2022-14 - Authorize negotiations with CASTO for downtown development

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MaximizeDENSITY & OPPORTUNITY • r & office density r • opportunities forgrowth Increase Residential Density The 2017 Lakewood Hospital Redevelopment Analysis ("Market Study") indicated that between 116-348 residential units could be absorbed in the Lakewood market. The Development proposal has approximately 204 residential units. Council seeks an increase. Some options include adding more stories to the residential component, adding height to the amenities building, or adding density on the southern part of the Development as well as a for -sale component to offer a mix of housing products, such as accessible condos. Reassess Market Conditions The 2017 Market Study may be outdated and potentially shows less demand than is present in Lakewood's current housing market. Council would like the Administration to consider updating the 2017 Market Study prior to the final Development Agreement. Increase Office Density The 2017 Market Study showed a net demand for office space at 73,530 square feet and the Development currently has 65,500 square feet. Council would like to explore more opportunities for office space, including adding another floor to the office building. Recent market and media reports have shown a desire for Class A office space in mixed -use environments'. Roundstone has already indicated that its office needs have expanded since the start of the process and the Developer is not taking on much risk on the office component of the Development. Council strongly suggests that Developer consider marketing additional office space (in the range of 10,000 to 20,000 square feet) prior to the final Development Agreement to generate interest and gauge feasibility. Moreover, Roundstone may be willing to take on more space if their growth pattern continues. Fully investigate opportunities for future growth Council understands the need for approximately 540 spaces in the parking garage to support the mix of uses in the Development as well as the legal obligation to provide the Cleveland Clinic with parking spaces. However, Council urges the Administration to be thoughtful about the garage ensuring that it is designed and built to be adapted in the future (EV charging, autonomous vehicle parking, potential conversion to office, apartment, hospitality, or retail use), up to and including the potential for Lakewood to invest in a parking garage structure that would support future development vertically above the parking garage with Lakewood retaining the air rights for future development. The current market conditions do not support more density above the garage, but Council urges the Administration to be thoughtful about future opportunities to bring a mix of uses to Lakewood's market as this is a once in a generation opportunity. 1 See, e.g., "Office market trending toward smaller, high -quality spaces as challenges remain." Bullard, Stan. Crain's Cleveland Business (April 30, 2022) (noting that "[c]ompanies across all U.S. markets, mainly as companies try to figure out how to attract their employees back to the office, we are seeing more companies leaning towards Class A (prime) properties and mixed -use environments...")