PZ - June 18th 2015

Planning & Zoning Commission
Workshop Meeting Minutes
Mayfield Village
June 18, 2015

The Planning and Zoning Commission met in workshop session on Thurs, June 18, 2015 at 7:30 p.m. at the Mayfield Village Civic Center, Main Conference Room for a meeting of the Planning and Zoning Commission. Chairman Pro-Tem Syracuse presided.

ROLL CALL

Present: Mr. Vetus Syracuse (Chairman Pro-Tem), Mr. Garry Regan, Dr. Sue McGrath, and Mr. Paul Fikaris

Also Present: Mr. Mark Guidetti (Law Department), Mr. Ted Esborn (Economic Development Director), Mr. John Marrelli (Building Commissioner), and Ms. Deborah Garbo (Secretary)

Absent: Mr. Jim Farmer (Chairman), Mr. Bill Marquardt, Mayor Rinker, Mr. Joseph Saponaro (Council Alternate), and Mr. Tom Cappello (Village Engineer)

 

PROPOSAL

  1. Conditional Use Permit Trojan Storage                      
    600 Beta Dr.
    Property Owner: Weston, Inc
    Oliver Architecture

OPEN PORTION

Chairman Pro-Tem Syracuse called the meeting to order. This is a workshop meeting of the Planning & Zoning Commission. We won’t be taking any vote tonight.

Kevin Oliver with Oliver Architecture introduced himself. We’re looking at 600 Beta Dr. as an indoor self -storage facility. Referencing site plan, the existing building is approximately 90,000 square feet. The inside is totally empty. The current owner has a big air handler in there to move some air around. Other than that, nothing’s going on at the site right now.

We’re proposing to renovate the building, re-clad the exterior, redo paving, site work, etc. We’ll install self-storage units on the interior that are climate controlled, new fire protection alarms, & security system. In addition to several loading & unloading areas, there’s a drive-thru access so clients can come in through an overhead door, load and unload inside the facility and then leave.

The leasing office person on duty will monitor security. Other than that, the vast majority of it is storage use.

Mr. Marrelli asked, household or business storage use.

Kevin Oliver replied, some household and some business file storage. I don’t know that break down.

Ted Esborn asked if this is similar to the facility at 271 & 422. Kevin said yes.

Ted Esborn looked at that facility. It seemed to be open to whomever, businesses or individuals. The smaller units were a mix of 5’ x 10’ and 10’ x 20’ units.

Kevin Oliver said 5’ x 5’, 5’ x10’, & 10’ x 10’. Once you get into the 10’ x 20’ & 20’ x 20’ ones, those will be either businesses or a very specialized use.

Mr. Marrelli asked if you can put cars in there.

Kevin Oliver replied, sometimes.

Mr. Marrelli asked about fire protection with cars in there.

Kevin Oliver said that area gets handled from the fire protection and mechanical ventilation standpoint specifically.

Mr. Marrelli asked if the indoor units have tops on them, lids.

Kevin Oliver replied, no. The ceilings are 18’ high. The storage walls go anywhere from 8’ – 9’ high. They put a netting or wire mesh material on top.

Mr. Regan said the concept is to walk in with your box, go to your unit, put your box away and then walk out, correct?

Kevin Oliver replied, correct.

Mr. Regan asked, in each of those sections you could conceivably have 20 or 30 people moving in and out?

Kevin Oliver said conceivably that’s true, practically that doesn’t happen. If it’s a weekday and 4 people come all day, and they happen to come at the same time, the manager will have a small party. It just doesn’t lend itself to that. What will most likely happen, people will take advantage of the drive-thru, come in do their thing and get out. Construction wise inside, there’s not electrical outlets for people to set up camp. It’s meant to store your stuff and be on your way.

Mr. Marrelli asked, what about when somebody decides to abandon their unit and it’s time to clean it out and throw everything away? Do you have dumpsters?

Kevin Oliver replied, no dumpsters. The owners have a group of vendors who they say; “I have 5 units to clean out”. They come in and clear them out. It’s not something they do a whole lot. It’s not something they look forward to.

