Era of Big Development Projects Is Not Finished in Cleveland

TOUGH economic times have forced many United States cities to scale down development. But with more than $500 million invested in joint public-private projects, Cleveland is remaking its city center.

The city's 12-acre, $410 million Gateway Project will be home to a new baseball stadium and a basketball and hockey arena. Concerned that the city's professional baseball team might move to St. Petersburg, Fla., Cuyahoga County voters passed a tax on cigarettes and liquor three years ago to help finance a new stadium for the Indians. The tax raised $19 million for Gateway in its first year.

``We had to convince the public it would have a significant economic impact'' if the Indians headed south, says Thomas Chema, executive director of the Gateway Economic Development Corporation.

Along with public investment, downtown Cleveland has seen major private investment in the last decade, including Tower City shopping center, a British Petroleum skyscraper, and the Galleria mall. ``We wanted to establish Cleveland as a visitor destination,'' says Richard Shatten, executive director of Cleveland Tomorrow, a group comprised of the chief executive officers of the city's 54 largest companies. In the last 10 years, Cleveland Tomorrow has helped plan and finance $1 billion in investment in the city.

After the city went into default about 10 years ago, a new partnership between government, community, and business leaders was forged. ``We got our act together,'' Mr. Shatten says. The new cooperative climate encouraged investors, he says, and the city began to rebuild in the 1980s. A few objections

Not everyone is happy with the plans of corporate chieftains, however.

``We have public agenda being set by such institutions as Cleveland Tomorrow ... that envision shopping in downtown Cleveland, a Rock and Roll Hall of Fame, a Gateway, as community building,'' says Roldo Bartimole, who publishes a semimonthly newsletter in Cleveland. ``And for the majority, the quality of life continues to sink.''

Mr. Bartimole says Cleveland public schools are suffering because of lost revenue due to tax abatements provided to Cleveland developments.

Mr. Chema contends that the Gateway development project is a move to ``revitalize a quadrant of downtown that was disinvesting.... There had been no real investment for 40 years.''

Other public/private projects are also in the works for the city, including an $86 million Rock and Roll Hall of Fame and a $52 million Great Lakes Museum of Science, Environment, and Technology.

Another $100 million has been proposed for an aquarium at the mouth of the Cuyahoga River.

The Cleveland Indians have signed a 20-year lease for the new stadium, for $2.95 million a year. The Cavaliers basketball team, which signed a 30-year lease, is moving downtown from the Coliseum, an arena 45 minutes outside Cleveland.

The new arena will also host the Lumberjacks, Cleveland's minor league hockey team, and other events. The Browns will continue to play at the old lakefront stadium.

The 42,000-seat ball park is expected to be completed in February, and the 21,000-seat arena will be completed by August. Chema says that 24 companies have already paid $1 million each for luxury boxes. The arena will have 2,000 $2,400-a-year club seats. The $20 million raised so far has gone toward construction. Schools will gain

About 60 percent of the new income taxes generated by the sports complex - including taxes on the Cavaliers' payroll - will be directed to Cleveland public schools, says Gateway chief financial officer Timothy Offtermatt. But the state of Ohio capped Gateway's property taxes so that the complex pays the same amount it did when the property was a parking lot. Gateway instead will pay ``a couple hundred thousand per year'' in lieu of taxes, Mr. Offtermatt says.