CLEVELAND — The I-X Center’s announcement early Friday didn’t come as a surprise. Next month’s Piston Powered Auto-Rama will be the final show at the mammoth venue next to Cleveland Hopkins International Airport.
But the future of the property — owned by the city of Cleveland and leased to a group of industrial real estate developers — is up in the air.
Potential tenants are looking at the building. But there’s no deal in place yet.
Consumer-show producers are making plans to move Downtown to the Huntington Convention Center of Cleveland. But some of them are holding out hope that the situation will change. That there might be a path to staying put for a few more years, at least.
The building, a 2.2 million-square-foot behemoth with thick concrete floors, soaring ceilings and an ocean of parking, might seem like a slam dunk for redevelopment. The real estate has obvious appeal.
But there’s baggage — complicated agreements that date back decades, making a reinvention trickier than simply filling space and collecting rent.
“There is a lot going on with the I-X Center,” Tom McNair, the city’s chief of integrated development, said during an interview with News 5 on Friday.
Before getting into the complexities, he wanted to clarify a few things. First, despite lots of Internet chatter, there’s no plan to transform the property into a data center.
“The city of Cleveland has no interest in having a facility that could be so valuable used for a data center, with low jobs,” he said.
Industrial Realty Group and Industrial Commercial Properties LLC, which took over the I-X Center lease in 2021, have flexibility to rent out space there to all sorts of tenants.
But the real estate developers are seeking a long-term lease extension from the city. Tacking decades onto the lease will make the property more appealing to tenants and help the developers justify — and finance — major investments in the site.
McNair said Cleveland won’t agree to an extension for just any deal.
“In no situation will we extend lease terms for an entity like a data center,” he said.
In June, Cleveland City Council approved legislation that lays the groundwork for a 49-year lease extension, along with other changes to the lease terms.
RELATED: Cleveland City Council approves deal that signals the end of events at the I-X Center
But the lease hasn’t been amended yet. It was tied to landing a major employer and hundreds of jobs.
Last summer, the developers were in discussions with an unidentified manufacturer — a Fortune 100 company with the potential to bring more than 250 jobs to the site.
That prospect isn’t necessarily gone. But talks about the company tapered off a few months ago, McNair said. And other potential occupants are looking at the space.
“We have not been told explicitly that the deal is dead,” McNair said of the proposal that was on the table last year. “I think we’ve all inferred it.”
Austin Semarjian, an executive vice president at Industrial Commercial Properties, declined to comment this week.
The developers and the JLL brokerage are still marketing the building for lease.
“Look, that is a facility that could easily hold 1,000-plus jobs, right?” McNair said. “High-paying jobs. Likely a new company to the region. … I don’t think we take that lightly.”
But the I-X Center’s complicated history makes the negotiations harder.
“You look back on this, the I-X Center was supposed to be demolished by now,” he said. “No one ever envisioned a future where that building was still standing.”
Cleveland acquired the I-X Center from billionaire businessman Ray Park in 1999 to make way for another runway at Hopkins — a project that never took off.
At the time, the event facility was actually located in neighboring Brook Park. And the two cities were fighting over several pieces of land.
The cities reached a settlement agreement in 2001, shifting municipal boundaries. They also agreed to share tax revenues from the I-X Center — a deal that, according to the settlement agreement, must stay in place until the I-X Center gets razed.
“It makes it really hard for us to put a job producer in there without losing money,” McNair said.
Prospective tenants are looking for state and local incentives tied to job creation and investments in facilities. “The current arrangement that exists on that property really prohibits us from offering any of those types of incentives,” he said.
McNair hopes there might be a way to rework and simplify that part of the decades-old settlement. News 5 reached out to Brook Park officials about the I-X Center on Friday, but did not receive a response.
“Obviously, these two municipalities have spent a considerable amount of time working together over the last several months due to other deals,” McNair said, alluding to the Cleveland Browns’ planned stadium district in Brook Park and the looming makeover at Hopkins, on the other side of State Route 237.
“If we’re talking about what’s in the city of Cleveland’s best interest – tear it down. Make sure that we get all the tax revenues. Maybe it’s something very airport-specific,” he said. “But there’s a lot of opportunity for everyone to win here. And we think it’s important just to get that conversation going and move it forward as quickly as possible.”
As for the shows?
Industrial Realty Group and Industrial Commercial Properties aren’t in the event business.
And McNair said the developers have been clear about their plan to repurpose the building, where thousands of workers once produced aircraft parts and military tanks.
“I also very much want to clear up the misconception that somehow the city of Cleveland is forcing these trade shows out,” he said. “We think that they are a valuable part of the community. I hope that there’s a way that we can work with all partners and find a solution that works for them to remain healthy, whether that is locating Downtown or ... facilities elsewhere. We’re open to that conversation.”
Michelle Jarboe is the business growth and development reporter at News 5 Cleveland. Follow her on X @MJarboe or email her at Michelle.Jarboe@wews.com.
