Getting back to Square one

Local developer Peter Rubin offers new focus for Shaker Square

By Lee Chilcote

It’s hard to resist comparing Shaker Square to its new fangled imitators. Despite their attempts at faux-urban design– from the brick-lined sidewalks to the cheery lampposts – the new “lifestyle center” pays a kind of unconscious tribute to the Square and its predecessors.

One of the first outdoor shopping areas in the country when built in 1929, Shaker Square has its own legacy that Peter Rubin, its new owner, is hoping can be dusted off, shined up and made viable again.

There are, however, lots of challenges in bringing back the Square. Redeveloped five years ago with new shops that tried to offer an alternative to suburban malls, it didn’t fare well after suffering the loss of anchor tenants The Gap, Wild Oats and Joseph-Beth Booksellers. Ultimately, the lack of profitability in that iteration of the Square caused the new owners to hand their asset back to Key Bank and walk away.

Rubin owns a development firm called the Coral Company, which has a track record of bringing successful retail to Cleveland’s first ring suburbs. After successfully bidding to become the new owner, he has already secured major tenants to fill some of the gaps left by other stores’ departure.

Will Rubin’s plans be enough to revive the struggling Square? Can this retail district compete with newer suburban developments? At the heart of it, the Square’s redevelopment begs this key question – can a genuine retail ‘village’ with a 75-year ‘legacy’ of serving an urban neighborhood defeat its imitator? Perhaps more importantly, should it even try?

LEE CHILCOTE: Shaker Square was redeveloped several years ago, with millions in private and public investment. It reopened to great fanfare, but quickly lost several anchor stores. It’s been hemorrhaging ever since, and is currently at nearly 50% vacancy. What happened?

PETER RUBIN: I’m not sure what qualifies me to be an expert on that question. I have views about it, like everyone else that cares about Shaker Square. I’ll offer them, but they’re certainly not gospel.

The redevelopment in 2000 brought a lot of new life to the Square. A lot of the good things that were done are still there, or their indirect impact is still there – from physical issues, like the expanded space that became the grocery store, to the image that was created that Shaker Square is a place to go for entertainment. The cinema reopened and restaurants were added that continue to thrive and attract a really diverse audience.

So I’m asked a lot, what happened? People are expecting some negative answer about all of the bad things that happened. I think it’s important for people to remember all of the good things that have happened and still remain. When we stepped in last December and began working on Shaker Square, we were three out of four rungs up the ladder already because of what had been done by the previous owners.

The pieces of that redevelopment that are no longer there, that didn’t have staying power, probably had to do with some external factors, and some internal factors. The grocery store that was put in hasn’t done well at their other location in the regional market, either. They had some serious operating issues, and their market appeal was relatively narrow. It was an organic, health-conscious grocery store with a quite limited offering, and it was smaller than competitive stores. This meant that it had to execute exceptionally well to be successful, because its market was smaller. The problem was complicated by issues of access, security and parking that everyone was concerned about at Shaker Square.

The bookstore is a sad instance of the fact that there are too many bookstores – there’s saturation of the market. Since Joseph Beth opened that store, they opened another store in the market, and Barnes and Noble opened a store at Eton Collection. So if you live somewhere in between, suddenly you have choices, and this cut into the business of the store at Shaker Square. Most of the other stores at the Square have done reasonably well. So I think it was partly the market, partly execution and partly operations.

LC: Some say that the previous developers, in going for a more upscale audience, missed a potential market. Do you feel there’s any truth to that, in the sense that the mix of retail at Shaker Square didn’t appeal to many of the residents living around the Square?

PR: That may be the case. Wild Oats has a narrow audience. A lot of smart people thought that Shaker Square was a place that this audience would come to, but either because the audience wasn’t there or wouldn’t come there, or because they didn’t execute the concept well enough to make that audience happy, this turned out to be a mistake.

