Wexford Science and Technology tapped as master developer for Midtown innovation district - Crain's Cleveland Business

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A Baltimore-based developer of innovation districts scattered from Phoenix to Philadelphia is preparing to tackle a similar project in Cleveland in a long-term endeavor that could remake a stretch of Midtown.

A group of local partners led by MidTown Cleveland Inc., the Cleveland Foundation and JumpStart Inc. recently picked Wexford Science and Technology as the master developer for the innovation district, a multibuilding, mixed-use vision that might take a decade to realize.

The conceit is that Cleveland needs a central space for collaboration, a place that brings researchers, students, established companies, startups and neighborhood residents together to accomplish more than they'd be able to achieve on their own.

Such districts often are tied to anchor institutions, such as hospitals or universities. But their backers strive for an open, walkable ethos that's a departure from traditional ivory-tower academic buildings or antiseptic research parks.

"There's a whole story, generally, behind these," said Julie Wagner, a nonresident senior fellow at the Brookings Institution and president of the Global Institute on Innovation Districts.

"Part of it has to do with a philosophy around a collaborate-to-compete paradigm," she said, "a recognition that there's not one actor or one organization that has all of the knowledge necessary to solve all of our vexing problems."

In Cleveland, economic-development leaders arguably laid the groundwork for a district 10 years ago, when they rebranded a swath of Midtown as the Health-Tech Corridor and began pitching new and renovated space to growing companies, health care users and other tenants.

In recent years, the Cleveland Foundation and nonprofits MidTown Cleveland and JumpStart have talked about connecting those investments as part of a true innovation district, with additional buildings, public gathering spaces, transit and trails.

A linchpin for the plan fell into place last year, when the Cleveland Foundation chose the northeast corner of Euclid Avenue and East 66th Street as the site of its future headquarters.

Wexford's first building will sit just west of the foundation's future home, on 1.7 acres of vacant property that MidTown Cleveland bought from the city's land bank in April. It's too early to say how large that building will be or what it will look like, said Tom Osha, Wexford's senior vice president of innovation and economic development.

"We want to take our time," said Osha, who described Wexford's innovation districts as long-term investments heavily shaped by the communities that surround them. "We want to do it right, and we want to make sure we're doing it together."

With more than 20 years of experience in institutional real estate, Wexford is among the nation's foremost developers of innovation districts. The privately held company finances its projects through a partnership with Ventas Inc., a Chicago-based real estate investment trust.

Cleveland-area leaders have made pilgrimages to St. Louis to see the Cortex Innovation Community, a 200-acre district where Wexford has developed buildings that are home to labs, academic research facilities, a biotech incubator, fledgling firms and Fortune 500 companies.

That district, woven into residential neighborhoods, is flanked by universities, medical centers, cultural attractions and public spaces. Managed by a nonprofit board and supported by Washington University in St. Louis, the district is home to more than 400 businesses.

"We all left inspired by the possibilities," said Ted Carter, chief economic development and business officer for Cuyahoga County and a participant in one of the Cortex visits. "I don't think anyone left the trip saying this wasn't possible here."

Last year, MidTown, JumpStart and the Cleveland Foundation launched a formal search for a master developer. They vetted a small list of candidates and put the decision to a selection committee comprised of nonprofit and institutional representatives and community members.

"We intend to have residents and the community involved in every step of the planning and design of this project," said Jeff Epstein, executive director of MidTown Cleveland. "That's core to the philosophy of how we, at MidTown, are looking at development."

At this point, there's no formal development agreement for the district. The soonest construction might start is late next year, Epstein said.

But there's a powerful group of players working with Wexford and coalescing around the concept of creating a better sense of place — and new opportunities for education, training and employment — at the midpoint between downtown Cleveland and University Circle.

Case Western Reserve University and Cleveland State University, which bookend the district, confirmed that they're part of those discussions.

CWRU "sees research, innovation and economic process as inextricably linked," Lisa Camp, the university's chief of staff in the office of the provost, wrote in an emailed statement.

Harlan Sands, Cleveland State University's president, views an innovation district as an asset that will help the university recruit and keep faculty and attract students, who increasingly want a clear sense of the types of careers and workplaces that might be within reach after graduation. CSU has talked about establishing a physical presence of some sort in the district, Sands said.

"We're in the infancy stages of looking at this," he added. "I'm really, really optimistic about the creativity I've seen so far. I think Wexford is going to be a good partner."

JumpStart, which moved its offices to Midtown almost a decade ago, could become an anchor tenant in Wexford's first building.

CEO Ray Leach described the innovation community in Cleveland as decentralized. With better cooperation in a district designed for interaction, he hopes barriers will fall for businesses, institutions and residents of majority Black, low-income neighborhoods on the city's East Side.

"I'm envisioning hundreds of millions of dollars of more capital, tens of thousands of jobs, a real ability to make an impact around racial and economic inclusion," Leach said. "I think this is the kind of project that has to happen in order for us to find new and different ways to collaborate."

JumpStart is one of five organizations, along with the Cleveland Foundation, the Fund for Our Economic Future, the Greater Cleveland Partnership and Team NEO, steering a broader initiative called the Cleveland Innovation Project. That alliance is attempting to reposition the regional economy, with a focus on health care, smart manufacturing and water technology.

The project's key goals include developing talent, boosting the flow of private capital to growing businesses and reducing stark gaps in Clevelanders' digital literacy and internet access.

Midtown is one logical site — though not the only potential location — to concentrate activity in those target industries, said Baiju Shah, senior fellow for innovation at the Cleveland Foundation.

Since the inception of the Health-Tech Corridor, developers in the area have built or renovated more than 1 million square feet of real estate that isn't tied to hospitals or research institutions.

Anything that Wexford develops must connect "seamlessly" to those existing assets, Shah said, describing a district that should feel cohesive, but not contrived.

"The goal of the district is not to have a company relocate 1,000 jobs from somewhere else," Osha said. "The goal of the district is to be able to attract 100 organizations, small and large companies, that each have 10 jobs. It's the same 1,000 jobs, but it's more robust. And in a lot of ways, it's far more sustainable."

The Cleveland Foundation still aims to break ground this year for its headquarters and to move into the building in mid-2022. That relocation, from downtown, dovetails with a broader vision of turning East 66th Street into a new gateway into the Hough neighborhood to the north.

"This effort isn't just about the initial partners coming together to get this off the ground," Ronn Richard, the foundation's president and CEO, wrote in an emailed response to questions from Crain's. "This innovation district will only be a success if equity and systems-breaking work are at the core of every aspect of the initial vision and its implementation into reality."

Mansfield Frazier, a 77-year-old resident and business owner in Hough, participated in the developer-selection process.

Historically, he said, neighborhood residents have been left out of development discussions — or included only as an afterthought. Midtown's approach, by contrast, is refreshing. And so is Wexford's, Frazier said.

"It's exciting," he said. "I'm a futurist by nature. I like innovation. I like to think of what possibilities are, and Wexford has a great track record of working in minority communities, inner-city communities in general. … I don't think they're coming in with preconceived notions. I think they want to listen well. I get the sense that they want to listen and take input from the community."

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