Mr. Marrelli states, I’ve had experience with this in a place I worked before. When people store things for a long period of time and they get tired of paying the bill, they go in and try to downsize. Half the stuff ends up in the hallway and outside because there’s nowhere to throw it away and they’re not going to take it back home.

Kevin Oliver said that’s a management issue. Staff watches out for that.

Mr. Regan isn’t familiar with this type of operation. When somebody applies, and I understand privacy, is there any way of knowing what they’re bringing in, i.e. firearms or gasoline?

Kevin Oliver replied, they sign what they can’t bring in, but no one checks.

Ted Esborn states, the Warrensville Hts storage has set hours vs. 24/7. I think 6 am - 10 pm. Those are the only hours they could access their units.

Kevin Oliver said access is controlled from someone having the ability to enter the building and then the unit. It’s not come and go as you please 24/7.

Ted Esborn said the facility I observed had nobody accessing units from the outside of the building.

Kevin Oliver states, there are no exterior access units here either. They get swipe cards or a key pad.

Mr. Marrelli asked, when somebody stops paying their rent, they shut off their code?

Kevin Oliver replied, the manager would padlock their unit.

Mr. Fikaris asked if this is a franchise. There’s one in Johnston Pkwy Cleveland.

Kevin Oliver replied, yes.

Mr. Fikaris said some of the research I read factored into their plan, your storage is a secured debt. Your stuff comes in and more times than not most of the stuff goes away. It’s like adding on a garage and filling it. This thing is big, 90,000 sq. ft. Research shows the market has tripled since 1998. There are 44 self-storage facilities in Cuyahoga County. The demand for storage units is driven by the 4 d’s; Death, Divorce, Disaster & Dislocation. Is the new ownership going to self-manage?

Kevin Oliver replied, they’ll own it and manage it themselves.

  • Impact on Safety Forces

Mr. Fikaris asked if there’ll be cameras.

Kevin Oliver replied, they typically do cameras in all the entrances and exits, in and out and a camera in each hallway depending on level of security.    

Mr. Marrelli asked, if you have a client break in, is that handled internally or by our Police Department?

Kevin Oliver doesn’t know the answer. I’ve never heard of that happening. You’d have to know the stuff you want is in there, where it is, and be able to get into the building.

Mr. Regan said, with regard to the 4 d’s; Death, Divorce, Disaster & Dislocation, I can see this for example; “That’s my stuff my “ex” put in that storage facility”. That’s a potential Police Dept issue.

Mr. Marrelli states, I know our Police Dept is probably not going to want to have to go in there with issues on 900 units. One of the guidelines we look at on the conditional use is if it will put any additional demands on our safety forces.

Kevin Oliver said, I can’t tell you exactly how they handle break-ins, only that there’s perimeter fencing, perimeter doors and locks on the units themselves.

  • Economic Impact

Mr. Regan has concern about the economic impact to the Village. Are there any instances where there’s a tax or fee levied so there’s some income generated to the City or Village?

Ted Esborn replied, nothing jumps to mind. It’s not an admission situation.

Mr. Guidetti doesn’t think anything would apply.

Mr. Regan states, you’re renting space. Is there some way of levying a tax on the rental of one of these? I like the idea of getting rid of another eyesore on Beta. This is a rehab into a very nice building, but it doesn’t generate anything. How many employees?

Kevin Oliver replied, typically 1 or 2 employees.

Mr. Marrelli asked, do they drive a golf cart up and down the aisles?

Kevin Oliver replied, something such as that.

Mr. Regan said I’d look at this a lot differently if you could generate something for the Village to cover the potential impact and secondly it’s a big space that’s now being converted into something we will never get any revenue from.

Mr. Marrelli asked if Trojan Storage is going to buy the building from Weston, Inc.

Kevin Oliver replied, Trojan Storage will do the project and buy the building.

Mr. Marrelli asked Kevin to do the math. I don’t know how much they’re going to pay for the building and how much it’ll cost to wrap and build it out. But, at some point in time they must have done the numbers to say if this thing takes off, it’ll be “x” years before it starts paying for itself.

