Melvin Lalich is a man at peace with his lot in life. A former mortgage broker, he’s made his living for years by flipping homes in and around Cleveland: buying low and selling high, and leaving his corner of the neighborhood a little better than he found it.
“You know that ball on the back of a toilet?” Lalich asks. “I don’t. I don’t know shit about anything, but I know real estate. I take the worst houses in the city and make them the best houses in the city.” It’s not just his opinion: His rehabs have garnered praise from Cleveland officials too.
So it was that Lalich joined his brother-in-law in buying the home they now own on Franklin Boulevard in Ohio City. It’s an ungainly, sprawling Victorian two doors down from the infamous Franklin Castle. Built in 1870, the home served for years as a boarding house for cleaned-up drunks, until its owner put it on the market in 2006.
After four years without a nibble, Lalich stepped in early this year with an offer of $26,000 — a fraction of what other homes in the former Millionaires’ Row sell for, but only a few thousand less than asking price. The place, after all, was a dump.
Before signing off, Lalich paid a visit to Cleveland’s building department, where he secured written confirmation that the home was zoned for commercial use. His plan was to plunge tens of thousands of dollars into sprucing up the old lady, then court a buyer with commercial aspirations. Given its chopped-up floor plan, it had no future as a family residence, he figured.
From winter through summer, contractors trampled throughout the house’s countless rooms and cubbyholes, mending trashed walls and ceilings, and replacing the heating and cooling, plumbing, and electrical systems — all in conformity with the commercial requirements set forth by the city. Today, it’s a move-in-ready dwelling that sleeps 11 comfortably, though not amid the grandeur one might expect from a 19th-century mansion.
By August, it seemed Lalich had lined up the perfect suitor: an East Side businessman with designs on opening a European-style youth hostel in Ohio City. The plan called for international travelers to drop their backpacks, rest up, and be wooed by Ohio City’s innumerable charms — from its bars and restaurants, to its enchanting West Side Market.
The idea wasn’t new to the neighborhood: For years, the Ohio City Near West Development Corporation has made known its zeal for bringing such a venue to town. “We’ve eyed a hostel as something the city of Cleveland needs, and we think Ohio City would be the perfect place for it,” says the group’s director, Eric Wobser.
But when Lalich’s potential buyer visited the building department to confirm the place was properly zoned, the city had reversed itself. Ronald O’Leary, the department’s assistant director, decreed that the home could be used only for residential purposes.
O’Leary, it appeared, had a personal stake in the verdict: His own home — an elegant Victorian on a large lot — sits two doors down from Lalich’s place.
When Lalich explained that the department had already approved the commercial use in writing, O’Leary deferred the ruling to a city lawyer and another official in the department. They sided with Lalich.
Not content with the outcome, O’Leary filed an appeal against his own department. He cited an arcane code claiming that the home’s zoning had reverted to residential because it was abandoned for more than two years. Never mind that the home, with its numerous architectural modifications over the years, likely hadn’t been a single-family residence since the Depression.
Lalich claims the house was simply on the market, not abandoned, and the previous seller says the same. Asked by Scene whether the code has been invoked with any other Cleveland home in recent memory, O’Leary says he does not know.
In mid-November, less than a week before O’Leary’s appeal was to be heard, Lalich’s buyer backed out, citing cold feet from the growing scrutiny over what he could do with the place.
Councilman Joe Cimperman says Lalich has done “an amazing job at a property that was in distress.” The problem, he says, stems not from Lalich’s plans, but from residents’ concerns about how neighboring houses are used.
The strip of Franklin includes many gorgeously restored homes, in addition to the star-crossed Franklin Castle and several large old houses, like Lalich’s, that have served for years as boarding houses. If one of them is allowed to circumvent the law, what will stop others from following? goes the logic of Cimperman and area residents, fearful that their recession-strafed houses will sink further in value.
Lalich counters that he’s not trying to circumvent any laws — he’s simply trying to follow through with plans the city had approved for him.
But more recent amendments by the building department have made that harder than ever: When the permit was issued against O’Leary’s wishes, a stipulation was added that the dwelling must be used as a hostel.
“That is the most limited zoning I have seen for a property in my entire life,” says Lalich. With his hostel-savvy suitor now out of the picture, Lalich worries he’s sitting on a house that has been customized at the behest of the city to appeal to no buyer on earth. As he puts it: “Now I can only sell the house to purple unicorns or leprechauns.”
Lalich paints O’Leary as a calculating meddler who fought his department’s own ruling solely for personal reasons.
O’Leary admits that his own stake in the outcome made it best for him to drop the appeal. But he’s happy to see that a group of neighbors has united to file a new appeal. Also onboard is Ohio City Near West, which would rather see a hostel take root in the city center.
