The Real Estate Locker Room Show with John Carney
JC 012: Grassroots neighborhood development with Graham Veysey
Welcome to the Real Estate Locker Room Show with John Carney.
Did you know that investing in real estate is a team sport? And John and his guest say they explore the intersection of the business of real estate an athletic competition. The goal for the show is to grant you direct access to the real estate pros that are closing profitable deals and grow their businesses. On the Real Estate Locker Room show, we are getting in the ring with successful investors, developers, operators, and all of the industry professionals to learn what it takes to achieve ongoing success.
Now, it is time to kick off and level up with new ways to grow your real estate business.
John Carney: Welcome back to another episode of the Real Estate Locker Room Show. I am your host John Carney coming at you today from Cleveland, Ohio. And joining me on the line in the locker room is a real estate developer and entrepreneur who is also from Cleveland. His name is Graham Veysey. Correct, Graham?
Graham: You have got it. It’s good to be with you John. Thanks for having me.
John Carney: All right. Welcome to the Locker Room Graham. Graham is a grass roots neighborhood developer living and working in a Hingetown Neighborhood of Ohio City in Cleveland, Ohio. He began this type of work in 2010 as the project director for the 6-acre Ohio City farm, one of the largest urban farms in the United States. The following year, he bought the vacant Ohio City Firehouse and converted that into a vibrant mixed use building. Since then he spearheaded the redevelopment a Hingetown with his wife, Marika Clark. Their developments are part of this group project that works to connect Cleveland Neighborhoods, which is promoting more walking and biking and less driving.
With that in mind, I am going to welcome Graham to the show, and we are going to kick this off today with a question to kind of stretch out to get the conversation going about sports and real estate.
Graham: This is by the way the best known Locker Room I have ever been in.
John Carney: Perfect. That’s good to know. So growing up did you play sports and have a favorite athlete that you looked up to?
Graham: Well, I was a Chicago Bulls fan during the Michael Jordan hay-day. So, the 6’6” man was the guy that I always look to. I think Jordan at that point was my sports icon.
And then as I got a little bit older, I started running a lot. And you have got to just love Prefontaine. But as a guy who is necessarily the most coordinated with his hands, I was always better on my feet and could run long distances. So I did across country and then ran marathons throughout college and even up until few years ago.
John Carney: All right. Cool. So you are still staying active. So Graham we find that like most people who are real estate professionals, especially when you are getting to the development side, you have a very entrepreneurial and business background. Can you let our audience know how you have got into a real estate from urban farming and how you put your team together to get the firehouse deal done?
Graham: Yeah, I think the biggest component is collaboration, and I think that Ohio City Farm was my first development project, which really came out of necessity. There is a giant 6-acre vacant parcel and a group of us got together and said, “How do we re-imagine this space?” And that is the root of development. How do you look at a space and re-imagine it to fit another need or enhance an existing need. So, we took this 6-acre piece of property and brought together all of these stakeholders from the Refugee Response, Great Lake Brewery Company, Ohio City Inc., which is a neighborhood development corporation, and Councilman Joe Cimperman. These were all people who got behind the vision of creating this vibrant urban farm, and it was different than urban garden because we had an economic development component with it. We negotiated the land lease with CMHA which is Cuyahoga Metropolitan Housing Authority, which is the oldest housing authority in America right here in Cleveland Ohio and Cuyahoga County.
That was 7 years ago. It is awesome to walk by there and see the crops and the farm stand open. The majority was farmed by refugees who found Cleveland as their new home.
So, getting that collaborative group of people (and you have mentioned it is “team”) where one guy might be the marketing guru, one guy might be the number cruncher, one guy might even have the balance sheet. You have always got to be focusing on the collaboration because you can’t do it without that.
John Carney: For the listeners who are outside of Cleveland, could you expand a little bit about Ohio City, which has had a massive transformation there over the last decade. And just to put some context to it, you and I have met before. I grew up in Cleveland but I was away for 19 years. You are now ticking over to 20, and there has been a massive change. I know that neighborhood back from my high school days (my high school was in that neighborhood). But you would be a better person to really give the audience the story about the transformation of this urban demographic and then move into the Hingetown aspect, because that’s a component of Ohio City and it is a really neat story.
