When David Smith was sworn in as mayor of the village of North Randall in 2003, there already were storm clouds on the horizon. The village’s economic driver, Randall Park Mall, was in disrepair and was closing.
“To top it all off, the day I came into office was also the day the lights went out across much of the United States,” the mayor recalls. “That was my first day on the job. I didn’t know then that it was an indication of how things were going to be.”
What followed would be a 15-year economic tempest the likes of which this village of about 1,000 residents had never seen.
When Randall Park Mall opened its doors to fanfare and jubilee on Aug. 11, 1976, it was billed as the largest shopping mall in the world. Built on the former site of the Randall Park Racetrack, the retail venue offered its upscale suburban shoppers the latest in comfort, modernity and class. With its 200-plus stores on two levels and five anchor department stores, it quickly became North Randall’s ticket to leadership in retailing, not only in the state, but across the country as well.
But such fair winds were not to last.
In the 1990s, two of the mall’s anchor tenants left due to the emergence of more popular big-box retail venues. Smaller tenants soon followed. In 2003, a scuffle between a security guard and a shoplifting heroin addict led to the latter’s death and the former’s prosecution for involuntary manslaughter. It was a fatal blow for the once proud venue, as consumers lost confidence in Randall Park Mall as a safe place to shop.
As Smith took office, he realized the importance of the mall to North Randall’s fortunes. It became a singular mission to rebuild or repurpose the property.
“Developers would come to town and pretend to have an interest in the mall,” Smith says. “But we were told to give up, to turn out the lights and leave the keys at the door so the state could take over.
“We were told we were not going to get any assistance paying our bills, that we should annex into the city of Warrensville Heights or any of the other surrounding communities. We were told that we would not be able to sustain ourselves as a village.”
There were money woes. The village considered selling its fire department’s ladder truck and cancelled its midnight police shift to save $8,800 a month. In 2009, after years of decline, its taxes in arrears, the once vibrant retail venue was stripped down to the bare bones.
“I was in high school back in the 1980s, so the Randall Park Mall was my hangout,” says Deb Janik, senior vice president of Greater Cleveland Partnership, whose organization would play a key role in bringing the property back. “I walked through it once at the end, while it was still standing, and it was ghostly. It was like that scene from Titanic, where it shifts from the emptiness of the shipwreck at the bottom of the ocean to the scene of people in grand attire standing on the stairs and walking around. And I said, ‘Get a hold of yourself!’”
“I wanted to change the zoning for the Randall Park site from retail to light industrial,” recalls Smith. “We attracted a few more developers, but we still got flak for it because everybody wanted it to be a retail hub.
“So, as time went on we experienced even more adversity, but I kept telling my administrative staff that adversity builds character. I told them that we were a sleeping giant that would one day wake up.”
In 2011 the village of North Randall acquired the Dillard’s Department Store property for $2,500, eventually selling it to developer Stuart Lichter, chairman and president of Industrial Realty Group (IRG).
By 2014, the pride of North Randall was being torn down.
Through it all, Smith continued to champion the 100-acre property’s redevelopment. But there was some sunlight on the horizon.
“We had an opportunity for Dan Gilbert and his group to acquire what is now the Jack Racino, which meant that they could bring slots into the racetrack,” says Smith. “It was a good step forward, but I knew all along that it wasn’t a panacea. It wasn’t the be all and end all. We needed more.”
In 2014, IRG announced that it would seek to redevelop the 100-acre property into an industrial park. It was an ideal location because of its close proximity to major highways like I-480 and I-271.
“I was in a meeting of about 70 people, and I was told that Seefried out of Atlanta was also interested in the property, but they didn’t tell me who they were, and I didn’t know who they were from the man in the moon,” says Smith. “But they told me the code name for the project was ‘Goliath.’ And I thought, ‘We’re not a sleeping giant any more.’”
Three months later, Smith signed a confidentiality agreement. That’s when he learned that one of the largest eCommerce companies in the world, Amazon, was considering a move to town.
“I couldn’t even tell my wife,” he says.
Closing the deal took an effort that rivaled the size of the proposed multimillion square-foot facility — Greater Cleveland Partnership, Team NEO and JobsOhio all came together as regional partners to make sure the deal came to fruition. Even the Warrensville Heights City School District, which serves North Randall, as well as Warrensville Heights and Highland Hills, played a role, signing off on a tax abatement deal that made the project possible.