“The fact that my wife and I were involved with this was becoming much more of a deal than whether this should become a hostel,” O’Leary says. “My neighbors and my wife and I don’t wish anyone any ill will. It’s just something we looked at that’s best for the neighborhood.”
For now, Lalich awaits word about the appeal against him. If he loses, he’ll mount an appeal of his own. To him, it’s all part of the City Hall shell game he’s grown to know all too well.
“I can’t think of a single thing I could have done to prevent this,” he says. “But this is going to drive me to bankruptcy.”
Send feedback to eburnett@clevescene.com.
This article appears in Dec 1-7, 2010.
Mr. Lalich, i am very sorry to hear of your downfalls dealing with Mr. O’lLeary; I have dealt with him in the past and it is undoubtedly clear he is not to business minded nor truly educated in issues dealing with this. He does not know who to turn too when the heat is on. I know a few individuals that are currently reviewing his employment background and to see on how such an individual was able to attain and hold such a position. If we believe on how he actually got his job you might be happy on what your outcome will be. Once we dig deep and we find out how one person “o’leary” with a terrible GPA fvrom Miami University, can actually put you in the poor house by political shoulder rubbing who hired him, you will have one hell of a law suit to file. It is noted that this guy couldn’t even get a job managing a small residential painting company.
A hostel would be a great addition to Ohio City. I have stayed in numerous hostels throughout Europe, and they were always well-run. A hostel is merely a budget hotel. I wish Mr. Lalich luck.
This is not the first time O’Leary (Dept. of B & H have switched oars in midstream. For years B & H, the Zoning Board and others have used the so called “archaic” code to setermine who is granted variances and who is not, however, recently, Mr. O’Leary provided a loop hole for Tremont Tree House owners to skirt the system and expand their seating capacity WITHOUT the requirement of additional parking.
We do owe thanks to the O’Learys though for setting an example on how to file an Appeal with BOZA for his change of interpretation which benefits one certain business owner while others have been forced to comply for the same code violation. Is this favortism and makes you wonder just whose calling the shots?
Also remember O’Leary was a leading member of the Housing Gustapo in Tremont.
It has been evident for some time that there are different rules for the meddlers when it hits close to home. The rest of us just have to suck it up.
Here is yet another example of the ciy waiting till the developer has asked in advance if he can do what he is planning and told no AFTER he has spent a large amount of money. The Cleveland Building department is mean spirited, self serving, unprofessional and dare I say Racist against whites. I was told I had to have a bathroom in my business seperate for women and men. But the exact same business owned by someone else was allowed to have one ‘coed” bathroom. That extra bathroom cost me $15,000!
I believe Mr. Jackson to be a fair and non biased man but how every mayor of this town lets the buidling department do whatever it wants is beyond me. Can you imagine the income the city loses (millions at least) because every contractor I know of has an attitude of “whatever you do, don’t go through the building department” Every fence, small addition, sun room, garage, that is built without a building permit is dangerous and cost the city money. Imagine if they were friendly, caring, easy to get along with and professional? I think most contractors want to get the proper permits but the way the building department acts now no one will go down there and deal with them.Who can afford to wait four months for approval to do an addition? Not to mention the bloviating official with a GED who hassles you about the footer, the concrete the bricks etc and has no idea what he is talking about to the sarcastic, sardonic, statues in room 306 and (is it 310?) seriously how do they get away with it year in and year out?
I think since this is on the street now thanks to the Scene and Erich Burnett maybe someone else who thinks operating and Ohio City Hostel is a cool idea will come forward to get this off the ground and run it!
The Department of Building and Housing has been making up their own rules for some years. Remember that they allowed 100 homeless women to live in a facility with only one shower and only five toilets from May to mid November. This is a complete violation of the housing codes, and we filed numerous complaints with the Department. Councilman Cimperman toured the facility and signed off on the move in May. If they can change the rules forcing homeless women to suffer all summer, they can change the rules to bar a hostile from Ohio City. The charge that this will decrease property values is crazy considering there is a shelter a couple of doors down the street and there is a number of drop in centers real close to the house. With all the vacant and abandoned buildings, how can anyone complain about a nice looking house being used in the neighborhood?
Clevelandhomeless
This is the very type of thing that just offends my sense of justice for the everyday, non-connected, non-corrupt, honest, ambitious citizen. Written zoning approval was given. How is any type of change after the fact even remotely relevant? City officials count on the fact that the average citizen doesn’t have the resources in time or money or connections to defend themselves. It’s wrong. This is why watch-dog journalism is ever prevalent and crucial in our city. I feel for this investor who at risk of losing everything at the whim of an overindulged, under-moral, city official. It’s just wrong.
