Posted on May 2, 2016
By Michelle Jarboe, cleveland.com
The city of Cleveland could sell roughly 10 acres of waterfront land to a 116-year-old maritime business, for a shipyard expansion a decade in the making.
The Great Lakes Towing Co. operates a fleet of tugboats and oversees the Great Lakes Shipyard, which runs along an old shipping channel that juts west near the mouth of the Cuyahoga River. Through land deals with the city, that shipyard could more than double its footprint, turning overgrown, long-contaminated property into a year-round boat-building site.
Founded in July 1899, Great Lakes charted a course that speaks to Cleveland’s onetime affluence, its industrial growth, its protracted struggles – and its recent attempts at reinvention.
The company’s roster of founding shareholders includes industrialist John D. Rockefeller; Jeptha Wade, a telegraph pioneer who helped establish Lake View Cemetery and donated land to the city for Wade Park; and members of the Hanna, Mather and Steinbrenner families.
Great Lakes Towing went gangbusters for decades but flagged in the 1960s, as the steel business declined and Cleveland’s economy softened. For more than 80 years, the shipyard – first on Jefferson Road in the Flats and, since the 1950s, on Division Avenue near the waterfront – focused on repairs and maintenance of the company’s own tugboats, which traverse the Great Lakes to provide towing services, cargo hauling, ice-breaking and emergency assistance.
In the early 1980s, Great Lakes expanded into repair work for other people’s boats. The company’s welders and other employees now fix at least 30 vessels each year, from ferries to freighters. The towing operation serves more than 40 ports stretching from Duluth, Minnesota, to Buffalo, New York.
A decade ago, the shipyard got into the fabrication business.
Workers there produce 1.5 boats per year. Company president Joe Starck hopes that annual tally will increase to 5.5 boats after the land acquisitions from the city and a $10 million expansion project.
“We decided that we would take this old tugboat company and invest,” said Ronald Rasmus, the towing company’s chairman and one of two primary owners of the Great Lakes Group, Inc. family of businesses. The majority shareholder is Sheldon Guren, an attorney and real estate investor who now lives in Florida.
Expansion efforts started 10 years ago
The proposed land deals with Cleveland would cap off a run of investments that started in 2006, when Great Lakes left its longtime corporate offices at Terminal Tower and moved to a new headquarters complex at the shipyard.
In 2011, the company acquired a massive lift – the third-largest such contraption in the world – that pulls boats out of the water in a sling, of sorts, and trundles them across the shipyard to be set on blocks. The lift, made in Wisconsin and sent here in 25 truckloads, can tote boats weighing up to 770 tons. Great Lakes had to reinforce the ground beneath it to support the lift’s weight.
With more land, the shipyard can prop up more boats, adding to its capacity for repairs and construction. Great Lakes plans to build a manufacturing facility large enough to accommodate its lift, to shield ships from rough winter weather and make the shipyard’s work – and its workforce – less subject to seasonal shrinkage.
This week, the towing operation and shipyard had about 70 workers on site, plus 35 to 40 out on tugboats or in other locations. At its busiest times, the business might have 120 workers in Cleveland.
Starck and Rasmus want to provide steadier employment for their welders, who are in high demand and who can be hard to track down or rehire if there’s a gap between jobs.
Those welders repair marine research vessels, work on government and U.S. Coast Guard ships and build boats for clients as far away as Honduras and Guatemala. Over the next few years, the towing operation itself will become a bigger shipyard client, since the company plans to gradually phase out its older tugboats and replace them with newly built models. Some of the Great Lakes tugboats have hulls that date to the 1930s.
“Replacing our own fleet would be an excellent way to keep workers between projects,” Rasmus said, adding “we could not do that without more land.”
Potential shipyard site has a checkered past
The land Great Lakes wants to buy sits at West 53rd Street and Crescent Avenue, west of the shipyard and the city’s red-roofed Garrett A. Morgan Water Treatment Plant. The towing company would pay a market price for the real estate, and the money would flow into the city’sindustrial and commercial land bank, which puts together sites for clean-up and development.
The most recent appraisal, which is several years old, placed the value of the land near $35,000 an acre. So Great Lakes might be looking at a $350,000 acquisition, though a firm price hasn’t been established. The Northeast Ohio Regional Sewer District needs to buy a slice of land at the westernmost end of the site for a pump station tied to a tunnel project that will start in 2018.
If Cleveland City Council signs off on legislation introduced this month, Great Lakes could buy roughly half of the site this year, making way for its new building – the first phase of expansion.
Another piece of property, near the western end of the old river channel, is contaminated and needs to be cleaned up before a sale.
Land along the south side of the old shipping channel once was labeled as a polluted, high-priority site by the Environmental Protection Agency. Old city maps show a ship-building operation of some sort, including the once-dominant American Ship Building Co., on the property for more than a century.
In the 1960s, The Plain Dealer bought 15 acres there as the potential site for a new building, which the newspaper never constructed. In 1980, afire broke out in a building where a tenant was keeping paints and solvents. The EPA and the Coast Guard cleaned up the site and later recouped most of the cost from The Plain Dealer and other companies.
The Cleveland-Cuyahoga County Port Authority acquired the property in 1998 and gradually sold off land to the city and Great Lakes, which was renting its aging shipyard. The towing company considered leaving Ohio for Illinois or Indiana but opted, after discussions with the port, the city and Cuyahoga County, to stay and build its current complex.
The Great Lakes Shipyard site isn’t an environmental problem. Neither is one piece of city land, controlled by the water department and set back from the channel. And the Ohio EPA is reviewing documents about the history and clean-up work performed on a second piece of city property, just southwest of the shipyard.
The lingering challenge is the western portion of the site, which includes a long boat slip where dirt laced with an industrial legacy swirls into the Cuyahoga River. Contaminated sediments at the far end of the old channel cause tumors in fish.
The city and the port authority hope to use money from the EPA’s Great Lakes Legacy Act to drain that slip, fill it with clean dirt and cut the land off from the channel using bulkheads. That project is being designed and priced out.
“It’s a way to get more property to the shipyard and also cure a lingering environmental problem,” said Jim White, the port’s director of sustainable infrastructure programs. “The city doesn’t want to own a piece of property that has no economic value. And by getting it cleaned up, they can get it into the hands of a taxpayer and employer.”
David Ebersole, the city’s assistant director of economic development, hopes the property clean-up will be done next year, making a land sale to Great Lakes possible before 2018.
“This is a critical property for the growth of their company,” Ebersole said of Great Lakes, which has been talking to the city for years. “If they cannot expand onto this property, it’s a severe crimp on their growth.”
The city predicts that the shipyard expansion could yield 10 new jobs and $500,000 in new payroll. Great Lakes works with Max S. Hayes High School, part of the Cleveland public school system, and Cuyahoga Community College to train and hire welders and mechanics.
At a recent Cleveland City Planning Commission meeting, Rasmus said that at least half of every dollar of revenue that Great Lakes brings in flows out to suppliers and vendors in Ohio, including companies located in Cleveland.
“We always look at jobs,” he told the commission. “Job creation, it’s a big thing for us. We know that that’s a big problem in our city.”
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