The article is published as part of an exclusive content-sharing agreement with neo-trans.blog.
More than 4,000 federal employees based at Downtown Cleveland’s Anthony J. Celebrezze (AJC) Federal Building, 1240 E. Ninth St., are reportedly going to be moved out of the 32-story office tower to privately owned office properties Downtown in the next three years, followed by AJC’s closure, according to a spokesperson for Congresswoman Shontel Brown (D-11) who opposes the sudden move.
The federal government is reportedly willing to pay millions of dollars in leases per year because it could be cheaper than paying a $175 million backlog of building repairs at AJC, a figured cited as motivation for the building’s closure by the General Services Administration (GSA) which oversees federal government properties.
After the 665,000 square feet of occupied offices at AJC are moved out, the 1.2-million-square-foot building will be closed and likely offered to local and state governments first. If there are no takers, then it would go to a public sale offering by the GSA.
“There’s a three-year runway for this,” said the source at Brown’s office, who spoke to NEOtrans on background. “Normally this is a 10-year process. They will put out RFPs (requests for proposals) and look at (office) lease opportunities. While they seem committed to keeping the (federal) workforce and services Downtown, this merits some skepticism given the backdrop of DOGE (Elon Musk’s Department of Government Efficiency).”
“We are very concerned that this ultimately could lead to a reduction of the federal workforce in Cleveland and the services provided to people,” the spokesperson added. “The odds of this penciling out to the benefit of the taxpayer seems pretty low.”
The GSA will reportedly secure new leases over the next year for the 30 agencies now located at AJC and retrofit those spaces for each agency’s needs in the following two years. It isn’t known how the 665,000 square feet of space needs currently used at AJC will be needed in the future. While the GSA is bringing people back into the office by pursuing the end of remote work, DOGE is eliminating federal jobs and services.
A source who spoke to NEOtrans on the condition of anonymity said that all requests for bids and proposals relating to the maintenance and repair of the 59-year-old AJC building were canceled. That’s despite or because of millions of dollars in additional reconstruction of the building’s mechanical, electrical and plumbing systems proposed last year.
“If a pipe ruptures, water could cause major damage to these systems, lead to a building shutdown, and create expensive repairs,” the GSA said. “These system failures would require the displacement and rehousing of the 30 tenant agencies that currently occupy 665,000 usable square feet in the building. GSA estimates that it could take upwards of five years before the repairs/replacements would be completed and the tenants would be able to return to the building.”
Those potential repairs to the building’s infrastructure follow a $72 million interior renovation announced in 2019 but apparently was not carried out. That comes after a $121 million building facade security and energy efficiency improvement project completed in 2016.
Furthermore, NEOtrans has also learned that GSA identified at least four large, privately owned Downtown office buildings with multiple open floors of available space to handle large blocks of federal agencies. Among those reportedly being considered are the old Sherwin-Williams headquarters, 101 W. Prospect Ave., and the former Oswald Companies headquarters, 1100 Superior Ave.
NEOtrans reached out to a GSA spokesperson as well as to spokespersons at Detroit-based Bedrock, owner of the old Sherwin-Williams headquarters and to Colliers First Vice President Cyndie OBryon, leasing agent for 1100 Superior. None responded prior to publication of this article. This article will be updated if any respond.
Although the new Sherwin-Williams headquarters has seen its planned opening delayed until October, the old 900,000-square-foot HQ, dating from 1930, was offered by Bedrock to Cuyahoga County for its proposed 893,120-square-foot consolidated courthouse project.
County Executive Chris Ronayne told NEOtrans last month that the four candidate locations for a consolidated courthouse will likely be whittled down to two finalists in the second quarter (April-June) of this year. Ronayne did not respond to a NEOtrans inquiry today on whether the AJC building might be added to the courthouse candidate sites.
State or local governments have a right of first refusal to acquire excess federal property before it is offered to the general public, according to the GSA’s Web site. As long as there is a public purpose, there is no restriction on the use of a federal property.
“If there is no further need for the property within the federal government, the property is determined ‘surplus’ and may be made available for other uses through a Public Benefit Conveyance,” the GSA noted on its site. “As a Public Benefit Conveyance, the property can be substantially discounted in price — up to 100 percent reduction in fair market value — if it is used for a qualified public use."
The former Oswald Centre at Superior and East 12th Street has large, multi-floor blocks of contiguous office space that are available for lease. The 21-story, 575,086-square-foot building was built in 1972 but renovated in 2006. It is only 36 percent leased, according to broker Colliers. Oswald last year moved its HQ to the newly renamed Oswald Tower at Flats East Bank.
Four federal agencies represent about 80 percent of the occupied space in the AJC building, the source said. Those agencies are the U.S. Coast Guard, Defense Finance Accounting Service (DFAS), Internal Revenue Service, and Veterans Administration. Brown’s office noted that DFAS accounts for 2,000 workers alone. And the Coast Guard offices have special security needs.
Last week, Congresswoman Brown sent a letter to the GSA outlining her concerns about the AJC disposition. It was followed by Cleveland Mayor Justin Bibb issuing a statement about wanting to understand the timeline and other issues involved in possibly closing the AJC building.
“I am working with the city and Downtown Cleveland Alliance in the case that the federal government sells the building, to find new homes for those jobs in existing office space downtown,” said Councilman Kerry McCormack, whose Ward 3 includes downtown.
“If we can relocate those jobs to other buildings, and the federal government enforces the back-to-work (policy), we could actually see an increase in folks reporting to Downtown from that workforce,” he added. “That would also assume the job levels stay the same, which of course is not guaranteed in this climate.”
McCormack also noted that the city is undertaking a study to assess the condition of its facilities, its space needs and what it might need in the future. That includes where the city currently owns and rents office and storage space. If the city could acquire the federal building for a big discount and centralize workers there, it could save it money from having to rent, renovate and/or build new space.
“Ideally, the federal government keeps that building and has their workforce report back to work,” he said. “But we need to be ready if that does not happen.”
For more updates about Cleveland, sign up for our Cleveland Magazine Daily newsletter, delivered to your inbox six times a week.
Cleveland Magazine is also available in print, publishing 12 times a year with immersive features, helpful guides and beautiful photography and design.