Mr. Fikaris shares some facts from The Self-Storage Association International;

  • The average revenue PSF varies from facility to facility. However, here are the data for Q4 2014: $1.18 PSF for a non-climate controlled 10 x 10 unit and $1.51 PSF for a climate controlled 10 x 10 unit.
  • The asking rent for a 10 x 10 unit in the U.S. (Q4-2014) is averaged at: non-climate controlled $118/month & climate-controlled $151/month.

Mr. Marrelli said you have about 70% leasable space out of 90,000 sq. ft. That’s almost $100,000 / per month. And we get what?

Mr. Fikaris said that’s the point and historically this stuff stays.

  • Conditional Use Guidelines

Chairman Pro-Tem Syracuse has some of the same concerns. There’s something I see repeated in the responses by Trojan Storage in addressing the ten Guidelines that this Board is supposed to consider:  

“Self-storage facilities will provide the needed additional storage for businesses and individuals moving to the area”.

“America and the local market is voicing the demand for the population’s need to store personal effects”.

“The population within a 10-mile radius is currently underserved by self-storage. A facility of this type will serve current Mayfield Village residents, attract new residents, and attract residents from surrounding communities”.

“Many businesses will be able to use the space for overflow of extra products, supplies, or archived paperwork”.

My question is, have you or anyone from Trojan Storage discussed this with any individuals or businesses in Mayfield Village to see if they had any interest or need for storing anything at this facility that would benefit people who reside or businesses that are in Mayfield Village as opposed to the surrounding communities?

Kevin Oliver replied, I have not. I don’t know that Trojan Storage has. They look to these markets to find places that are underserved from their research. It’s not that fine grain of a research. It seems to be the trend, whether it’s people’s parents moving into townhomes and getting rid of stuff or businesses that are running out of space or going paperless and are required to keep documents. Those are ways people & businesses use self-storage. I couldn’t tell you who the specific people are.

Chairman Pro-Tem Syracuse said, there’s really no businesses or people in Mayfield Village that you know for sure that would benefit from this. Have you had any specific discussions with anyone?

Kevin Oliver replied, no.

Chairman Pro-Tem Syracuse said this could actually benefit people from other communities at the Village’s expense when it comes to tax benefit for the Village.

Mr. Marrelli said my experience with companies that are growing out of space, they go to their landlord and say; “I need another 10,000 sq. ft”, and a partition wall gets moved.

Ted Esborn said there was a point where I considered surveying Mayfield Village businesses to ask if they have a need. I decided not to do that without talking to the Commission first. I was curious if the businesses would respond positively to the need, information we could probably get pretty quickly. I’d want the Commission to be o.k. with that first.

Mr. Marrelli asked, how many of our businesses are actually producing a product that they’re storing?

Ted Esborn replied, I think this is paper, not product storing.

Mr. Fikaris said, 95% of the stuff in a storage facility depreciates. That old adage, if you don’t use it in 6 months, you don’t need it. I wonder about demand. The market’s pretty saturated. It’s easy to bail on this thing. It’s not like a manufacturer coming in with a lot of infrastructure. There’s a sizable investment but this can be converted pretty quickly if life turns differently.

Mr. Regan said opposed to the conditional use permits we see, this is a potential owner asking for a permit. Either they’ve paid cash or have a mortgage to pay. If this self-storage doesn’t work, they’ve got a building. In our case, we’ve got a better looking building when they’re done than what we have today. We’re getting nothing from the building today. Now we have a potential owner who will upgrade and bring it to code. It’s a business that won’t generate much for us, although I’d like to slap a fee in there. If it doesn’t work, they’ve got a building that they’ve either paid for or continue to pay for and they’ve got to do something with it or we’re stuck with a better looking eyesore than what we had before.

Ted Esborn understands it would be $3 million in construction costs. I think I remember the building to be $4 million. We’re looking at a $7 million investment.

Kevin Oliver said I haven’t gone through that building with other potential businesses. The potential builders I’ve gone through with to get a sense what it’ll take to make this a viable building to use, is that there are some big ticket items even if you didn’t re-clad the building.