Wow. Another city official breaking, or maybe more succinctly, creating rules to serve himself. It’s mind-boggling that this type of thing goes on. It’s like mice – if you see one, there are usually 10 more. If this story has made public news, how many times has this guy done this without anyone knowing? If he did this kind of thing in most jobs, he would be terminated. This is an outright abuse of power, and should not be tolerated.
And yes, I agree, a youth hostel is nice. However, it is a red herring. This is not about a youth hostel – it is about a guy trying to do the right thing, and playing by the rules set forth and agreed upon, and then having the rules change. Then, when the situation was addressed, it got even more whacked out, and now he has to sell to someone who only wants to open a hostel. I sounds like something out of Hollywood. Mayor, look at your people. Don’t you have meetings with them?? Don’t you correct them when they step out of line?
And O’Leary – I do understand that you don’t want another flop-house on your street. Who does? I get that. However, it is not your call. You can’t have it both ways, bro.
You can’t have it both ways, O’Leary. I get it. Nobody wants another flop-house of drunks, ex-drunks, junkies and recently-released convicts as their neighbors. I know, that’s insensitive to say, but it’s true. It is easy to support the building of a halfway house, as long as it is not next door to your swingset. I understand that. You have a fear of something unsavory on the horizon, and you want to be the neighborhood hero by blocking it. However, O’Leary, it’s not your call, bro! If we were all allowed to pick our new neighbors, our world would be a neverending landscape of gated communities, with anyone not getting through the stringent vetting process forced to live in a Mad Maxian wild west. You are not allowed to change the rules to suit you as the game goes on! We all know this! We learned it as little kids.
I’m confused. The owner wants to open a hostel. Zoning is saying it must be a hostel. That’s good for the owner, right? Or is the appeal that the residents are making expected to be successful, so that it can only be residential – so the owner is in limbo? If the appeal is not successful then the owner can have the hostel, right? But from the article it sounds like he doesn’t want that. What is it that the owner wants?
Cleary O’Leary has maneuvered and postured for selfish reasons. Perhaps O’Dreary would have been content to have yet another house sit vacant is the City…which is what he is accomplishing. I think part of the problem is the American image of a Hostel is not positive if any of us have been in Daytona for Spring Break and needed a place to rest our heads. But I have also traveled extensively in Europe and I looked for Hostels to be able to see more of Europe affordably and I think Cleveland could benefit from having a nicely refurbished place for visitors to stay. O’Dreary may put up a fight because it’s better for his neighborhood…but this is our city and Lalich is, and has been, rendering a great service to this city by cleaning up neighborhoods as he goes.
Amazing, but not surprising. St. Herman’s is also on Franklin a few doors down and all manner of truly distressed humanity lingers there without so much as a peep from the building department. Mind – I’m NOT complaining about St. Herman’s, merely noting its presence. Hostels tend to favor PROGRESSIVE travelers, looking to experience the DELIGHT of a new urban experience.
The ignorance (one who does not know) and NIMBY (not in my back yard) attitude of Cleveland has kept us years behind other urban environments and soldiers of backward motion such as Mr. O’Leary are a primary reason why.
This city has such a notorious – and current! – history of greased palms it’s truly amazing that ANYTHING progressive happens here without massive, truly massive dollar expenditures. Maybe if we can get our former County Commissioners involved something will move off Square Zero for Mr. Lalich at City Hall?
…Hey, Mr. O’Leary, didn’t your great grandmother’s cow help burn down Chicago awhile back? Maybe that cow’s descendant is available to help manicure your archaic and small-minded outlook?
Curious, the owner wants to be able to sell the house. That’s all. That’s why he bought and rehabbed it. He can’t sell it now because O’Leary and Co. are tying up the zoning and subsequently the Occupancy Permit in the Board of Zoning Appeals. Joe Cimperman needs to get involved and help this member of his ward.
Other cities have allowed hostels to open in long-settled neighborhoods without any problems in particular – if it were slated to become, say, a B&B, would residents of the area felt differently? Perhaps. Is the problem then that somebody is afraid having a hostel nearby will bring lots of strangers, probably young ones, into the neighborhood, inevitably leading to congestion and/or crime?? If that’s the problem, it is possible to designate a hostel as a No Partying kind of place, and besides, others besides youthful travelers have been known to avail themselves of a hostel’s convenience and economy. If somebody is going to the trouble to renovate/rehab a possibly historic Victorian property, why not give them the privilege of choosing what, within normal and accepted zoning usages, they choose to do with that property? It beats bringing in the wrecking ball – suddenly there’s an empty lot in your lovely old neighborhood – now That’s an eyesore.
Was Ronald O’Leary hired by Jimmy DiMora or Frank Russo? It seems as if he conducts his buisness with the same contempt and disregard for doing what’s best for the public good as those other two alleged “public servents”. Ed Fitzgerald should look into this guy.
