Downtown Cleveland casino developer wants to buy Gateway North parking garage

It's a proposal that officials said Wednesday would benefit both sides by helping the cash-strapped city get out from under a garage that is described as seldom used while putting the developer a giant step closer to having a parking plan that could accommodate up to 5 million annual visitors.

Officials at Rock Ohio Caesars say that the casino-goers' experience begins when they park their car. And Rock Ohio Caesars wants to wow them. But officials add that having a seamless parking plan is important for securing financing for the $350 million casino project.

The developer envisions incorporating the 1,000-space Gateway North parking garage into a previously announced $10 million welcome center and valet parking operation that will be built cattycorner from the casino on a square-block area bounded by Ontario Street, Prospect Avenue and High and East Second streets.

The Gateway North garage sits adjacent to the property across High Street and would be incorporated into the project by way of "vehicle bridges" to give the welcome center 1,250 parking spaces -- roughly half of what the developer says it needs for its peak hours.

The welcome center would be connected to the Higbee casino by a pedestrian skywalk that would traverse the Ontario and Prospect roads intersection, officials said.

The operation would be open to everyone visiting downtown. Parking would be free for casino-goers under Caesars' Total Rewards program, and others would pay normal market prices.

City officials said they expect large numbers of people to use the center, creating foot traffic that will stretch for several blocks and benefit the East Fourth Street entertainment district as well as other attractions.

"That makes this a big winner," said Chris Warren, Mayor Frank Jackson's chief of regional development and the city's point person on the project. Cleveland City Council must approve the sale. The debate on the sale is expected to begin Monday.

"The promises that we've made to truly make this casino a two-way connection to the city and the other attractions, restaurants and hotels makes it even more important that we have this parking," said Marcus Glover, general manager of the Horseshoe Casino Cleveland that is expected to open in Higbee in about a year.

"Close, proximate, safe, well-lit parking is essential to the success of a casino," Glover added, because casinos rely on return customers. "We've seen this first-hand."

The proposal announced Wednesday caps about two months of talks between casino developer Rock Ohio Caesars and the administration of Cleveland Mayor Frank Jackson.

Dan Gilbert, whose Rock Gaming LLC had teamed with Caesars Entertainment Corp. to build casinos in Cleveland and Cincinnati, announced early in February that the group would build the first phase of the Cleveland casino in the Higbee building. A second, larger casino is being planned for a 16-acre site on Huron Road a few years from now.

Warren said he believes the $21 million purchase price for the Gateway garage is the fair market value and was negotiated with the developer after several property appraisals.

The proceeds from the sale would allow the city to retire the bond debt left on the garage construction with about $4 million remaining, Warren said. That money would be used to pay down the debt on the city-owned Gateway East garage.

The sale proposal presented to council Monday also will provide for the continuation of a 1,300-square-foot ground-floor public bike station in the garage under a deal in which the developer will lease the space back to the city for $1 a year.

And, at the city's request, tax revenue from the improvements made on the welcome center property, about $130,000 a year, will go toward improvements on the Gateway East garage after the Cleveland school district receives its share.

This 11-year arrangement allows the city to maintain Gateway East without having to dip into its funds. Cleveland City Council members will consider this measure in separate legislation expected to be introduced May 16.

"I think this deal is brilliant," said Cleveland Councilman Joe Cimperman, who represents the area and had been critical of the developer's original parking plan when it was unveiled in March. "It takes something off our books that hasn't been performing."

"We need to be keeping people employed and keeping our services up, not subsidizing a garage that didn't live up to its expectations," Cimperman added. "This is going to help us with that. This deal is amazing all around."