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Cleveland: Downtown: Jacobs' Public Square Property

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1 hour ago, YABO713 said:

 

No, I agree. One of the successes of Pittsburgh - and granted they have geographic limitations that promote density - is that they have dozens of buildings in the 10-20 story range. For some reason, I feel like we as Clevelanders would rather 1 80 story tower get built instead of 4 20 story buildings. 

 

I would definitely prefer the eighty story tower because it becomes symbolic of the city.  Twenty stories gets lost in the shuffle, eighty stands out.  It becomes part of the city's signature.  A new and changing signature means a city moving forward. 

 

Ironically, that's also why I disliked the Nucleus design.   Twenty stories that looks like a jenga tower or a Brazilian favela?   No big deal.   Fifty?  No thanks.

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Agreeing the need to do some major infill first with buildings ranging from the 20 story variety will do wonders on the perspective of how outsiders view the city and those already there. Portland, Oregon doesn't have huge towers but their downtown is flourishing isn't? If the infill is done right Cleveland may start attracting Corps. from outside the state not just from the region but I do have a strong opinion that lot should be untouched until a major icon tower can be put there no matter how long it takes (though I don't have to see it everyday). 

 

I'm over the tall version for Nucleus, just get it right with the smaller version and speed it up!.

Edited by Mildtraumatic
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How viable are large office buildings as technology becomes more advanced and the way we use office space changes? The space needed per person is a lot smaller. There isn't really a need to be tethered to a cubicle or office, let alone actually physically being at work. Jacob's property would be fine with a 15-20 story building.

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23 minutes ago, imjustinjk said:

How viable are large office buildings as technology becomes more advanced and the way we use office space changes? The space needed per person is a lot smaller. There isn't really a need to be tethered to a cubicle or office, let alone actually physically being at work. Jacob's property would be fine with a 15-20 story building.

 

That argument doesn't fully make sense. If your typical office worker needed say 200 square feet of space, but now with "technology" and some people tele-commuting, he/she needs only, say 50, then you need only 25% of the space for THOSE workers. So an existing 20 story buidling need only be 5 stories. But if you want MORE workers there and you want to grow your city, you need a building taller than 5 stories.  Hence if the Jacobs Tower at 100 stories could serve, say 10,000 workers, but now would serve only 2500, rather than make it 25 stories, keep it at 100, and bring in 40,000 workers. That is what will grow the city and make the city more vibrant. 

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23 hours ago, imjustinjk said:

How viable are large office buildings as technology becomes more advanced and the way we use office space changes? The space needed per person is a lot smaller. There isn't really a need to be tethered to a cubicle or office, let alone actually physically being at work. Jacob's property would be fine with a 15-20 story building.

 

I'd say they are as viable as the large office buildings built over the last 100 years. If the office space becomes obsolete in the future there will still be a use for it after is useful life as office, as recent history has shown - see Ameritrust Tower, East Ohio Gas Building, etc.

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I would rather see something that matches the cornice height of the Renaissance hotel, 75 Public Square, the old Society bank building and the BP Tower atrium.

 

A super tall can go one block behind on West Third.

Edited by Terdolph

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1 hour ago, Terdolph said:

I would rather see something that matches the cornice height of the Renaissance hotel, 75 Public Square, the old Society bank building and the BP Tower atrium.

 

A super tall can go one block behind on West Third.

You mean like what was there before it was demo'd for the Ameritrust Tower?  Can't believe it's been 30 years since those buildings came down. 

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4 hours ago, Oxford19 said:

You mean like what was there before it was demo'd for the Ameritrust Tower?  Can't believe it's been 30 years since those buildings came down. 

Exactly,

 

If you just would have taken the 1960's skin off those buildings they would have worked fine. 

 

I worked in one of them in the early 80's.

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On 1/26/2019 at 11:18 AM, Pugu said:

 

That argument doesn't fully make sense. If your typical office worker needed say 200 square feet of space, but now with "technology" and some people tele-commuting, he/she needs only, say 50, then you need only 25% of the space for THOSE workers. So an existing 20 story buidling need only be 5 stories. But if you want MORE workers there and you want to grow your city, you need a building taller than 5 stories.  Hence if the Jacobs Tower at 100 stories could serve, say 10,000 workers, but now would serve only 2500, rather than make it 25 stories, keep it at 100, and bring in 40,000 workers. That is what will grow the city and make the city more vibrant. 

