Riverfront site, Higbee Building recommended as location for Medical Mart and new Cleveland Convention Center

Thursday, August 07, 2008

Cleveland, August 7, 2008 - After nearly a year of careful review of the best location for a medical mart and new convention center, civic leaders today said the Riverfront site is the most suitable and competitive, and provides the best opportunity to reinvigorate the heart of downtown.

A 12 member Greater Cleveland Partnership Site Selection Committee recommended to the Cuyahoga County Commissioners that the medical mart be located in the Higbee Building on Public Square and that a new, connected convention center be on Huron Road overlooking the Cuyahoga River.

"Based on both affordability and the industry criteria for maximizing our potential success, we believe the Riverfront site is clearly the best option for this community in terms of jobs, investment and our economic growth," said Fred Nance, who chaired the GCP Site Selection Committee.

The medical mart/convention center project is a first-of-its-kind opportunity that will maximize Cleveland's unique strength in health care.  While a new convention center has been discussed for over a decade, the medical mart provided a compelling opportunity to add a unique dimension to a convention center project.  It would also assure a built-in stream of business for the new convention center that is conservatively estimated to pump $205 million into the county's economy annually. 

"The medical mart completes the puzzle of how we can compete in the convention business," Nance said.  "We will have something unique in the medical mart.  We have links to attractions not available in other cities.  We will compete with - and win - in the race for convention business."

The estimated cost to develop the convention center and medical mart at the Riverfront site - including design, engineering and property acquisition expenses - is $536 million. 

The dedicated, one quarter of a cent sales tax increase that was enacted to finance the project is expected to raise in excess of $490 million and the developer, Merchandise Mart Properties Inc. (MMPI) has committed $19 million - meaning another $26 million is needed to complete the project. 

The GCP Site Selection Committee recommended those additional costs be covered by a diverse financing package that could heavily rely on revenues generated by the travel and tourism industry.  A variety of options were presented to the Cuyahoga County Commissioners for review, including state and federal money, a slight increase in the county bed tax (a tax that is paid by visitors, not residents) or a reallocation of the existing bed tax.

MMPI is committed to covering the cost of any overruns on the project.

Besides cost, the Riverfront site also was recommended based on the other critical criteria for maximizing success is a cold weather climate like Cleveland.

The Riverfront site, for example, offered the greatest "connectivity".  It has immediate connections to rapid transit, Cleveland Hopkins International Airport, the Historic Gateway Neighborhood and its sports facilities, Tower City retail, restaurant and entertainment venues, the Euclid Avenue Corridor, the Towpath Trail and Scenic Railroad into the Cuyahoga Valley, and more.

The cost at the other prime location considered for the new complex, the mall site, would be $583 million - $47 million more than the Riverfront site.  In addition to being more costly, the mall site had other significant limitations, including a longer construction period. 

Economic Impact
According to a study done by Team NEO, the estimated total economic impact of the project during the construction period will be $588 million, with an average of 1,556 construction jobs annually.  Upon completion, according to conservative estimates that assume only 25 conventions per year, an estimated $205 million will be generated annually for the County's economy. 

"The medical mart will make Cleveland a national destination for health care and medical device industries. This unique facility will attract thousands of guests annually who will spend money in our hotels, restaurants and elsewhere. This is a project that Cleveland needs, and today, we're moving it forward.  More importantly, it will help cement Cleveland's growing reputation as the healthcare capital of the country" Nance said.

"There is still much more work to do in concert with the County Commissioners," he added. "We look forward to finalizing the site and financing, and moving on with the design and development of the project."

Construction could begin as early as late 2009.

The full report is available online at www.gcpartnership.com/medicalmart.aspx

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