The City’s business incentive loans and grants allow it to coinvest with businesses, accelerating their growth while benefiting the City, its residents, and the local job market.
By Michael Peters
The view from the 12th floor of the Equity Engineering Group offices in Tower East makes it easy to understand the attraction of Shaker Heights to businesses. In one direction the Rapid Transit tracks cut through the new Van Aken District towards the towers of Downtown Cleveland. In the opposite direction the extensive highway network and rolling hillsides come into view. To the north the deep blue of the lake glistens, a haven for boating, fishing, and relaxing.
This proximity to transportation, diverse housing choices, and numerous recreational opportunities attracts the attention of new and expanding businesses – mostly because it also attracts and retains the high-quality workforce that allows them to grow. Add in the new living and dining options of the Van Aken District and unique amenities like the Shaker Rocks indoor climbing gym, and Shaker Heights can meet the needs of nearly any business.
David Osage, the president and CEO of Equity Engineering Group (or E2G), and his original partners saw this promise nearly 20 years ago. That was when they rented a small office on Warrensville Center Road after going through the “outplacement” process at BP America.
“The oil industry was in a downward spiral,” Osage explains, and there were few opportunities, so he and 12 other partners started a specialty engineering business focused on refinery and related oil and gas systems. The timing worked in their favor, and within a few years they needed more space. The top floor of Tower East was available and “the building needed an anchor,” Osage says. “We rented two-thirds of the space and about six months later expanded to the whole floor.”
The need for more space continued and the firm’s Employee Stock Ownership Plan also needed an investment, so it initially bought the top three floors, soon after added a fourth floor, and then bought the entire building in 2015. Since moving into Tower East, Equity’s personnel count has shown an 11 percent increase. The fast-growing business could have bought a building anywhere in the region, but chose Shaker Heights. From the very beginning of their occupancy in Tower East, Equity Engineering worked closely with the City, with each making a substantial investment in their mutual success. When Equity purchased the top floors, it qualified for the City’s Vision Fund forgivable loan program. Targeted at renovations to the building, designed by Walter Gropius and listed on the National Register of Historic Places, the loan was based on increasing the City’s receipt of payroll taxes over 10 years. Equity exceeded that goal in only four years.
This investment by the City accelerated the ability of Equity to position Tower East as the premier address in Shaker Heights for professional firms in growth mode. The renovations, true to the Modernist theme of Gropius’ design, were critical to this success. New tenant Mannik & Smith Group, an engineering consulting firm, was attracted to the building as well as to the walkability of the Van Aken District location. It joins other innovative firms in the building such as BioMotiv and its unique approach to commercializing therapeutics with partners like University Hospitals.
SMALL BUSINESS FINANCIAL EXCHANGE
Not all of Tower East’s tenants are large firms, and the Vision Fund also allowed a former Shaker Heights resident to expand her small business to the building. Carolyn Hardin-Levine started the Cleveland operations of the Small Business Financial Exchange in her home before moving into offices in Beachwood.
The company offers data exchange to any financial institution or business that provides credit to small businesses. As Hardin-Levine added employees and watched the progress of the Van Aken District, she wanted to return to Shaker Heights.
“Small businesses are the backbone of our economy,” Hardin-Levine says, “and part of our mission.” This aligned with the unique and local retailers available in the Van Aken District and led to a suite in Tower East. The location and iconic nature of the building were attractive, but it was the “good cost in a great building” and the ability to expand over time that made it an ideal choice.
The remaining challenge was the cost of relocating and expanding – from building out the space to furniture and file cabinets – that are significant for a small business. The City’s loan program helped to finance some of these costs.
“We were very judicious in our approach” says Hardin-Levine, “and knew the economics would allow for a repayment within one year.” The business has grown from six to 10 employees since relocating and is in the process of expanding to the adjacent space. Hardin-Levine recently wrote to thank the City, saying “The program played a role in making it possible for us to grow in a way that helped our business succeed long-term.”
Thinking about long-term growth was also on Protem Health Care’s agenda from their office near Equity Engineering’s original Warrensville Center Road location. A provider of skilled home health care services, this office was demolished as part of the reconfiguration of the Van Aken Boulevard and Northfield Road intersection. Suddenly losing their office led owners John and Ada Nworie to search for a building they could own.
While the search included locations in Cleveland and other nearby areas, the City showed the Nwories a building on Lee Road that it owned through a tax foreclosure.
“Everything had to be replaced,” says Ada in her second-floor office that looks across Lee Road towards The Dealership. But the Shaker Partnership Loan, a program of the City, Cuyahoga County, and the Small Business Administration, allowed them to do substantial renovations. They also qualified for the Lee Road
Storefront Renovation program, funded through Cuyahoga County and administered by Shaker, for the costs associated with new signage.
The new space allowed the business to grow while adding a second business, Alliant Treatment Center, on the first floor. “Being by the Rapid, this location is ideal,” Ada says, “and being accessible makes people want to come and apply.” Home health care is a rapidly growing business and demand for skilled workers is high. The benefits of being in Shaker Heights – such as public transit accessibility and safety – are a competitive advantage for Protem and Alliant.
The investment by the Nwories paid off by allowing them to grow their businesses while the City returned a formerly vacant building to productive use. The benefit to the City from increased payroll and property taxes is straightforward, but the bigger longterm impact is strengthening the Lee Road commercial corridor. With Protem and The Dealership anchoring the Chagrin Boulevard intersection, Process Canine is quickly transforming the southern stretch of Lee Road near the Scottsdale border. Multiple additional investments are being made in between, creating more value for the City and its residents.
In the bigger picture, the culture, values, and diversity of Shaker Heights that make it the ideal choice for residents also make it the ideal choice for growing businesses. With office spaces ranging from the contemporary Van Aken District to the Modernist Tower East, and from small office buildings to co-working space along Lee Road, every business can find a potential home. The Shaker Vision Fund and Shaker Partnership Loan allow the City to co-invest with businesses, accelerating their growth while benefiting the City, the businesses, their employees, and residents who have more services, and jobs, a short trip from home.