It wasn’t necessarily an argument per se, just wondering. The “build it and they will come” model is not what Cleveland needs, nor will it work. Having a 1 super tall skyscraper won’t lead to a more vibrant city, especially if we can’t fill it. If someone were to come along tomorrow and say that they wanted to build a 20 story building on the empty lot, that would be great. A taller skyscraper would be great as well, but how has that worked in the 20+ years that the lot has sat vacant ?

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No one is building a supertall skyscraper on spec in Cleveland. A growing company that is consolidating multiple office locations into a modern facility typically builds new skyscrapers here. The most likely candidate at this point of pursuing this approach is Sherwin Williams. They were very close to pulling the trigger on a new office tower in 2016 before they acquired Valspar and incurred significant debt (more than $11 billion of debt was on the books in the third quarter of 2017) in the process. Their debt is now dropping to near $9 billion. It was just below $2 billion before the Valspar acquisition.

 

From what I've read, SHW's first priority now is to pay down that debt. They are hyper-focused on that. Estimates are that they are able to pay off about $1 billion of their debt per year. Carrying some debt is normal, of course. It is measured by a debt-to-equity ratio. SHW's D2E ratio was at 4 in 2017 but is now below 2.5 and should be at 2 by the end of this year. Competitor PPG's D2E ratio is at 1.66, although their debt is at a five-year high. The industry average is at 1 or slightly below. It is possible that SHW's D2E ratio could approach PPG's level by level by the middle of next year, assuming cash flow and share values do no worse than remain stable.

 

Long-term capital leases count against long-term debt, so the thought that SHW leasing a HQ tower to avoid piling on new debt from building the tower themselves isn't correct. Because they might announce a new HQ tower in 2020 or thereafter, it makes sense that I'm hearing rumblings about them considering their options which do include leasing at least a smaller building or perhaps part of a larger building now. That's what the square footage numbers I've heard suggest. The point is, they are not ready to pull the trigger right now. But I am glad SHW is looking long term at what their options are when they do get their debt paid down to a reasonable level.

Edited by KJP
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"Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!" -- Lady Liberty

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The link below is to a podcast regarding surface parking lots and their impact on Cleveland.  I wouldn't be surprised if this has already been circulating around the forum, but I just discovered it.  It's a great podcast about Downtown Cleveland.  I would recommend also watching the 5-minute video on the page.  Near the end it shows an old picture of Denver which apparently used to be a sea of parking lots.  They changed the laws / tax policy, and today Denver is much more dense and vibrant.  We need tax policy changed in order to stop these surface lot owners from holding the city hostage.  Tax policy needs to encourage development and additional tax revenue.  It should not discourage development and lower tax revenue.

 

https://www.ideastream.org/news/episode-10-clevelands-surfeit-of-surface-parking-lots

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On 1/26/2019 at 11:18 AM, Pugu said:

 

That argument doesn't fully make sense. If your typical office worker needed say 200 square feet of space, but now with "technology" and some people tele-commuting, he/she needs only, say 50, then you need only 25% of the space for THOSE workers. So an existing 20 story buidling need only be 5 stories. But if you want MORE workers there and you want to grow your city, you need a building taller than 5 stories.  Hence if the Jacobs Tower at 100 stories could serve, say 10,000 workers, but now would serve only 2500, rather than make it 25 stories, keep it at 100, and bring in 40,000 workers. That is what will grow the city and make the city more vibrant. 

 

 

for comparison, i see the upcoming new manhattan chase hq tower in midtown on park ave is supposed to be 2.5M sq ft and to have 6k employees, so that translates to 417 sq ft per person. now not all of that is office space of course, it includes mechanicals, etc., etc., but it is one example of modern new build space X people. that probably shakes out to around 200 sq ft or so per worker, so you are still right on point i would guess.

 

i also found this info on a realtor site:

 

Large offices typically range from 200 to 400 square feet, mid-sized offices typically range from 150 to 250 square feet, and small offices typically range from 90 to 150square feet. Workstations, meanwhile, average around 60 to 110 square feet per person.

Mar 19, 2018 -- How Much Office Space Do You Need? – Redwood Property Group

 

i think the main attractiveness of these new office buildings no matter how tall or how much employee space is more about other things, like newness of course, flexibility and varied floor configurations, plus higher ceilings, upgraded services like being wired for today and other amenities. in other words like the ernst and young building i would imagine, but of course we all wait and hope for something more iconic on that old jacobs site.