Mr. Regan said with cost of capital, that’s a 10 or 11 year payoff.

  • Storage Items

Mr. Marrelli said there’s no way to control the material that goes in there. If you’re a contractor, you could put your heaters & 2 x 4’s in there.

Mr. Regan asked, are you going to pay $150 a month to store that stuff?

Mr. Marrelli said no, I’m going to charge it to you on your room addition.

Mr. Fikaris refers to the Self-Storage Association Facts on what’s needed to rent one of these. It says Driver’s License, home & work number, e-mail address, second contact, etc. There’s all kinds of things that go on that storage facilities have had problems with including drug storage. Will there be outdoor storage if I want to park my RV in the lot?

Kevin Oliver replied, no outdoor storage.

Mr. Marrelli said I have a bad feeling how the Police & Fire are going to look at this. They’ll get calls. People will get in disagreements. People will say someone tampered with their stuff or someone tried to dial their combination. It’s always easier for management to call the Police to figure it out. Can you set it up where you do your own policing, security?

Kevin Oliver will look into that.

  • Revenue Generated
  • Delivery of Safety Services

Mr. Regan said, charge $1.60 per sq. ft. and the Village will take the dime.

Mr. Guidetti said not only are the safety services responding, they’re responded in small quarters. From a fire safety standpoint, how good of a fit is this building for this use? I can’t imagine many facilities where you have an 8’ – 9’ foot gap from the top of the unit to the ceiling.

Kevin Oliver said in older warehouse buildings, that gap tends to happen. This use is called ‘moderate hazard storage’. It means we’re storing sheet metal and copper screws. We’ll protect it accordingly. It’s not a fertilizer plant.

Mr. Guidetti asked, has there been any concern about somebody accessing the unit next to them by cutting through the netting?

Kevin Oliver replied, the walls are corrugated sheet metal. The netting and high walls are there. If someone really wanted to climb to the next unit, they’d get a big ladder, clip through the mesh and jump over. Some people are o.k. with that, the others go somewhere else.

Mr. Marrelli said if anybody renting there knows there’s one guy watching that whole building, it’d be pretty easy to dodge him.

Mr. Regan said I’ve observed Village Police patrol that building.

Mr. Marrelli said but they’re not going to get out of their car, walk up and down the aisles inside this building.

Mr. Regan said, having this building dressed up, an employee there, and clients parked there, it’ll be a deterrent for mischief.

Mr. Marrelli said but when you fill it with stuff, everybody wants to know what stuff’s in there.

Mr. Regan heard a comment that statistics are low for break-ins.

Ted Esborn thinks a revenue source would change the calculus of things.

Mr. Regan said, take that plus the ownership operation of the building and it becomes very interesting. It’s not like many of our prior conditional use permits where somebody’s there 6 months, their business fails and they walk away. Here you have an owner. They’re not going to generate our traditional tax revenue, let them generate something else.

Ted Esborn states, the hotel bed tax revenue goes into economic development business attraction funds, if we did something similar to that. Not sure how that would be done.

Mr. Marrelli said we have only so much property on Beta that’s leasable. There’s only so much you can squeeze out of a building. You have to look at what is the percentage of the available lease space on that street that this will upset as far as taking that off the market for actual people working there generating income.

Mr. Regan asked Ted if Trojan Storage went to the property owner to buy the property or to put in a storage facility and the guy said “buy it from me”.

Ted Esborn replied, there’s a shift in the partnership that owns it. Weston’s one of the new partners. You probably remember Bill & Greg West from the Playground World proposal. They are now out. They sold their shares to Weston.

Mr. Regan asked if Weston’s goal is to lease or sell the building.

Ted Esborn replied, they’re simultaneously marketing for both. Terry Coyne is their sale broker. They’re working with someone else to lease it.

Kevin Oliver states, it’s more their model to purchase. Since my involvement, it’s always been to buy this building.

Mr. Regan said, it’s not a terrible eyesore because you can’t really see it from Beta, but you can see it from 271. I’m just thinking use the thing rather than letting it sit there.

Mr. Marrelli states, Diane mentioned one benefit, at least there won’t be more traffic on Beta Dr. at 5:00 coming out of this building.

