Price of Progress: Longtime businesses forced out of downtown

4:01 AM, Jul 17, 2012   |    comments
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CLEVELAND -- Downtown Cleveland is an area literally on the rise.

The first private construction project in nearly 20 years is well underway -- a 23-story office building on the Flats East Bank.

But as more businesses are setting up shop in the area, others are being forced out.

Some say it's the price of progress.

As property prices go up, so does the rent. Smaller "mom and pop" stores either go under or move out.

"I think Cleveland has a great story to tell. We have a new convention center, medical mart, the casino," said Cresco Real Estate Principal Rico Pietro.

And this construction has brought competition.

"Now we're seeing trends where a company, maybe from out of town like Chicago, are saying let's consider Cleveland as a potential home," Pietro explains.

Longtime downtown business owners, like Mike The Hatter owner George Anastasakis, couldn't be prouder.

They have, after all, struggled through some dark days.

Many admit the downtown demand is a double-edged sword.

"A lot of the overhead is increasing and especially small business owners have to make some decisions with regarding to the bottom line," Anastasakis said.

Per square foot downtown, Pietro estimates costs have gone up 3% to 5% in the last year alone.

For the first time in 40 years, Anastasakis couldn't afford to pay rent.

"We thought we were close to having a couple of deals done and as it comes around that prices change at the last minute because of what was happening in a positive way downtown," Anastasakis said.

Anastasakis moved his store from Prospect Avenue to a plaza in Broadview Heights.

In a much quieter area, the Mike The Hatter store isn't visible from the road, but Anastasakis remains hopeful that business will pick up.

As for ever moving back to downtown Cleveland?

Anastasakis hasn't ruled that out, but says it would have to make financial sense and at least for now, it isn't the right time.

Still, Anastasakis has kept his humor intact.

"My hats go off, literally, to companies who are giving it a go on the retail side downtown," he quipped.

He says now customers will just need a better sense of direction, or better yet, a GPS.

Meanwhile, Pietro says big retail companies are now looking at downtown Cleveland to open new stores.

He wouldn't give specifics, but says these are national brands that are looking to expand.


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