Graham: Yeah. I think the coolest part about Ohio City is it actually predates the city of Cleveland. It used to be its own municipality and this goes back to the 1800s. So the whole east and west divides Cleveland. You talk to somebody who is from Cleveland and they talk about east side and west side. It goes back to when you had the city of Cleveland and the city of Ohio.
And you have got the great mix of historic housing stock. You have some beautiful brick structures. We have got the institutions like Saint Ignatius High School, copper rust towers and then you have the oldest public market in the city called the West Side Market which is just for foodies. So you have all these different ingredients that when you have the flight in the 70’s, 80’s and even the 90’s from urban centers, you had a lot of vacancy. You had a lot of that historic housing stock plus historic building to take off. Luckily you had a core of these institutions stay like Saint Ignatius and the West Side Market. You also had CMHA and Lutheran Hospital which is one the Cleveland community hospitals. So you still had these places that were rooting the neighborhood. So when people started looking in the late 1990’s and early 2000’s at viable urban spaces to live and to raise a family (because of Ohio City’s proximity to the downtown business core) you had this revitalization take place.
Now, that’s not saying there weren’t people who stuck with it throughout. There were people who stuck with it through the toughest time. But really over the last 10 years, Ohio City impartially because of the work that was done in the Warehouse District and re-imagining of those spaces, you then had revitalization cross the river and into Ohio City and the main drag which is West 25th. In the last 7 to 10 years you have had businesses moving, like Great Lakes Brewery, which is one of those institutions that in last 25 years were in a rough part town now. You have got people who were total micro brew-heads checking them out in over dozens of states. Lebron actually grabbed a Dortmunder Gold the other day in the play offs and pretended on the sideline to take a drink. So you had all this energy around the West Side Market. When I bought the firehouse, which had been vacant for about 5 years, everybody thought of Ohio City as that intersection of 25h in Lorain so right there by the West Side Market. And my wife and I our goal in serendipitously this great couple from Akron, Fred and Laura Bidwell and announced that they were doing this cool contemporary art space called the Transformer Station which they forced to partnership with Cleveland Museum art which is a 100 year old world class art museum.
So how do we create an identity in this part of Ohio City? You have the market district that’s based around the West Side Market. How do you put a label for when somebody says, “I am going to hangout in Ohio City” And so Hingetown really falls at the intersection of Ohio City’s market district, Gordon Square Art District, and the Warehouse District. All of them within a mile (within a 10 minute walk and within a 5 minute bike ride). And we have been working for, in reality, 5 years attracting businesses, attracting other developments, different building or cells, and we have created a great little node of vibrancy, but we know that the city and success of our work is really going to be judged by those missing teeth as Jeff Speck would call them. So that you have a great walk from Gordon Square to Hingetown and from Hingetown to the Warehouse District. And it feels safe, it feels clean and there is activity.
John Carney: And it is great. And it was really interesting to see because those, especially Gordon Square, were something I didn’t even know about. I grew up on the West Side of Cleveland and I went to high school not far away. So when you went from putting together this initiative in really a large collaboration with many different parts of the government and the community for the farm, somewhere there you decided to buy the Firehouse. Was that pretty much your baptism into real estate and development?
Graham: It was. And for me it was out of necessity. I was renting apartment. I have got a production company. We were growing. So, I was renting the studio and I wanted to live above the shop, if you will, and have a place where I both lived and yet could, in the same building, have a studio space. I was at a Christmas party and a real estate broker saw my license plate which was OHCITY (Ohio City) and said, “I have got a great property in Ohio City for you – the old firehouse.” I said, “That’s too far off the beaten path.”
So I wanted to be right in the hub of the activity. Until that point, the hub was really restricted to just West 25th. So I toured and I fell in love with the building. It was originally constructed in 1854 as the city of the Ohio Volunteer Fire Department. I said, “All right. This is great.” My wife, who was at an architecture school at that time, said she put a wall here and wall here. These could be different offices. This could a couple of different retail spaces. So we moved in, we updated the front of the building because it had been basically fortressed because in this part of the neighborhood being a place where activity wasn’t so great anything could happen.