Chairman Pro-Tem Syracuse states, there’s definitely positives. I like how the applicant has done a great job on addressing these factors that we have to consider. Do the good benefits outweigh the negatives?

Ted Esborn asked, do you think this would be a good situation for a “use variance”, if the voters approve “use variance” and it’s available?

Chairman Pro-Tem Syracuse replied, that’s a question for the applicant. In the world we have right now, there is no “use variance” option.

Mr. Fikaris thinks you need a lot more economic data saying there’s the demand.

Mr. Marrelli said, if there are issues then they’d have to hire more people and change their business plan, get security guards, & maintenance guys.

Kevin Oliver states, we’re looking for success, we’re going to protect this business investment and make a viable business. If it gets so degraded to where we have cops coming every day, we’ve got bigger problems.

Mr. Marrelli asked how long the owners have been in the storage business.

Kevin Oliver replied, 10 – 15 years in Ohio.

Dr. McGrath asked about climate control. Is it heating & A/C?

Kevin Oliver replied, correct. There’s a range between 65 & 78 degrees.

Dr. McGrath brings up concern of someone living in their unit.

Mr. Fikaris thinks there’s an advantage of this being indoors. The 24 hr. access outdoor units have more problems, i.e. hazardous storage & illegal activity. Either way, it’s a cash cow. The stats say over 50% of people say they’ll rent for one or more years. I’m sure if the renter stops paying, they’ll cut you off and take your stuff.

Mr. Marrelli said I heard Kevin say this area needs this kind of storage because people are driving 15 minutes down the highway. Well, you’re not going there every day to visit your stuff. You’ll drive there maybe one time per year.

  • Hours of Operation

Chairman Pro-Tem Syracuse asked about hours of operation.

Kevin Oliver replied, typically 8:00 am – 6:00 pm. After a certain cut-off, no matter who you are, you don’t get in the gate.

Chairman Pro-Tem Syracuse advised that when a conditional use is granted, the Commission puts in the maximum hours of operation so Police and everyone else can patrol accordingly.

Mr. Marrelli asked, is the area fenced off? Are there gates that lock at closing time?

Kevin Oliver replied, we propose gate access to the office & building. To get into the building proper without going through the front office, you have to go through the gates. When management leaves at the end of the day, he locks the gates to keep people off the property.

Mr. Regan states, the Village has an older population. We approved the Planned Residential Development District so people could transition from their homes to other kinds of living. I would think there are people in the Village that would like to clean out their garages, their basements and scale down. I would think there’s as much demand or opportunity within Mayfield Village as there is anywhere.

Chairman Pro-Tem Syracuse said we don’t know that. What I’ve heard tonight is this sounds like a great business opportunity for Trojan Storage, but is it good for Mayfield Village?

Positives

  • Taking the building back as an eyesore, re-build & occupy it.

Negatives

  • 1 – 2 employees. Not generating revenue for M.V.
  • Is this going to be a giant storage facility that becomes a closet for surrounding communities stuff?
  • Will businesses in Mayfield Village want to store their stuff there?

Without the knowledge of this actually benefitting anyone in Mayfield Village, or benefitting us economically, I don’t see how this is really going to help the Village in any way whatsoever.

  • Advertising Signage

Mr. Marrelli said my experience with this type of facility is they throw banners on the fences and advertise boxes for $1.00. Lot of them have U-Haul trucks parked outside that are available. I-271 doesn’t allow for signage. We don’t allow for temporary banners along fencing like I see in Bedford Hts & Randall. That might put a crimp in their business plan for advertising.

Kevin Oliver said speaking of Warrensville Hts now that it’s up and running, good bad or otherwise, they started parking Ryder trucks. Warrensville Hts ordered the trucks be removed 2 days later. All I can say is if there’s a revenue stream by renting trucks and the community allows it, they’ll pursue it.

Mr. Marrelli said my point is they should tell us what they want to do instead of us finding out after it’s done.

  • Tax on Rentals

Mr. Regan said I don’t know what that building was built for or appraised at.

