.

The multi-million-dollar project was launched in 2004 with the use of tax increment financing — a method used for subsidizing redevelopment — for acquisition and development of the site.

The first two phases of development, between Newman and Winchester avenues along Detroit, have both been finished for a few years.

The final two phases, on the north and south sides of Detroit Avenue, were projected to be finished by July 2008.

“You can see that hasn’t happened,” Sanderson said. “The market has steadily improved over the last couple years, so it’s only a matter of time. However, I just don’t know what that time frame is.”

When the housing bubble burst and the economy started crumbling in 2007, so did the plans for the final two phases of Rockport Square.

“There was a thought that you could build anything, and as long as it was hip and cool, prices would only go up and never go down,” said Sanderson, who is also the vice president of joint ventures Forest City Land Group. “This was built on that model, and unfortunately this wasn’t as successful as expected.”

Sanderson said he remains hopeful that banks will begin to loan money again.

“The market has steadily improved over the last two years,” he said, “so it’s only a matter of time.” 

Some city leaders are growing impatient.

“The short-term issue is that, frankly, those properties sitting vacant like that are an embarrassment to the city,” said council president Brian Powers, who was on the planning commission in 2004 when Forest City first presented the plans.

“It’s a gap tooth in an important part of our smile. What can we do to make it not look like a war zone?”

There have been numerous complaints from nearby residents in the neighborhood about the condition of the empty lots, however Sanderson has said the company has made an effort to clean them up.

“The project is in significant deficit,” he said. “I can’t force someone to come in an build, and neither can you. I don’t think you want something built there that’s not economically viable.”

Dru Siley, the city’s director of planning and development, said that he hopes to “re-ignite a conversation about the development.”

“Where do we go from here?” he said. “This is really a step one in a multi-step process. The vacant parcels that remain aren’t in the best interest of the community, the administration or the developer. So this is about how do we move forward.”

Applebee’s still interested?

The Kansas City-based chain first showed interest in the -owned property at 12060 Detroit Avenue in 2008. 

The city’s architectural board of review approved construction plans.

Then the economy tanked and the deal fell apart.

“Applebee’s has come back into the picture,” Sanderson said.

However, and the company hasn’t submitted any plans to the city.

What about the 40-unit condo complex?

Last August, the plans for a 40-unit, four-story condominium complex on Detroit Avenue were .

But those plans, too, have stalled.

The proposal calls for loft-style condos on the large tract of land on the south side of Detroit, between Hopkins and Winchester avenues.

The four-floor structure would include 40 energy-efficient units, ranging from 1,350 to 1,900 square feet, with parking included on the property.

Originally, plans called for retail store on the first floor.

However, market demands and a troubled economy prompted Rockport to shift directions toward a scaled down version, said Sanderson.

No timetable for construction has been set.

Jeff July 17, 2012 at 12:06 PM
The rental market has exploded in recent years. Why doesn't Forest City abandon the Condominium plan and develop an apartment complex using green standards and awesome design that appeals to the young 20-something market?
Mark justmark July 17, 2012 at 02:42 PM
Many developers are not interested in managing property. Managing rental property is, generally, not as profitable as building for sale. It also burdens the owner with long term liabilities. More specifically, developers usually are not self-financed. They also borrow money from banks and or investors. To attain these loans, the developers have to present a business plan to the bank/investors. The loans are made, conditional to these business plans. In this case, the plan called for building these properties and transferring the title to a third-party buyer. The alternative would be for the developer to build the properties and sell them all to another entity which would be willing to manage them as rentals. But, this doesn't really change anything. Either way, the developer has to build and then find a buyer.
Mark justmark July 17, 2012 at 03:11 PM
Until another interested developer comes forward (or economic conditions change), I don't really see a problem with leaving the development alone. If Rockport Square is pushed too hard, their failsafe would be to simply walk away. That's why developers always start separate corporations for each development. It is so that if the wheels comes off, their losses and liabilities are legally limited to just that one site. Even if Rockport Square could be encouraged to resume construction, it will only serve to produce more supply of housing that is, arguably, already exceeding demand. This will only serve to depress housing values in Lakewood further. The developers are correct. They are limited by the ongoing economic crisis. Over the last few years, banks have put greater restrictions on mortgage loans. Today, it is much harder to qualify for a loan than just a few years ago. Even if the property itself qualifies (as newer property like Rockport Square likely would), the buyers still need significant deposits and clean credit to qualify. Because of unemployment, education costs, health care costs, fuels costs, and other elements contributing to the economic crisis, many people are struggling to save anything and may have damaged credit. This has stalled the market. At the very least, they should seed and mulch the site; as they're required to do. Frankly, I'm surprised that the Ohio EPA hasn't stepped in.
ian king July 17, 2012 at 05:59 PM
Mark - spot on comments/insight. Perhaps you could contact City Hall - Mayor or Council person for this area - and have them contact Ohio EPA. Also, call Rep. Kucinich too. Also, what insurance company has coverage for this blighted area - I doubt if they would want a lawsuit on their hands if something happens on this empty property.
Real Guy July 17, 2012 at 07:27 PM
I'm not shocked. It's not a great location (reputation-wise as well as convenience-wise). Plus, if I'm not mistaken, when I looked at those several years ago, they were looking for way too much for the market. I'm surprised that this plan came to fruition in the first place and can only hope that the investors take the brunt of the hit as opposed to the tax-payers.
Bobbie Brecks September 04, 2012 at 05:58 PM
As I read the article I understood the city is concerned with the low pace the new buildings are occupied . Let me tell you that I only recently heard about Rockport Square and its new buildings. I passed several times through Lakewood and saw some signs but otherwise nothing : no publicity at all and I live only few miles towards West. There should have been massive advertising. In line either, there is no picture of the interior as if it were a huge secret. If we weren't to be looking for another place to move we would never had find out about RS. Even on line I has to dig deep and honestly I have no idea how it did pop up, after hundreds of hours of surfing the web. I used any imaginary word one can imagine. Really difficult to reach information about Rhys type of residential building. Now that i read more about them and their prices my initial enthusiasm slowed down, they are so expensive. And for such an aria developers should have kept a more realistic price. Oh, and although I contacted the realtor last week I did not receive yet a call back. May be they are not interested. I like Lakewood and I really hope it will revive.
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