Published by: Crain's Cleveland
Michelle Jarboe
A developer team is planning the largest speculative industrial building in the region's history.
The Geis Cos. and Stonemont Financial Group are preparing to start construction on a 1 million-square-foot warehouse in Portage County — without any tenants on hand. The building will be the first to rise at the Turnpike Commerce Center, a 470-acre business park located just off the Ohio Turnpike in Shalersville.
Geis bought the property, a stretch of farmland, in July. Now the Streetsboro-based developer has teamed up with Stonemont, of Atlanta, to co-own and develop the first 77 acres, northwest of where the toll road crosses state Route 44.
"We really looked at the lack of availability from New York to Chicago … really the I-80 corridor from east to west," said Zack Markwell, Stonemont's CEO and managing principal, of evaluating the need for modern, move-in-ready space. "There's very little availability. And obviously with the continued growth of e-commerce, what we've seen through COVID and moving out of COVID, we think there's still a huge demand."
Plans for the building show a footprint of just over 1 million square feet, with 220 docks and parking for 330 trailers and 900 cars. The broader property could support millions of additional square feet of development, depending on the size and types of users that materialize.
Greg Geis, the second-generation owner of the company that bears his family's name, said the first building should be complete in early 2023. But that timeline depends on securing key public approvals.
The Portage County Board of Commissioners voted Thursday, June 9, in favor of a tax-abatement agreement for the project. Township officials in Shalersville already had signed off on exempting improvements to the 77 acres from property taxes for 15 years. Geis and Stonemont will pay taxes on the value of the underlying land.
The board of education for the Crestwood Local School District also has approved the abatement deal. The developers will make annual payments to the school district and Maplewood Career Center, a vocational school in Ravenna, as part of the agreement.
School board records indicate that the first project will cost at least $70 million to build, though neither Markwell nor Geis would provide a firm number. "It's a lot," Geis said.
Separately, Shalersville and neighboring Streetsboro are considering legislation to create a joint economic development district to share income-tax revenues from the project. That long-term arrangement would apply Streetsboro's 2% income tax rate to workers at the site. The city would receive 35 cents of every tax dollar, and the township would receive the rest.
The local governments would use the money for administrative costs and other expenses, including road maintenance and improvements. The agreement forbids Streetsboro from annexing Shalersville.
The pending contract only covers the first 77 acres. As the business park grows, additional sites could become part of the district — and might also be candidates for tax abatement, officials said.
Patrick O'Malia, Streetsboro's economic development director, believes there will be positive ripple effects across the region as new buildings start to rise in Portage County.
"This could be a game-changer for larger-scale projects," he said, noting the shortage of sprawling sites where developers can erect buildings quickly to meet companies' needs.
A recent site plan shows eight buildings at the Turnpike Commerce Center, ranging from 125,000 to 1.4 million square feet. Geis said he's talking to three potential users who each need 80 to 90 acres. But Team NEO, a nonprofit regional economic development organization, also has heard from companies that might gobble up most of the park.
Christine Nelson, who leads Team NEO's projects, sites and talent work, said those prospects include logistics businesses and suppliers in the semiconductor and electrical vehicle industries.
To kick-start the speculative project, JobsOhio has offered the developers a $2 million grant through its Ohio Site Inventory Program. The statewide nonprofit economic development corporation unveiled that program in 2020 to fill gaps in the real estate market.
The need for such buildings has only grown over the last few years, in a tight industrial market where shortages of both labor and materials are prolonging construction, said David Stecker, an executive vice president at the JLL real estate brokerage in Cleveland.
"That's why these spec projects have an advantage over build-to-suit, just because of speed to market," said Stecker, who will be marketing the building for lease with colleague Joe Messina.
Brad Ehrhart, president of the nonprofit Portage Development Board, also stressed the need to respond quickly to companies and site selectors. "If you have the product ready to go, that is a big portion of an attraction project. … I think the tax abatement will be an important area, too, for a customer," he said.
It's possible that Geis and Stonemont will partner on additional deals at the Turnpike Commerce Center. "We view this as the first of many," said Markwell, who lives in Hudson.
Stonemont has 6.2 million square feet of projects under development in Ohio, including a 450,000-square-foot Medina County warehouse where Geis is handling the construction.
Geis views passing the million-square-foot threshold as a milestone for the market.
"Northeast Ohio has never been competitive in the large customer arena. … Typically, we were owner-occupied. Then we started to get national exposure with smaller facilities," he said. "But I think it's time for us to compete on a national level from a size and pricing standpoint."