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To be a wet blanket here, the very scary part of a major new office tower on this site is how the parking would be provided. The most likely options are both pretty bleak: (1) a huge structured parking pedestal with at least two awful street-facing facades (probably north and west); or (2) a sky bridge to a huge structured parking facility on the Weston superblock, with a horrible facade of its own (iirc, that's what the Ameritrust proposal entailed). The more hopeful solution is a sky bridge to the Weston superblock but the parking facility there being buried in the interior.

 

I'll be mostly excited when we ever see our next serious development proposal for this site, but I'm bracing myself for it to be a bit of a mixed bag. 

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I don't think that's scary at all -- depending on how they're designed. I've talked to two people who have seen SHW's 2016 HQ rendering and both said that urbanists would like it. Now, I don't know what that means or even if those same plans would be dusted off in a couple of years when SHW gets its debt load down to reasonable levels. But no matter who's building a new tower here or for which tenant(s),  but I would personally like to see a glassy, high-ceiling, first-floor lobby topped by about 10-15 stories of parking (disguised to look like an office building or feature a "green wall/living wall") and 30 stories of office building above would be fine with me. I assume this building would also have service levels and loading docks in the basement, or perhaps some additional levels of parking below ground.

 

The Jacobs Lot is 50,000 sf. If the lobby/parking pedestal were built straight upward from the perimeter of that lot, that's about 140-145 parking spaces per level. Let's say SHW builds its new HQ here. SHW has 2,800 workers at its Landmark Office Towers HQ. It has approximately 550 office workers (not lab/R&D/training) at three other locations in Greater Cleveland. These numbers are growing. It's quite possible that, if SHW builds an HQ tower, it could have 3,500+ SHW workers in it by the time it's built. At 250 square feet per worker, that's "only" 875,000 sf. The rumors were that SHW wanted (wants?) a 1 million sf tower. I assume that is for future growth that could be leased or sub-leased to another user(s) in the meantime. That works out to roughly 4,000 office employees if the tower was fully occupied.

 

Therefore.... If parking for one-third of the office worker capacity was provided within a new tower, that's about 1,333 spaces on about 9.5 levels of parking if the full 50,000 sf plate was used. If parking were provided for half of the workers, and provided within a new tower, that's about 14 levels of parking. If two-thirds of office workers had a parking space, there would be 2,666 spaces on 19 levels of parking.

 

So, it might not be a bad thing if a deck was built in the Weston lots (likely smaller than what the Ameritrust Tower would have had there) -- IF it was built in a way to be shrouded by a future building or, perhaps even better, designed like 515 Euclid so it could be topped by a future office or residential tower. And that future tower was built, it might prompt another deck to built on the Weston lots, again designed to be topped with a tower, and so on.... 😉

Edited by KJP

"Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!" -- Lady Liberty

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A quick question.  If SHW is concerned about paying down its debt, couldn’t it work with a developer to lease the majority of a new skyscraper that the developer could build now and SHW could occupy in the two years or so that it would take to complete?  That would give SHW time to work additional synergies from the merger with Valspar, pay down more debt and not have to wait additional time to get into a modern, efficient and more cost effective headquarters? 

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25 minutes ago, Chazz Michael Michaels said:

A quick question.  If SHW is concerned about paying down its debt, couldn’t it work with a developer to lease the majority of a new skyscraper ...

 

The 6/30/18 headcount report in Crain's said that  Sherwin-Williams employed 4,940 people locally, up 615 from a year earlier. That's a pretty big jump and I suspect the musical chairs game isn't yet over. So, in addition to debt problems, the final Cleveland-area headcount may still be too uncertain for the best space planning.

 

(It would be fun to know how hard it is to sell a Minneapolis-to-Cleveland move to the Valspar folks.)     


There's nothing wrong with optimism, as long as you don't get your hopes up.

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27 minutes ago, Cleburger said:

 

At least the weather is not really a factor.   I'd worry more about the progressive, forward thinking mindset of Minneapolis moving to Cleveland, who's mayor is asleep at the wheel and is surrounded by a populace wishing it was 1955 again.  

Weather aside, I think people are generally a little more open to relocate when you option is a job in Cleveland or no job in Minneapolis.  Cleveland sells itself way too short (arts, dining, sports, great schooling options, etc).  I have no idea how big Valspar's staffing was but any increase in hiring in Cleveland should be offset by huge decreases in staffing in Minneapolis (too many redundancies).  