When we started studying the demographics of Shaker Square more closely, one of the conclusions that we came to is that Shaker Square is a city itself. If you look at the demographics of the fictional city of Shaker Square, it’s really diverse – racially, economically, educationally. This means that for Shaker Square to be the town center for that city, it needs to be diverse.

Most of the businesses that opened with the previous development are still there. It’s an unfortunate media problem that the ones that closed are the big ones – the Gap, Wild Oats, Joseph Beth. These businesses don’t represent the majority of the merchants, who are still doing well despite several years of ugly turmoil.
Every retailer delivers to a certain market, and our job now is to put together the retailers that will deliver to the people that live in the fictional city of Shaker Square.

LC: Tell me about your plans for the Square’s redevelopment.

PR: I think where our vision for Shaker Square veers off from anything that’s been considered before is in seeing the Square in two realms – the private realm and the public realm. All of the attention of the last 75 years – and Shaker Square is celebrating its 75th birthday in November – has been paid to the private realm, the space behind the storefronts and the entry doors. Of course, we’ve been spending a lot of time dealing with that realm, and finding the right tenants, the right grocery store, the right retailers. We’re trying to come up with a diverse offering of retailers that feed off of each other, so that each time we put a merchant in, it adds value to the others.

Where we’ve veered off is in the public realm, which has essentially remained the same at the Square for the last 75 years – even as conditions in the private realm and the community around it have changed. Without going into detail about the improvements we’re pursuing, it is our intention to convert the public realm into active public space. Performance space, social space, interactive space. We’re working on a collaboration with several community stakeholders interested in public spaces. We want to create reading gardens. We want performances in the summer. We want Shaker Square to be a place people remember not just because you can walk around and window shop, but because there’s activity here.

The green space on either side of the rapid tracks is publicly owned. The quarter acre, semi-circular pieces of land on the north and south sides of Shaker Boulevard are a part of what we own. We have several million dollars worth of public infrastructure improvements planned.

LC: There’s a lot on the drawing board right now – outdoor performance space, an ice rink, a reading garden and a children’s garden. Are you receiving any public subsidy for this project?

PR: We’re getting a lot of public investment in our effort to redevelop Shaker Square, and not just in the public spaces. One of the strengths of the Square, and ultimately of Cleveland, is the willingness of all of the stakeholders with an interest in Shaker Square to invest in it. It’s no secret that the Cleveland Foundation is lending us money on a low interest basis to help make this happen – as well as the Cleveland Development Partnership, NPI, the city of Cleveland and other sources. This project is being funded by a real community patchwork of capital sources.

As far as the performance space located on the south side of the Square goes, it’s pretty firm that that’s what we’re going to do. We want to build a performance platform with some kind of covering over it, a structural roof, space that is fully electrified and amplified. There would be seating cut below grade so that people could sit on blankets, lawn chairs. We’ve had a lot of feedback on the ice rink on the north side. There may not be an ice rink, it may just be a series of passive gardens where people can sit and read.

LC: Have you encountered any skepticism from the partners that were involved in the redevelopment a few years ago?

PR: No skepticism. Some of the people now providing financing did so five years ago, so there’s disappointment on their part, but no skepticism or unwillingness.

LC: Tell me a little bit about your background. What draws you to taking on such a large project as Shaker Square?

PR: I moved to Cleveland when I got out of law school 25 years ago, to an apartment on Kemper Road. Shaker Square was the place I went to, both to take the Rapid downtown to work and for my household shopping. I was new to Cleveland, and I thought Shaker Square was a really unique place. In all of its lives, it’s always had this sense of place and arrival that so many developers are now trying to create out of whole cloth. It’s here. It’s in place. It’s been evolving for 75 years.

When I moved to Cleveland twenty five years ago, I never dreamed I’d have the opportunity to be Shaker Square’s steward. And it’s a perfect evolution of the Coral Company’s growth curve. Our business is to focus on urban and First Suburban redevelopment. We have a large portfolio of urban retail properties. We are a residential developer as well. We’re local and we’re heavily involved as a company and individually in community affairs. So it’s a perfectly natural extension of what we do. We were also enthusiastic about value creation possibilities. Despite some of the value setbacks that we’ve seen over the last couple of years, we are powerfully optimistic about the Square’s upside potential.

