Cleveland Clinic Aims to Start Construction on Innovation District Towers by Mid-2023

Michelle Jarboe, Crain's

The Cleveland Clinic plans to start construction in late spring or early summer of 2023 on a pair of substantial new research buildings at the southeast end of its campus.

Those towers are part of the Clinic's contribution to the Cleveland Innovation District, a multi-institution, public-private push to create 20,000 jobs and boost research in the city over a decade. State officials and leaders of local hospitals and universities announced the effort — and funding to support it — in early 2021.

Now the Clinic is renovating 43,500 square feet at its Lerner Research Institute, south of Carnegie Avenue between East 96th and East 100th streets, as part of the project. Next year, the hospital plans to break ground for two buildings immediately to the south and east, flanking East 100th, to create a home for its recently established Global Center for Pathogen & Human Health Research.

Linked by a skywalk over East 100th, those buildings collectively will span 358,100 square feet. An aerial rendering shows white, mid-rise structures with lots of glass facing Cedar, with a suggestion of street-level activity including outdoor seating and improved landscaping. City design-review bodies haven't vetted those plans yet.

The Clinic expects to wrap up the Lerner renovations, including wet and dry laboratory spaces, by mid-2023. The towers should be complete by the end of 2025, said William Peacock, the Clinic's chief of operations, and Pat Rios, executive director of buildings and design.

Rios said the Clinic is looking at ways to liven up the buildings' ground floors with glassy laboratories that put "science on display" and potential opportunities for community access.

"We're still very early in the design phase of these buildings," he cautioned, "but we're examining amenities for both the researchers and the public to use."

The total price tag for the new research buildings is $385.5 million.

The renovations at Lerner will cost $34.5 million, a hospital spokeswoman wrote in an email.

The Clinic, which reported a net loss of more than $1.5 billion for the first three quarters of 2022, is paying for the construction projects through bond financing, philanthropy and state money, Peacock said.

That includes a $100 million forgivable state loan for the pathogen center. The Clinic will not have to repay that money if it meets certain job-creation and job-retention thresholds. The health care giant also is tapping a grant from JobsOhio, the state's private nonprofit economic development corporation, and will benefit from a state job-creation tax credit tied to hiring and payroll.

The Innovation District projects are part of a swell of construction occurring across the hospital's main campus.

"We're in a huge cycle," Peacock said.

That boom includes a renovation and expansion of the Cole Eye Institute, at East 105th Street and Euclid Avenue. That project, which started in May, is slated for completion in 2025.

And site preparations are well under way for a 1 million-square-foot neurological institute on the north side of Carnegie, between East 86th and East 90th streets. The $1 billion project won early-stage, schematic approval from the Cleveland City Planning Commission in October, enabling the Clinic to begin foundation work.

The neurology building is replacing the Clinic's old surgery center and an adjacent parking garage, which were demolished in the fall. To create a construction-staging area for the project, the Clinic also is preparing to raze the former Cleveland Play House complex down the street.

That teardown is likely to start in mid- to late January, once the Clinic finishes asbestos abatement inside the Play House buildings. The Clinic bought the complex in 2009, when the theater company moved downtown, and has used the property for everything from storage to administration to police training during the intervening years.

At a community meeting in the Fairfax neighborhood in May, Rios told residents that the Clinic explored ways to reuse the buildings but was stymied by the chopped-up layout of the space and deferred maintenance. The complex, which includes the original 1926 building, a 1980s addition designed by noted architect and Cleveland native Philip Johnson and a onetime Sears store, required $40 million in repairs, Rios said at the time.

In mid-December, Clinic executives said they still don't have firm plans for the Play House site.

But they hope to create a more defined western entrance to the campus, in the same way that they're building up an eastern gateway with investments along East 105th and Cedar.

"I know there's going to be parking," Rios said of potential uses for the property where the Play House still stands, "but we're trying to improve the experience as you go down Carnegie."

With the rapid pace of changes in health care, treatments and research, "it would be premature to assign a specific task to that land right now," Peacock added.

The neurological institute is scheduled to be done in late 2026, though it will take the Clinic time to move employees and equipment into the building. That timeline also could be affected by inflation and supply-chain disruptions, which are causing problems for all sorts of construction projects.

"These are commitments that we're absolutely locked on executing, and really fixing our project budgets really tightly," Peacock said of navigating those challenges.

The Clinic also is playing a role in development in neighboring Fairfax, where Fairmount Properties broke ground late last year on a project that includes a Meijer neighborhood market, apartments and parking. That building, at East 105th and Cedar, sits at the northern terminus of the Opportunity Corridor boulevard and is part of a broader district called Innovation Square.

The mixed-use development is the result of a partnership between Fairmount, based in Orange Village; the Clinic; and neighborhood group Fairfax Renaissance Development Corp. The Clinic and Fairfax Renaissance own the 2.9-acre site through a joint venture and are leasing it to the developer.

The grocery store and apartments could open in mid-2023.

Separately, the Clinic invested $10 million in the Aura at Innovation Square, a mixed-income apartment building that is rising next door to Fairmount's project. The Aura, scheduled to open in late 2023, is the fruit of a collaboration between Fairfax Renaissance and McCormack Baron Salazar, a St. Louis-based developer.

Rios acknowledged that neighbors have criticized the Clinic over the years for treating Cedar like a back door.

"Now," he said, "you're seeing more of our front-of-house there and … a lot of development that's intended to be joint-use with the community."