 

As for space planning, if SHW were to agree to lease space in a new office tower built by a developer, they would likely take 80% of the tower and would have the right of first refusal on additional floors/space if they needed it.

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2 hours ago, Chazz Michael Michaels said:

A quick question.  If SHW is concerned about paying down its debt, couldn’t it work with a developer to lease the majority of a new skyscraper that the developer could build now and SHW could occupy in the two years or so that it would take to complete?  That would give SHW time to work additional synergies from the merger with Valspar, pay down more debt and not have to wait additional time to get into a modern, efficient and more cost effective headquarters? 

 

As I noted earlier, long-term leases count as debt. My understanding is that SHW has completed all of its legal work and staffing assignments resulting from the Valspar acquisition. And SHW probably isn't going to get its debt-to-equity ratio down to an industry commonplace 1:1 for another 3.5 years at current rates of highly oversimplified estimates of progress....

 
Dec. 31...2017...2018...2019...2020...2021...2022
debt.......$9.89....8.71....7.53....6.35....5.17....3.99

equity.....$3.65....3.73....3.81....3.89....3.97....4.05

Amounts are in billions

Based on data from this source: https://www.prnewswire.com/news-releases/the-sherwin-williams-company-reports-2018-year-end-and-fourth-quarter-financial-results-300787224.html

 

But, it should be noted that it would probably take about three years to design and build a 1-million-square-foot, 40-story, $1 billion skyscraper. So we may hear more rumblings as early as the end of this year.

 

BTW -- Valspar had 400 employees at its headquarters in Minneapolis.

 

1 hour ago, Dougal said:

 

The 6/30/18 headcount report in Crain's said that  Sherwin-Williams employed 4,940 people locally, up 615 from a year earlier. That's a pretty big jump and I suspect the musical chairs game isn't yet over. So, in addition to debt problems, the final Cleveland-area headcount may still be too uncertain for the best space planning.

 

(It would be fun to know how hard it is to sell a Minneapolis-to-Cleveland move to the Valspar folks.)     

 

That includes a lot of R&D and manufacturing employment locally. There's about 400 R&D workers at the Breen Technology Center on Canal Road and roughly 1,200-1,300 workers at SHW's Automotive Finishes Group in Warrensville Heights. Only about 100-150 of those are office workers in the Automotive Finishes Group World HQ.

Edited by KJP

"Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!" -- Lady Liberty

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"Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!" -- Lady Liberty

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I know it would result in a huge court battle but I wish the city would just grow some balls and say it cannot be used as a parking lot anymore. 

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3 minutes ago, Htsguy said:

I know it would result in a huge court battle but I wish the city would just grow some balls and say it cannot be used as a parking lot anymore. 

Or gradually escalate the taxes until it doesn't make sense any longer as a parking lot...

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15 minutes ago, gottaplan said:

Or gradually escalate the taxes until it doesn't make sense any longer as a parking lot...

 

How possible is this? Can the City of Cleveland just pass a law that says "Parking lot owners now need to pay an additional $50/month per spot on any lot they own."? Guessing it can't be that simple.

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1 minute ago, jborger said:

 

How possible is this? Can the City of Cleveland just pass a law that says "Parking lot owners now need to pay an additional $50/month per spot on any lot they own."? Guessing it can't be that simple.

Without doing any legal research you certainly cannot single out one parking lot...it would have to be all of them in the city and it maybe even questionable if you can single out single use property without raising property taxes on everyone.  I don't know.  Would make a nice seminar topic for Case and Marshall law schools.  Come up with a constitutionally viable lawsuit and get an A and summer job with Jones Day (and then when you are with Jones Day you can defend Jacobs Group in the lawsuit you created🙂)

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26 minutes ago, jborger said:

 

How possible is this? Can the City of Cleveland just pass a law that says "Parking lot owners now need to pay an additional $50/month per spot on any lot they own."? Guessing it can't be that simple.

 Right, the city is just going to tell all property owners with parking lots they have to Spend huge amounts of their own capital to build a building that the market won't support just because people want to see something built there. That'll happen.

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29 minutes ago, Mov2Ohio said:

 Right, the city is just going to tell all property owners with parking lots they have to Spend huge amounts of their own capital to build a building that the market won't support just because people want to see something built there. That'll happen.

