Children's Museum of Cleveland gains control of Euclid Avenue mansion in $50,000 deal

December 9, 2014 [Michelle Jarboe, The Plain Dealer]

A quiet real estate deal that closed Tuesday augurs a second chance for a small Cleveland cultural institution and an expansive house on the city’s onetime Millionaire’s Row.

A company tied to the Children’s Museum of Cleveland paid $50,000 this week for the empty Stager-Beckwith mansion, which slipped into foreclosure in 2012. Now the historic home, at times a residence, a private club and a university, will enter yet another life cycle as a playground and classroom for infants and young children.

There are two story lines here, converging in new opportunities for a museum with growth aspirations and a troubled property that begs for care.

The house, built in the 1860s and long occupied by the private University Club, was renovated a decade ago for Myers University. Since 2008, when Myers went belly-up, the 66,000-square-foot mansion has been sitting vacant, deteriorating.

Then there’s the museum, crammed into an old Howard Johnson restaurant in University Circle, underperforming its peers in other cities and staring down a deadline to move. The museum’s current site, leased from nonprofit group University Circle Inc., could be cleared in mid-2015 to make way for a high-rise apartment tower.

“This location has always felt a little transient, a little like a temporary facility,” Maria Campanelli, the executive director, said of the museum’s longtime location. “We need to move this institution. We don’t have a lot of money. We have a very constricted timeline.”

Small museum thinks big

Marrying the museum and the mansion offers a creative — though still challenging — path forward. The nonprofit needs to raise roughly $8 million to renovate the house and build new exhibits, no small goal for an institution of its size. During the fundraising and construction period, the museum might have to move to short-term digs. Or close for a stretch.

“There is absolutely the potential that we may be without walls, but still may be able to provide a community and public benefit,” Campanelli said. “I don’t think the dark time is going to be years and years and years. We would like to believe that we could keep it at a year.”

Developer Michael Chesler, who has teamed up with the museum, said he’s exploring ways to tackle the mansion renovations in phases. That approach might allow the museum to move in sooner, even if the final project isn’t complete.

“Our idea is to try to keep their lights on,” said Chesler, president of the Chesler Group of Russell Township. “We’re working breakneck. … Our plan is to do some interim, stabilization construction within the next 90 days. Literally [Wednesday] morning, there are going to be men in that building.”

The museum, which focuses on children from birth to 8 years old, serves an average of 100,000 people each year at its building or through outreach programs. Demographic data show those children and families hail from a wide array of backgrounds, including many low- to middle-income households. Museum visitors are roughly split between east and west siders and between Cuyahoga County residents and people who live further afield.

With only 6,000 square feet of exhibit space in an 11,000-square-foot building, the museum is much smaller than its counterparts in Kansas City, Milwaukee, Pittsburgh and other peer cities. Campanelli believes that, based on conservative estimates, the museum could increase traffic by 30 percent with a larger space, new exhibits and some marketing.

That’s where the Stager-Beckwith house, at 3813 Euclid Ave., comes in.

The museum could more than double its footprint, to 25,000 square feet, with nearly half of that allocated to exhibits and the rest for birthday parties, events and basic necessities, such as parking for strollers. Other parts of the building might be rented out to nonprofits or businesses focused on early childhood development.

Rocky road for gilded real estate

Cuyahoga County initiated foreclosure proceedings on the mansion in late 2012, after unpaid property tax bills piled up. The city of Cleveland, which lent money it will never recoup for the Myers project, tried last year to structure a deal involving Chesler and the museum.

But that plan fizzled after a pipe burst during last winter’s brutal cold snap. Water damage and flooding added to the renovation costs for the mansion and cut into the price the developer was willing to pay. An out-of-town investor looked at the building but didn’t make a compelling offer, said Tracey Nichols, the city’s economic development director.

So the foreclosure case moved along. And the mansion hit the auction block, with little fanfare, at two sheriff’s sales last summer. The minimum price was $750,000, but nobody bit. Blame the tax delinquencies, water damage, roof problems and a protective easement on the building that would prevent a developer from knocking it down or modifying the façade.

After the failed auctions, the property headed into forfeiture. The Cuyahoga County Land Bank, formally known as the Cuyahoga County Land Reutilitzation Corp., recently picked it up. On Tuesday, a for-profit company formed by museum board member Doreen Cahoon and her husband, Dick, acquired the mansion for $50,000.

That’s a far cry from the $1 million purchase price the city proposed in 2013.

“If you have to pay $1 million before putting a shovel in the ground, you’ve basically taken a hard project and made it into an impossible project,” said Gus Frangos, the land bank’s president. “The laws were designed specifically to allow land banks to act as this intermediary to make properties that are otherwise near-impossible become productive.”

Cleveland is out more than $4.5 million on the decade-old Myers loan. Cuyahoga County won’t see those back taxes. But the mansion, the only remaining 19^th-century house of its kind on Euclid Avenue, won’t linger in limbo.

“The city is glad that this beautiful historic landmark may be saved and put to good use,” Nichols wrote in an email earlier this year. “While the city’s loan is a loss, our reserves will cover it. In the end, our goal has always been to restore the building and bring new jobs and vibrancy to the area.”

Timetable remains unclear

Campanelli wouldn’t put a firm timeline on the museum’s move. The museum still plans to work with Chesler to pursue federal and state historic-preservation tax credits for renovating the mansion – a process that takes time, since the state credits are limited and competitive. Cahoon and her husband have pledged $1 million to the museum’s campaign for its new space, but there’s a lot more fundraising to do.

“I feel confident,” said Cahoon, who lives in Cleveland Heights and has been involved with the museum for 14 years. “Until now, since we didn’t actually have the building, the best we could do was talk to people and say ‘If we did this, would you contribute?’ Once this happens, we can go back to everyone.”

Chris Ronayne of University Circle Inc., the museum’s landlord, said the nonprofit neighborhood group hopes to take possession of the current facility this summer. Local developers Mitchell Schneider and Sam Petros are working on schemes for an apartment tower that would replace the museum and occupy a 1.9-acre site at Euclid and Stearns Road.

“University Circle Inc. is very interested in making sure that the children’s museum has a suitable permanent home but also, if it seems appropriate, a swing space, an interim home,” Ronayne said, adding that empty space at the Western Reserve Historical Society might be a possible short-term location.

“We all know that the current facility doesn’t meet modern needs for a children’s museum, and everybody’s rooting for a children’s museum in Cleveland.”