We started to attract everybody from the first third wave of coffee shops to come to Cleveland to the best floral designer in Urban Orchid, and then office tenants. And when Fred and Laura announced the Transformer Station, which is just a really neat spot that any of your listeners who come to Cleveland should check out, we said, “How do we think beyond the four walls of the Firehouse?” And we bought the Striebinger Block which is catty-corner which was a 1919 original construction. We put in 7 retail spaces and 7 apartments. As we continue to grow, there has been added residential. And if you look at Cleveland, you have got the downtown business core. You have got University Circle which is where Case Western Reserve University and the hospital are but besides those two spots there was no other place with as much concentrated development as Hingetown other than the downtown business core and University Circle.
John Carney: That’s a great a great story about reviving a section of a city. Correct me if I am wrong but to kind of summarize, when you fell in love with Firehouse, you had architectural expertise on your side but regardless you were talking a risk. I am sure, at the time, you felt like you were taking a risk but confident it was going to work out. And then all of sudden you just said, “Hey this isn’t so bad. We should try and own that building there “and plant our flag” so to speak.
Graham: Yes and we approached the owner. The building was in pretty bad shape. Once we started peel away some of the initial grime, we found out that the building was not structurally sound. The guy was behind on his mortgage. But I think this building both because structurally it wasn’t looking great and because it did not the best lender, who was out of state, if went to forclosure, they would have demolished it. So we went in there, and again when we think about the keys to that vibrancy we found folks that had the same sort yearning for urbanity and got an awesome indoor cycling studio with 31 bikes… It literally just packed from [5:30] AM until their last class at 7PM. A guy who is moving back from Chicago, who grow up in Cleveland, so another boomeranger opening up the neighborhood tavern, Jukebox and juice bar, get a juice from the first cold press juice to come into town. And Molly and Joseph have this awesome sandwich called the bravocado that again it is one of those that you put it on culinary checklist when you come or visit Cleveland. And then a great tea shop by another young couple. So you had all these different folks who I call the Poster People of the Cleveland Renaissance opening up their own small businesses taking giant risks.
We didn’t have the requirement that you have to have a balance sheet that will guarantee the lease that you are doing. We never would have been to sign with these folks. And now they are all doing kick ass. They are doing high quality stuff. And that allowed us to continue to grow our portfolio. We just finished up print shop which the 1865 historic conversation. And for us we are neighborhood developers. We are very grass root. So being able to take the Firehouse and bring it into a couple of retail tenants, half a dozen office tenants, to look at Striebinger Block,14 different tenants with a split of residential and retail.
The print shop has one ground floor tenant and 6 apartments. We are now starting to get into a different class and we are right now in the design approval process for 161 units. There are two buildings, actually. It is called Church and State because the historic names for West 29th in Hingetown were called State Street and then Church Avenue is the divide. 161 units, its 20,000 square of retail, and 10,000 square foot public space that we want to be in amenity not just for those 161 units and those retail tenants but for the whole neighborhood.
John Carney: That sounds like you have found a way to stay busy expanding around the Firehouse, so to speak. When you tell the story like that and you bring in the other young entrepreneurs who were taking risks with their ideas and their capital and joining you and so to speak, planting their flags do you see this trend happening around the United States? Have you met other people in the region that were pioneers and revitalizing an area? For people who don’t live in Cleveland but might get the opportunity to listen to the show and checkout Hingetown on the West Side, we will put links in the show notes so that you can find it. It really is, this a great story to go along with it. Can you talk a little bit more about the real estate side when you got the Firehouse. You have some tenants there. And then you have gone through a historic rehab foreclosure type building across the street and then it is a continued expansion build out of improving the neighborhood where you plan on staying with your colleagues. Do you see just more and more opportunity to build up around Hingetown?
Graham: Yeah, and we see it from traditional developers. What’s been great is we are working on these grass roots projects, if you will. You have got more seasoned developers. You are talking a collection of buildings, which is an amazing our story because they stayed in blocks through the great recession. And then you have got 6 story new construction that’s going up. That’s another 7 units. And then you have got a 4 story, 70 residential units going up. So all of the stuff is happening. That’s the density that will then continue to support in the small businesses that are going up. So, it is capturing that momentum.
