Can a Med Mart Save Cleveland?

Cleveland's almost 80-year-old convention center is barely alive, with an annual occupancy rate that hovers between 10 and 15 percent, according to Dennis Roche, president of the Convention & Visitors Bureau of Greater Cleveland.

"It's a great, old building, but it's not competitive," Roche said. "It has low ceilings, only three loading docks and too many columns. It's just not adequate."

Luckily, there is hope on the horizon: a joint plan proposed by the city and Merchandise Mart Properties Inc. for not only a new convention center, but also a medical mart nearby that would offer permanent showroom space for suppliers and exhibitions in the health care industry throughout the year.

For now, the plan hinges on a vote by the Cuyahoga County Board of Commissioners for a proposed quarter-percent sales tax increase — to 7.75 percent — that would raise $350 million to fund at least part of the project. Two public meetings will be held in July, and the board could make a decision by the end of the month, Roche said.

"The concept of these marts is not new, but a medical mart is," he added. "I think we have an unusual concentration of hospitals here, and the Cleveland Clinic. It's a really compelling concept."

The clinic was founded in 1921 and is consistently ranked near the top of U.S. News & World Report's annual "America's Best Hospitals" survey. Approximately 1,500 salaried physicians work at the Cleveland Clinic and its satellite facility in Florida. They represent more than 100 specialities and subspecialities.

MMPI Senior Vice President Mark Falanga said the company was approached by the Cleveland Clinic's CEO, Dr. Toby Cosgrove, more than a year ago about the idea of opening a medical mart, using MMPI's Merchandise Mart in Chicago as a model.

"The Cleveland Clinic specializes in a lot of heart care and a large range of medical services, and it was (Cosgrove's) vision to develop a mart. He though it would be a good complement to the clinic," Falanga said. "Since then, we've had a series of meetings with him, the city and the county. It's something we're very enthusiastic about, and we're looking forward to."

Falanga said a medical mart would be a realistic objective even if only 10 percent of the 500-plus health care-related tradeshows that are held annually in the United States came to Cleveland once a year. MMPI insisted the project include a new convention center, and the city agreed.

"As far as the (county) commissioners are concerned, the medical mart would bring us guaranteed business," Roche said. "We don't have 50 tradeshows a year right now."

Assuming authority from the county government is forthcoming, all Roche and Falanga need to do is decide where the mart and center would go and what entity (or entities) would own it.

Roche and Falanga said at least 500,000 million square feet would be needed for the medical mart somewhere near the proposed convention center. The Higbee building, which houses the CVB, is one possibility with 850,000 sq. ft. of open space available. Forest City Enterprises owns it.

Current convention center plans call for 300,000 sq. ft. of exhibit space and 200,000 sq. ft. of meeting space. That could end up along the river next to the Higbee in the Tower City Complex, Roche said.

But, Falanga said, "it's premature to talk about actual location. We are evaluating other possibilities (than the Higbee Building), and we're looking for the optimal location. We need temporary and permanent showroom space."

Both facilities' fates depend on approval of the tax proposal and, as Roche pointed out, "a sales tax increase is the second most unpopular tax next to property taxes. Nobody likes the idea of more taxes. We are hearing from bloggers and the public about an imposed tax rather than a voted tax."

Even though the public has the opportunity to speak out at the county board's hearings, he added, the board could still vote the tax through without the public's support.

"(The tax increase) is a small increment that will have a big impact," Roche said.

The convention center would be publicly owned, but ownership of the mart is up in the air, he added.

"The deal structure is not hammered out as of yet," Falanga said. "At this stage, we're figuring out the viability of the project; then the challenge is what we need to accomplish to be successful. The ownership structure, who's involved, will all flow from the optimum situation."

For a city with a bleak economic outlook, the medical mart could be just the medicine it needs.

"It could transform hospitality here. I will hope what happens in hospitality would then spill over to other sectors. Nobody claims it will cure all of our ills, but it's a fine start," Roche said.