LC: I’m going to ask you the question that I’m sure everyone is asking you – that is, how do you see Shaker Square competing with some of the newer, lifestyle-oriented malls such as Legacy Village?

PR: I don’t think we can compete, and if we tried, I think we would lose. So I think what we have to do is to be different. There are qualities of Shaker Square that you can’t recreate at Eton or Crocker Park or Legacy Village. And there are qualities at those developments we can’t create. We don’t have room for large national retailers. So what we have is a place with two personalities. During the day, it’ll be the community shopping place for your household needs – from groceries on down the line. In the evening, it’ll light up as a cinema and restaurant district. With the second personality, we’ll draw from the entire east side, and probably from the west side too.

The answer is that Shaker Square will not try to compete with Legacy and Eton because we can’t. We will try to remain this sort of iconoclastic, community-based, walking, mass transit oriented, interactive place that people go to because they want a more urban experience – the real thing. They want the real urban experience.

LC: As opposed to the manufactured one!

PR: Or just the new one, anyhow. Someone said to me the other day that Shaker Square has a 75 year legacy. Legacy Village is new.

LC: What about security and parking? Are those concerns that people have about the Square?

PR: Big concerns. We’re working with Shaker Square Area Development Corporation and other stakeholders to find more parking, for one thing. All of Shaker Square has 500 parking spaces, so there’s enough parking, but one of our issues is that we need to make it more accessible and easier for people to find. This won’t solve the problem, but it’ll help. So we’re undertaking a graphic design research project to create a single visual icon for Shaker Square. There are four different logos that appear at the Square now – that’s a bad way to run our business.

We need to play on the incredible value of the Shaker Square brand, and we’re going to do that in one way by coming up with a single, architectural, visual icon. Then we want to use it over and over again to let people know where the Square is. The effort to let people know where parking is shouldn’t begin when you get to Shaker Boulevard. It should start at Coventry and Buckeye and 116th and Fairhill! And at the Shoreway… we’re talking to ODOT about getting signage for the Shoreway, so that people start identifying where their destination is when they get off at the exit.

For the parking, we want an icon that will take them right to a parking space. We need to repeat a message over and over again about how to get to the parking. Generally, shoppers become invested in the process, which they go through to get to the grocery store and back. University Square, at the corner of Cedar and Warrensville, is a pioneering effort to get people to shop in a different way – in a vertical mall. What you have to do, when you try to get people to change their patterns, is to give them the signals they need to change direction.

Security is also critical. Shaker Square doesn’t suffer from a lot of security breaches; it suffers from bad public relations. For one thing, we’re going to preach how safe and secure Shaker Square is. But we’ll also continue what Key Bank started, which is continuous patrols, and raising the quality of security, not just the quantity. There’s a complement of private officers and off duty public officers that patrol the Square continuously. We’ll implement a system where they’ll check into each store on a regular basis. They’ll keep walking around the Square and poking their heads into the stores, asking if everything is OK. We want to spread their presence around and get the most out of it.

LC: What’s your targeted retail mix? What kinds of stores do you hope to attract?

PR: There are two categories, household convenience and shopping. That’s the daytime personality, such as a grocery store, shoe store or optical store that will complement the stores that are already there. We want to try to create as broad a mix of household, day-to-day stores as we can get.

The other category is restaurants that complement what we have now as well as the cinema. There are restaurants there now – Luchitas, Sushi on the Square, Ballaton, Yours Truly and Fire – so we need to add restaurant selections that fit somewhere in between.

We have a commitment from another high-end restaurant to take over the Bronte space. We’ve signed a lease with an ice cream shop, which will fit in and provide folks with another option for dessert, to keep them at the Square a little longer. We’re in discussion with several casual eateries, because they will complement what we have here currently. We’ll stay away from any use that will be directly competitive with the restaurants we have now.