“I really have to credit Mayor Smith,” says Janik. “He was the one who really put this project on his back.
“Our role at the GCP was to serve as the local partner that was part of the Northeast Ohio Regional Economic Development System. We had to do that working in tandem with our regional partner at Team NEO and, of course, we had to corral the multitude of public partners that all came to the table to make this a success.”
Janik took the primary lead on the North Randall facility, while Vince Adamus, vice president of real estate and business development for GCP, took the lead on a second proposed facility at the old Euclid Square Mall site.
“We worked very closely with Christine Nelson [vice president of projects, sites and talent] and Camille Billups [senior director, project manager and site selection] at Team NEO as well as our Columbus-based project manager Matt Deptola from JobsOhio, and were able to put together partner deal teams to pursue a tremendous opportunity to collectively bring more than 3,000 jobs to Cuyahoga County.”
By 2017, Janik thought the North Randall deal was in pretty good shape.
“That’s when Vince came into my office and said, ‘Euclid is a go.’” Janik recalls. “And I said, ‘Are you serious?’ But my mouth was agape, and I asked, ‘What, no North Randall?’ And he said, ‘No. Both.’”
Construction at North Randall started later in 2017, which also created and supported many local jobs.
“Even before we launched our North Randall Fulfillment Center, we created thousands of jobs for local construction companies,” says Mark Stewart, vice president of North American customer fulfillment for Amazon.
Some Northeast Ohio-based companies that assisted with the construction of the North Randall Fulfillment Center include Kelley Steel Erecters Inc., Zavarella Brothers (masonry), Ullman Electric, The K Co. (HVAC), Gorman Lavelle (plumbing), OCP Contracting and the Petty Group.
The North Randall Amazon Fulfillment Center, affectionately known as CLE2 by Amazon’s employees, opened in September. It boasts more than 855,000 square feet on the ground floor. Including all of its floors, the building spans more than 2 million square feet.
The facility utilizes products and inventory handling advancements, such as Amazon’s robotic technology, vision systems and almost 20 years’ worth of software and mechanical innovation to fulfill customer orders. When fully operational, it should employ more than 2,000 folks, by Amazon’s conservative estimates, and maybe as many as 2,500 by estimates from economic sources outside the company.
Estimates are that the other fulfillment center coming on line next year, in Euclid, will employ more than 1,000 Amazon associates. According to published reports, the investment in North Randall alone is somewhere north of $177 million — a figure the company would neither confirm nor deny.
“While we have not disclosed the specific investments for these two fulfillment centers, what I can share is that Amazon has invested more than $3 billion in the Ohio since 2011, in both customer fulfillment infrastructure and compensation to its employees in the state,” says Stewart.
The jobs so far at Amazon fulfillment also pay very well. Across the country, Amazon has created more than 130,000 new jobs last year alone.
“Recently, we announced that the company has increased our minimum wage to $15 for all Amazon employees — full-time, part-time, temporary and seasonal,” says Stewart. “The Amazon $15 minimum wage, which went into effect on Nov. 1, is on top of our industry-leading benefits — including comprehensive health care on day one, 20-week paid parental leave and Amazon’s innovative Career Choice program, which prepays 95 percent of tuition for courses in high-demand fields."
“Obviously, people will have the opportunity to be employed there,” says Brad Sellers, mayor of nearby Warrensville Heights, “But the Amazon facility also brings with it a strength that will empower the entire area for economic redevelopment.”
Which hasn’t been overlooked by Amazon.
“An Amazon presence in Ohio means more than just the jobs provided within these four walls,” says Stewart. “In addition to the creation of more than 6,000 full-time jobs [across Ohio], using methodology developed by the U.S. Bureau of Economic Analysis, Amazon estimates its investments in Ohio have created an additional 15,000 indirect jobs on top of the company’s direct hires.”
Needless to say, the two fulfillment centers will have a very positive impact on our entire region’s economy.
“Having Amazon as a part of the Cuyahoga County economic ecosystem is terrific for our economy,” says Cuyahoga County Executive Armond Budish. “We know they will be bringing new jobs — both direct hires and other jobs that will result because of businesses that will be supporting the Amazon associates working in the centers.
