As Cleveland struggles with a litany of economic problems ranging from the loss of manufacturing jobs to a high home foreclosure rate, it is rebounding with new projects centered on medical technology, especially cardiovascular care.
The biotech sector is powering Northeastern Ohio's transition from reliance on manufacturing to a diversified approach that emphasizes research and development. The Cleveland Clinic, ranked among the nation's top hospitals by U.S. News &World Report, is building an $868 million expansion that includes the $506 million Sydell and Arnold Miller Family Pavilion.
“We'll have a real, growing cluster of cardiovascular companies,” says Tom Sudow, a director at the Global Cardiovascular Innovation Center. “It's state-of-the-art innovation that's going to lead to continued improvement in patient care and quality of life.”
The 1 million sq. ft. pavilion rising among an army of cranes on the city landscape will house the Cleveland Clinic Heart and Vascular Institute and the $119 million Glickman Urological and Kidney Institute. They are expected to bolster the city's status as a beacon for medical research and treatment.
Construction will start in early 2008 on the $250 million cardiovascular innovation center, a 65,000 sq. ft. “accelerator” with lab and office space for 20 companies. Adjacent to the clinic, it will draw firms developing heart-related devices and offer access to researchers at several hospitals. The targeted completion date is 2009.
Developers are planning commercial structures to house new biotech firms expected to flock to the city. Builders anticipate a surge of specialized workers, from 25 to several hundred employees for each company.
Like other Rust Belt cities, Cleveland watched smokestacks shut down as manufacturing shifted overseas. Ohio's unemployment rate soared to nearly 14% in the 1980s as steel mills closed, and property tax revenue shriveled while Cleveland's population dwindled.
In the 1990s, as the metro area revived, its unemployment rate dropped, resting at 3.9% in 2000. It rose to 5.9% by September 2007, according to the Bureau of Labor Statistics.
More recently, home foreclosures skyrocketed. In the third quarter of 2007, some 16,332 foreclosures were filed in metro Cleveland, a 179% increase over the third quarter of last year, reports RealtyTrac.
But the encouraging news is that the region's hospitals and cluster of 30 universities and colleges have attracted more than $450 million in venture investment in the last three years, says Carin Rockind, a vice president with Team Northeast Ohio, a joint venture of area chambers of commerce. Medical imaging companies also contribute to area growth with advanced X-ray and MRI equipment.
Chicago-based Merchandise Mart Properties, owned by Vornado Realty Trust, plans a $350 million medical mart in Cleveland to capture business from the 270 medical trade shows and 2,000 conferences held annually in the U.S., says Mark Falanga, senior vice president.
The 500,000 sq. ft. mart would house permanent exhibits such as operating room equipment. Funded by a sales tax, the project's expected completion date is 2010. “We're in the process of identifying a site,” Falanga says.
Along with business development, the city is sprucing up its cultural institutions. The Cleveland Museum of Art is undergoing a $258 million expansion and the Cleveland Institute of Music has a $32 million upgrade.
After years of population loss, Sudow points to a healthy sign: “We're starting to see people come back.”