 

The Downtowner had a good take on parking in the Jacob's lot, and Warehouse district overall and frankly, there's little incentive to make these anything but parking. I'm all about taxing the crap out of these lots and maybe we'll be subjected to less speculative buying and holding of lots and more concrete investors with actual plans. Sure, costs may be passed onto consumers, but there's no reason parking should be cheaper than an RTA/transit pass. 

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13 minutes ago, GISguy said:

 

The Downtowner had a good take on parking in the Jacob's lot, and Warehouse district overall and frankly, there's little incentive to make these anything but parking. I'm all about taxing the crap out of these lots and maybe we'll be subjected to less speculative buying and holding of lots and more concrete investors with actual plans. Sure, costs may be passed onto consumers, but there's no reason parking should be cheaper than an RTA/transit pass. 

 

Impose a tax that makes it not as financially appealing and route the money to RTA, haha.

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Why can’t the City of Cleveland put more 8-hour parking meters on the streets to compete with the parking lot owners? I’m thinking along Rockwell (minus Federal property), St. Clair, Lakeside, Superior, along Public Square, around The Mall (taxi stands are nearly obsolete). Additionally, diagonal parking spaces in front of the Justice Center could accommodate the dedicated police parking that takes up both sides of Ontario and open one side up for public meters.

 

I’d personally like to see a massive City-owned parking garage hidden behind historic buildings on West 6th and West 9th in the warehouse district that could serve the whole western side of downtown—more spaces, smaller footprint. If there is an inexpensive, convenient (app managed) public option with a reliable supply I think it would make being an Absentee Parking Lot Owner a lot less attractive occupation. 

 

Rather than use the courts to force lot owners to develop their privately-owned surface lots, I think that a change in public policy that seeks to add to the supply of street parking could cut into the guaranteed revenue stream that the parking industry enjoys.

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A parking tax has to be applied equally to all parking lots or a court will call it a punitive tax and set it aside.

 

And the State of Ohio prohibits municipalities from levying more than an 8 percent tax on gross parking revenues. Cleveland's parking tax is 8 percent.


"Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!" -- Lady Liberty

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36 minutes ago, KJP said:

A parking tax has to be applied equally to all parking lots or a court will call it a punitive tax and set it aside.

 

And the State of Ohio prohibits municipalities from levying more than an 8 percent tax on gross parking revenues. Cleveland's parking tax is 8 percent.

Makes sense.  That is why as an alternative option we should get a group of forum members together and take turns slashing tires and breaking windows of anybody who dares park in the lot. 

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21 minutes ago, Htsguy said:

Makes sense.  That is why as an alternative option we should get a group of forum members together and take turns slashing tires and breaking windows of anybody who dares park in the lot. 

Nah man, civil disobedience is where it’s at. I propose we peacefully form a human chain at all entrances to the lot.

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26 minutes ago, Boxtruffles said:

Nah man, civil disobedience is where it’s at. I propose we peacefully form a human chain at all entrances to the lot.

Ok.  You win.  But afterwards can we go out to Westlake and slash tires in the Jacob Group parking lot?😏

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13 hours ago, Terdolph said:

The city should buy the Jacobs lot.

 

And do what with it?

 

I could see acquiring it, so it was in hand should the city need it in the future for some sort of development. In the mean time though it would probably remain just a city owned parking lot right?

 

We all realize that any old thing could have been built over the last years, but we are holding out hop that it is something tall and iconic right?

 

Things like that are not cheap and the closest we've been to something like like going up there was 30 years ago. 

 

As we've seen, the county and city would throw in tons of incentives should the right project come along. When you get the right developer, with the right plan, with the right tenants or tenant mix, and most importantly with the right capital stack, you will see a large development there. Building something that will sit empty doesn't make any sense, not to mention the fact that nobody would put up funds for something like that.

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I couldn't see the city buying the lot; the sale of the lot would be several million dollars, and Its way too easy for anyone to point to the many things the city could do with the money instead.  

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20 hours ago, Mov2Ohio said:

 Right, the city is just going to tell all property owners with parking lots they have to Spend huge amounts of their own capital to build a building that the market won't support just because people want to see something built there. That'll happen.

 

The change is that the property gets rezoned as some other use besides "parking".  So even though parking is currently allowed, it will never be allowed again under a change of ownership.  Then it gets taxed and valued as target development land.  which could be double or triple what a parking lot might be valued/taxed as

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