“New jobs mean more career pathways for our residents. I am pleased with the location of the new facilities as well. North Randall and Euclid and the surrounding municipalities will benefit greatly from these new facilities.”
The economic impact, sans taxes, will be substantial indeed. The direct impact of jobs is estimated to be $175,315,091 per year in salary and benefits. Indirect compensation with jobs that will come from the spending by the new 3,000 Amazon employees is estimated to be $93,657,549 per year, according to Cuyahoga County officials. The two new facilities will also turn surrounding vacant properties into productive uses, increasing property values and property taxes as well.
“The new Amazon Fulfillment Center is a tremendous boost to the Euclid economy,” says Euclid Mayor Kirsten Holzheimer Gail. “The project creates new jobs, generates property and income tax revenue and positions Euclid for future growth.
“The project will improve the city’s tax base through the direct generation of real estate and income taxes. Spin-off development will further help to increase the tax base.”
Like its North Randall counterpart, the Euclid Amazon Fulfillment Center is also repurposing property that has fallen into disrepair and was not generating any income.
“As a result of a lack of maintenance and commercial viability, Euclid Square Mall had become unsafe, unsightly and tax delinquent,” says Gail. “The Amazon Fulfillment Center is a perfect reuse of the mall property. Not only has the former mall been removed, but it’s been replaced with a modern, attractive building and employment center.”
Like North Randall, winning the Euclid facility was also the result of a collaborative effort by the state of Ohio — JobsOhio, Team NEO, Greater Cleveland Partnership, Cuyahoga County, Cleveland-Cuyahoga County Port Authority and the city of Euclid.
“Additionally, we worked hard to promote the benefits of locating in Euclid, such as great access to the interstate highway system, two major rail lines and major public transportation routes,” says Gail. “Euclid is a jobs hub, which means it is located close to the region’s available workforce.”
The Euclid project is already generating interest from other potential commercial and industrial users that are interested in Euclid, says Gail. The city is fortunate to have other available land and buildings near the Amazon site to accommodate more growth. In addition, the influx of new jobs in the city’s industrial corridor will also create increased demand for retail establishments, such as restaurants or fitness centers.
Such development is being planned around the North Randall facility.
“The real elephant in the room is the old Days Inn at the corner of Northfield and Emery, which is being torn down to make way for future development,” says Smith. “From what I understand, the land is going to be used as a retail hub. From that point going south on Northfield there will be restaurants and other retail establishments.”
“I think you’ll see restaurants, eateries and entertainment centers,” says Janik. “But the real issue becomes how do you leverage the site to bring in additional industries beyond those public-serving institutions? Will we need additional centers like FedEx or UPS? Or will we need a cold storage facility because of Amazon’s recent acquisition of Whole Foods?”
For its part, Amazon already has announced a program that will help entrepreneurs build their own delivery companies that will service the North Randall site, as well as others around the state. The company will take an active role in helping interested entrepreneurs start, set up and manage their own delivery business.
According to the company, successful owners can earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles. Individual owners can build their business knowing they will have delivery volume from Amazon, access to the company’s sophisticated delivery technology, hands-on training and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance. These budding entrepreneurs will join a robust existing community of traditional carriers, as well as small-and-medium-sized businesses that already employ thousands of drivers delivering Amazon packages.
But that is just the tip of the iceberg.
Although he describes Amazon as a “market disruptor,” Alex Boehnke, manager of public affairs for the Ohio Council of Retail Merchants, also believes the eCommerce giant has been good for local economies, as well as retailing in general.
“They have been a market disruptor for some time now, and they are not going away,” says Boehnke, who estimates that some 90 percent of retail is still done at traditional brick and mortar stores. “Even though many retailers have been disrupted by Amazon with its online presence, it has forced many of our members into some exciting and fantastic innovations with traditional retail. A lot of people don’t realize that Walmart is the second largest online retailer.
“There is also an opportunity for smaller merchants to sell on platforms like Amazon because it is fairly easy and convenient to do it, even from their own home.”
Amazon’s fulfillment network supports millions of businesses of all sizes worldwide through its Fulfillment by Amazon offering, says Stewart.
“Some of these businesses are local organizations based right here in Ohio,” he says. “There are more than 55,000 authors, small and medium-sized businesses, and developers in Ohio growing their businesses and reaching new customers on Amazon products and services.”
All of which proves the point that what is old can be new again in Northeast Ohio.