LC: I understand that you have a letter of intent signed with Dave’s Supermarket.

PR: We actually have a signed lease. Dave’s was our first choice all along. We were told that the reason the Coral Company was selected by Key Bank and the people they consulted with was because we are locally owned, and this is our hometown. I live nearby and shop at Shaker Square. Dave’s is our counterpart in the grocery business. [Dave’s owner Bert Saltzman] really understands Cleveland, and particularly how to serve diverse demographics. And they’re a healthy, growing company. They’re opening a store in Akron, their first venture outside the Cleveland marketplace. We had discussions with all the grocery store chains you could list and more, and our first choice all along was Dave’s. They understand the market best, from providing an expanded prepared foods and takeout selection, to the day-to-day groceries that people need – Cheerios, milk, bread…

LC: Do you have any other signed leases?

PR: We have commitments from East Coast Original Custard and Sergio’s – they plan to open a second restaurant on the Square.

LC: Do you think that you can provide enough options that people who live near the Square can do the majority of their shopping there?

PR: That’s why I said earlier that we won’t try to imitate Legacy Village. These lifestyle centers are not intended to be your household shopping place, and they’re not about convenience. When someone goes shopping, they’re looking for value in one of several ways. They’re looking for price value, selection value and convenience value. The last one, convenience value, is really time. What’s the most important commodity people have when they shop today? Time. That’s what neighborhood shopping is about.

Obviously, we think the answer to your question is yes, because we’re investing a lot of money in that answer! If we make it easiest for people who live around the Square to do their grocery, camera and shoe shopping here, they will. We have to make it more convenient for them – we have to save them time. It’s up to the merchants to deliver competitive price and product.

LC: What about local versus national retailers? Do you find it difficult to attract national retailers to the Square, given what’s happened over the last few years?

PR: There are two challenges to attracting national retailers here. One is that Shaker Square is too small for them. We’ve been contacted by many of the country’s largest retail chains, but we don’t have a way to accommodate them. We had a major retailer that wanted 100,000 square feet – all of Shaker Square is only 160,000!

The second challenge is that we don’t happen to believe that the Square is a national retailer location. If you’re going to be the community shopping center, you have to provide community businesses and merchants. There will be some national retailers here, but they will be in categories where we couldn’t find local merchants.

LC: You’re planning a condo building behind Shaker Square. What are your targeted price points, and who do you hope will live there?

PR: At this point, all of our thinking about the residential piece, which we’re calling One Shaker Square, is intuitive. We’re excited about the residential portion of the development, and that’s because there are few locations on the east side where you can be at a public transportation place to get to the Browns game easily – or to the next World Series! It’s also very close to University Circle.

So we think the targeted buyers are going to be downtown workers and people who work at University Circle. They’ll also probably be young professionals or mature couples (empty nesters or close to empty nesters).

This demographic consideration helps to drive what the unit layouts and sizes will be. We’ll be in two price points – units in the lower end range, around $200-$250,000, for a young professional or couple, and others in the $400-500,000 range for large, generous units targeted towards mature couples.

LC: How many years down the road is this?

PR: Hopefully there will be two years of planning and approvals, and then we’ll break ground in 2006. There are very few physical infrastructure limitations we’ve come across yet. The biggest issue will be understanding the market, doing the research to make sure that we design the right product, and then making sure it fits in, that we accommodate community and city concerns.

LC: Where will it be located?

PR: Behind the former bookstore space is a parking lot. We already own the property, so we’re hoping to work out an arrangement for structured parking, so that Moreland Courts will be able to utilize the parking as well. They currently have parking that is simply a cover over at-grade parking, and this is very inefficient.

As our interview came to an end, Rubin indicated one last time that he’s excited about the possibilities at Shaker Square. Time will tell about its ability to compete with suburban developments, but the new tenants signing up hold promise anew.