The Cleveland Guardians are exercising an option on acquiring the second of two properties that were offered to it when the team extended its lease on Jan. 1, 2022, to play at Progressive Field for at least another 15 years, a city source says. The property it will acquire this time is the huge Gateway East Garage, 650 Huron Road East, in Downtown Cleveland for $25 million and could set the stage for a full or partial demolition of the 29-year-old garage for a "ballpark village" redevelopment.
The L-shaped garage and its 3.3 acres of land extend south from Huron and then east along Bolivar Road to near East Ninth Street. At the east leg of the garage is the first of two properties the Guardians bought under terms of the lease. In April 2022, the team paid $2 million for a half-acre parcel at Bolivar and East Ninth. Both properties were owned by the Gateway Economic Development Corp. which owns Progressive Field where the Guardians play home games. Gateway also owns the neighboring Rocket Mortgage FieldHouse where the Cleveland Cavaliers and Cleveland Monsters respectively play their home basketball and hockey games.
According to the city source who spoke on the condition of anonymity, the garage is being bought to "improve fan experience." In the short term, that means improving security at the garage where a Guardians employee was robbed of her car and purse at gunpoint in July. In the long term, it may mean partially or completely demolishing the 1,650-space garage to build a ballpark village, which may include shops, restaurants, offices, residences and a hotel. That could also include building a new garage that would be designed to allow structures to be built above or around it.
Such ballpark villages are being pursued by professional teams in multiple sports because their revenue doesn't have to be shared with their leagues and can be used to attract more athletic talent and to provide revenue streams to finance improved stadiums and arenas. NEOtrans first wrote in 2021 about the possibility that the Guardians would seek to buy the Gateway East Garage.
Curtis Danburg, vice president of communications and community impact at the Guardians, did not respond to an email sent by NEOtrans late last week seeking confirmation or comment on the reported transaction. But in 2021, he explained that the garage purchase is part of an overall plan to renovate Progressive Field that was reached between the Guardians, the city of Cleveland, Cuyahoga County and Gateway Economic Development Corp., landlord for Progressive Field.
"The (Guardians baseball) club has been offered the opportunity to purchase the garage, which services Progressive Field," Danburg wrote in an email to NEOtrans in September 2021. "The purchase opportunity is available to the club for a two-year period once the new lease commences."
The Guardians' new lease at Progressive Field starts when MLB's 2023 regular season ends one week from today. In the event the team purchases the Gateway East Garage, the lease requires that sale proceeds will be used to fund the city’s annual $2 million commitment towards the Public’s Ballpark Contributions and shall assign future naming rights sale proceeds to the team. The Guardians' 15-year lease has two optional five-year extensions which the baseball could exercise at its discretion.
A source familiar with Gateway-area real estate development says the Guardians are focused right now on the $202 million worth of renovations to Progressive Field, rather than on development around the ballpark. Ballpark renovations are underway and will continue until the start of the 2025 season. But the club's current majority owner, Chairman and CEO Paul Dolan, reportedly isn’t the one interested in developing real estate around the ballpark anyway.
Instead, that interest belongs to East Coast billionaire David Blitzer, who bought a 25 percent stake in the Guardians last year. His minority ownership would also put him on a path to acquire a majority stake from Dolan in 2026. Blitzer and fellow East Coast billionaire Josh Harris are partners in Harris-Blitzer Sports & Entertainment (HBSE), which has developed real estate around the venues for teams they own — the Philadelphia 76ers basketball, the New Jersey Devils hockey plus their minor league teams, the Delaware Blue Coats basketball and the Binghamton Devils hockey.
As NEOtrans has recently reported, multiple sources close to HBSE and to Bedrock Real Estate, founded by Cleveland Cavaliers owner Dan Gilbert, say the two groups are coordinating their efforts to plan mixed-use developments near the stadiums that activate on a year-round-basis more economic benefits from the two Gateway-owned sport facilities. Bedrock acquired a large 3.17-acre Gateway-area property earlier this year from Stark Enterprises to, as the same sources contend, build a large, year-round entertainment complex associated with Gilbert's Cavs and Monsters teams. Bedrock officials have yet to comment on that, however.
The city and Gateway are eager to see the money-losing garage sold as they are responsible for its upkeep. In 2016, the city made more than $3 million worth of improvements to the Gateway East Garage, primarily to support activities surrounding the Republican National Convention including the creation of a 300,000-square-foot media center in the garage. In that year, despite sellout crowds and additional parking activity from the Cleveland Cavaliers winning the championship and the Indians playing in the World Series, the Gateway East Garage lost $1.3 million, city documents show.
The half-acre parcel bought by the Guardians last year was proposed to be developed in 1998 by the baseball team's then-owner Richard Jacobs and his Jacobs Group real estate firm. He planned to build a 14-story, 252-room Courtyard by Marriott hotel on the site. But then-Mayor Michael White reportedly blocked the project because it would erase an “elegant green space.” The land has remained undeveloped ever since.