Mr. Marrelli asked if you can tax the contents.

Ted Esborn doesn’t think so. I’ll check to see if any jurisdictions have a tax on rental.

Mr. Guidetti has never seen anything for storage. You don’t know what’s going in there to tax.

Mr. Marrelli was trying to draw an analogy; a hotel rents a room, these guys are going to rent a room, not for people, for stuff.

  • When Renters Default

 Dr. McGrath asked how many renters default. I wonder if selling peoples stuff is a big part of their revenue stream. I have a feeling there’s quite a bit of wholesaling that stuff to some liquidator.

Kevin Oliver replied, that’s part of it.

Mr. Marrelli gives an example. You’re taking care of In-Laws stuff, spending $150 / month until you can get rid of the stuff. What happens next, you’ve been paying on it for one year and into it for $1800. The stuff isn’t worth $1000. You say the heck with it, let them keep it.

Dr. McGrath thinks there’s a lot of defaulting. Adding another to the four “d’s”; Death, Divorce, Disaster & Dislocation. Those are people going through tough times as it is. They’re likely to not keep paying and their stuff gets sold.

Kevin Oliver said I’m not an expert on the financing. There’s no guarantee who you rent to. In speaking to the owners re selling at auction;

  1. It’s a pain.
  2. They don’t get a huge windfall.
  3. They would rather be renting the 10 x 10 unit.

Mr. Regan said, I didn’t want it, now I’m paying $150/month because I didn’t want it.

Mr. Fikaris said, I could have had a used car for all I paid.

NEXT STEP

Chairman Pro-Tem Syracuse said what we’re doing now is coming up with a bunch of hypotheticals. We don’t actually know. We can get more information and come back to another workshop or move to a vote on July 6th.

Consensus is another workshop meeting.

Mr. Marrelli asked if there’s any discussion about the stigma of having storage in your area. Is it socially acceptable now?

Mr. Fikaris said the Self-Storage Association has facts on the moral aspect of hoarding & storage.

Chairman Pro-Tem Syracuse states, I know for a fact as an Attorney that handles a lot of real estate law, sometimes I’ll have clients who are landlords with residential rental properties. Some of the courts require after an eviction if your stuff has not been removed and the bailiff comes to change the locks, they have to store the tenants stuff for at least 30 days. That’s where some of these storage facilities get business from, landlords who are storing stuff that doesn’t belong to them. Without there being many rental properties in Mayfield Village, will this become storage for junk left from surrounding community rental properties? Again, we’re hypothetically coming up with what could be going on in this storage facility. The fact is, it’s not going to generate any revenue for M.V. If we could find a way it could, in my point of view, would make it more attractive.

Mr. Marrelli states, several questions were asked that couldn’t be answered. If we could get the answers to those questions, we’d have a lot better idea how this business operates.

Ted Esborn asked, in case aesthetics is playing into anyone’s mind, do you have a sense of how much the owner would be willing to move on the exterior look of the building. Are they pretty locked into the look?

Kevin Oliver replied, the one in Cleveland was in an industrial district. The process was to make it look more industrial. They had a preferred brand look for their buildings.

Mr. Marrelli said we have an Architectural Review Board that might not be happy about corrugated painted panels.

Ted Esborn states, my thought was a more subtle exterior if anyone had concern about stigma of storage in the community.

Kevin Oliver said from a design & cost, it’s a big building with a lot of exterior. Trojan’s strategy to give it a facelift, we could clad it and put metal panels on the outside cost effectively. We could change colors & texture of that. That’s part of the scale of the façade. Yes, we could tweak it if we need to.

Mr. Marrelli states, the way I see it, this is just metal panels that got painted different colors over windows that are already on the building. All of these windows will still be in the walls, they’ll just be covered with metal?

Kevin Oliver replied, correct.

Mr. Marrelli said it’s not really a build-out, it’s a cover up.

Applicant to return for a follow-up workshop meeting on Thurs July 16, 2015 @ 7:30 p.m.

There being no further business, the meeting adjourned at 8:45 p.m.

Respectfully Submitted,

Deborah Garbo
Executive Assistant
Building Department