And as we have looked across the United States to different things that give us inspiration, it is both the grass root and the grass top type of developers. So from Tim in an Oakland – which is one of the coolest retail experiences that my wife has visited to Wynnewood Walls and Panther Coffee. A lot of these examples of developments that really have soles and/or unique places where they have got their personality showing through. You are part of that because of the programmatic approach and you are not just the design and brick and motor, but it is designed in how are you programming industry? How you are making sure that you are being inclusive? How are you making sure that you are being robust in terms of community process? How are you responding to some of the feedback that you are getting? So yes there are passionate folks that are doing amazing projects that we really look at for examples of stuff that we should be doing.
We are seeing different pockets of the city of Cleveland. It is not just limited to outside of Cleveland. You look at what’s happening on St Clair Superior, and Glen Willow with this really cool art project, and Fred Bidwell or Bidwell doing the front project in collaboration with Cleveland Urban Design Collaborative. I think that there is a momentum of urbanity happening right now and people are really collaborative. And I think with that collaborative spirit will help keep the momentum going and will add positive density to our urban areas that we need. It is great for sustainability. And selfishly it is just a great place to live.
So, at the end of the day, my wife and I talk about we are partially selfish in everything that we are doing. We want the amenities around us that we want to be able to support. And we want the bar that we want to be able to go and see friends. And we want the public spaces that you bump into a neighborhood and strike up a conversation and hear about a cool story or movie that we should check out. So there is a livability that is very personal to us and that’s what we are really excited to try and continue to perpetuate.
John Carney: For people that want to be a real estate development, there can be both positive and negative connotations to the general public. Have you found a lot of openness and willingness to help from the city government because of the improvements you are going in and the tangible and the visual impact your developments are having, or do you find the same resistance that any developer may encounter proposing change in the new area?
Graham: I think it is two-fold. Sometimes you have a negative connotation because it is somebody from the outside. I think that there is an inability for people to develop in and around them. And in that instance, they are just your neighbor that’s trying to do something that’s improving the area around them. So, I think putting that name and not the label is a really key component especially with the community development side of it. And then as far as you navigate in the bureaucratic red tape, again it is a bit of a mix bag that you are trying to push, especially with a city like Cleveland that’s got a very dated zoning code. How do you create a project that’s going to raise a bar while making sure that you are doing to the community process? And yet because of certain elements like very rigorous block club approval even though they are an offical body, you sometime get frustrated. I can’t believe how many different hurdles we are trying to jump over to take what’s been a surface parking lot that sat vacant for probably 20 years with the exception of the 4 or 5 cars to park there for the print shop. Why is this so hard?
The other element of it is, as for a city like Cleveland, we are working to catch up to a lot of the urban development that’s been happening. So, one of the two buildings that we are putting on the side is an 11-story building. An 11-story building is not a huge deal when you zoom out and when your city is like Toronto or Portland or Chicago. And for a zip code that shares the same zip code as all of downtown, again that is not a huge deal. Yet people will get really fixed on that number.
And then the other component that I think from a frustration stand point goes back to the day of zoning code is this obsession and it is a very Robert Moses, like the obsession with the automobile. And the first question is “What about the parking?” Again, for a city like Cleveland that hasn’t seen the rapid urban development of some of our competing cities, you shouldn’t really be able, if you are within a mile from the downtown business core, to consistently pull up and have a parking space right in front of your home. And because for the last 3-4 decades, you haven’t had the dense population, they have taken that as a given. And so you need to try to re-tool some of these folks. God love them because they made it through the bad times and yet they see these good times that are coming as a threat to that ease of just pulling up right in front of your driveway or even if you don’t have a driveway right in front of your house.
So those are the balances that I think that anybody who is interested in getting into development should have a passion, needs to have a vision. But there is also give and take. And sometimes it gives really hard because you are not just giving up on certain elements but you are putting yourself out there in a very personal way if you are very passionate about the project that you are doing. And when someone is critiquing the project, they are critiquing you. You are going to take it personal. If you don’t, then maybe you are not personal and emotionally invested enough. But that is the kind of the difference, I would say, between a commercial developer or neighborhood developer. But if you are looking purely at the matrix, yeah you are not going to be as emotionally investment. But for us, when we are looking at all the different strands of the urban fabric, it is a give and take. And the point of a really great urban setting is being cognizant, not just of how many units or how many square feet but really the personality that you are trying to help cultivate.
John Carney: Again, I think it is a great story and you know the whole mission of this podcast is for someone to hear your story and say, “You know I had that idea. I want to transform this area of my city.” And it is inspirational because it wasn’t an overnight success, right? I mean it took a decade and I am assuming that your life’s work is improving this area and being on that neighborhood development side. So thank you for sharing that story about Hingetown.
We are kind of getting ready to wrap this up. We have a question that we would like to close this out with before we say goodbye and sign off. You talked a lot about your motivation and the drive and the passion behind your projects and that obviously keeps you going when you have obstacles and frustrations come up. But is there any one quote that keeps you motivated or is the passion to improve your surroundings for the community?
Graham: Well, there are two really. This is a great because we are in the Locker Room, the wonderful Nike slogan of “Just do it”. If you see something, you got to just do it if you really feel that passion and calling.
The other one is the great Edison quote that “An idea without action is a mere hallucination”. And so if you have got an idea, you have got to take action or you are just going to be stuck. An idea without action is a mere hallucination. So, “Just do it” is great Edison quote.
John Carney: Two great quotes to live by. Is there a favorite book that you keep handy as a reference whether it is business book or biography that you recommend our listeners pick up next time here on Amazon?
Graham: Well, if somebody hasn’t read it and they are doing urban development, you’ve got to order right now Jeff Speck’s “Walkable City”. We are big fans of Jeff Speck. He pulls from some of the greatest urbanists in history but he looks at the behavior of folks on a pedestrian level and on a bikeablity level. He also pulls a ton of great pieces of research from a real data side to what works from walkability and bikeability standpoints. So, Jeff Speck’s Walkable City.
John Carney: Let me ask you this: how often do you and your wife share a car or do you even own a car or need a car?
Graham: I don’t think we need a car. We have got a Prius because it is easy. And then we have got the Hingetown public works truck, which is a 1975 dodge pickup truck. So, we have got both the pickup truck and Prius. We have both ends of the spectrum.
John Carney: When do you think cars in urban environments, like you actually having the own one, addressing the neighbors that are concerned about parking are just going to go away?
Graham: I think it is starting to. When you look at cities like Buffalo they are doing away with the automobile ratio requirements in the zoning code. But I think that as we continue to see the shared economy with Uber or Lyft, you are going to find that it is even less expensive to just take a ride like than pay for a parking space or pay a lease on a car and maintenance. Our orbit is pretty small. And it will be a week that we will go by where we won’t touch our car or our truck. It’s been number of days since we have been in it. But I think that we are moving to that direction and I think that when you see the investment of these ride sharing companies are making in the driver less cars, you are going to have even more ability to just go on your iPhone to click where you are at and cars are going to pull up and to take you where you need if you can’t walk or bike there or take a bus or rap into there. So I think we are getting there. I think it is going to be quicker than we think. And I think that obsession with parking spaces will fall by the way side and it will be more efficient but also more sustainable for the planet.
John Carney: All right Graham, thank you for sharing your story today. And once again, I find it inspirational. I am sure our listeners will as well. Where can our audience find you to carry on the conversation online or on social media?
Graham: They can find Hingetown on either Instagram or Twitter or go to hingetown.com and then my name at Twitter or on Instagram. My name on either Instagram or Twitter I jump into some of these urban conversations online but those are the best spots to find me.
John Carney: Perfect. We will make sure that those are listed in the show notes. All right. There you have it folks. I truly hope that you picked up some actionable advice today from Mr. Graham Veysey. Make sure to check out the Real Estate Locker Room show on iTunes, Stitcher, or Google Play and hit that subscribe button to ensure that you miss out on the pro tips from our guest. The mission here is to help you elevate your real estate game.
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Remember to stay focused on your goals, have fun, and stay in the game. I am your host, John Carney, and until next week work hard, play hard, and profit hard. Thank you for taking the time to share your story with us in the Locker Room Graham.
Graham: Thanks for having me.