I do not live in Ohio or know any of the players involved, but this story sure smacks of the self-serving, flagrant misuse of written laws and codes that Americans have come to expect from politicians at large. What a waste. Not only does the builder lose; so do potential consumers and every business/event that would have attracted them. This residential community is thinking what – that they won’t have to deal with hippie hitch-hikers now? How short-sighted, and how predictable that city planners were so easily manipulated.
The 3-headed monster @ B&H (Rybka, O’leary, Cooper) strikes again. They are
notorious for pulling this kind of shit. Former Councilman now director,
former prosecuter that was kicking the can when he lost election to become
judge, and gets a made up position making $100k+ (O’Leary), and a plan
examiner that sat in a cubical w/ no people skills is your deputy director
Cooper. That department is a total joke, a circus act
This outrages me. I’ve been interested in opening up a hostel in Cleveland for a couple years but got nowhere because I don’t really have any money to invest in it at the moment. However, I looked at the property in questions last year and it was a disaster. The fact that someone bought it and fixed it up is something that neighborhood should be celebrating. And a hostel would not detract from the neighborhood – it’s not a flop house with “drunks, junkies and convicts”. It’s basically a small budget hotel for primarily young, solo travelers. I don’t see how a hostel could be anything but an improvement over the boarding house the building was being used as before. It’s a shame the buyer pulled out. But hopefully he will rethink that decision and continue to fight this. I think there would be a lot of people behind him if he did. A hostel would be a great thing for Cleveland and the city should be working with people trying to start up new, innovative businesses instead of against them. We are trying to boost our economy after all, aren’t we?
Another example of how this city is out of touch. I just went through a similar experience with a architectural review board on a window job. A “Historic Neighborhood” will not be “Historic” any longer when the homeowners leave town and/or quit investing in their own homes because of the city’s out-of-touch demands to keep to a standard that long ago disappeared. The review board’s demands added an additional $6,000 to the project, which in turn caused the homeowner to do a quick about face.
In better times these sorts of decisions made sense. Today city homeowners are under-water, over taxed and not willing to make improvements with little hope of recouping their investments.
What a surprise, the common man’s dreams are squashed by pressure from fat cats. Maybe the “united neighbors” should buy it and Mr. Lalich can move on to a new less political project. Is this discrimination?
o’leary needs to be reminded that he lives in an inner city neighborhood. Ohio City is more than the fancy victorians. Move to the burbs, Oleary.
I bought a vacant distressed home in 2008 for my primary residence. Naturally, lots of permits were going to be required to resurrect the old beauty, but I wanted to contribute to improving the neighbourhood and the city of Cleveland in my own small way. One would think that the building department officials would be thrilled over it. Particularly, because the price of a perfectly liveable domicile would’ve been alot cheaper to buy. Instead, I have had incredibly negative experiences obtaining permits. BD employees have mastered the art of moving as slowly as is possible without actually falling asleep, it’s like the speed of thick ooze sliding across a horizontal surface. I had to put money in the 2 hr parking meter 3x during my 4th visit trying to obtain a permit for replacing steps and a porch as the original structure was literally falling off of the house. If the planner’s goal was to ensure I would get a ticket, and I’m sure it was, he succeeded. I did not get out of there until 5 minutes after the no parking hours began. Also, when I finally got to see him, he wore his sunglasses the whole time. Yep, non-prescription-cheap-ass-drugstore sunnies worn purely for the aim of intimidating me. He wanted to see architect’s drawings that would cost more than the damn porch. He wanted it constructed beyond code to, in his words, withstand a semi crashing into it. (because the chances of one crashing through the freeway wall and across 4 blocks up my driveway and into the porch are so high, of course). The picayune pettiness of his demands were mind-warping. All this agony because I dared to improve a derelict house in a dangerous area. Ha! Whatever gave me the idea I could get away with it! How about using your abusive power plays on the guy in Utah who owns the condemned house next door? I know he hasn’t been paying his taxes, getting any permits, or showing up for housing court.
I believe there is much information not being told with this article. The article does not mention how Mr. Lalich would not speak with Franklin block clubs. Does not mention Mr. Lalich not entertaining any ideas of protecting the property from turning into a boarding house, if the hostel does not make money. Does not mention Mr. Lalich not giving over any information of what work has been done to the property when there has been no permits taken out. The article does not mention that Mr. Lalich was selling the property for $150,000 and bought it at 26 grand.
I can see many of you having issues with the building department but I feel this situation has been written to show some sort of corruption with a city offical when its really just a group of neighbors wanting their neighborhood to be better. I live in Ohio City on Franklin Blvd. I see lines of homeless at St. Hermans. I see the unwanted people (druggies, hookers,homeless) walking thru the neighborhood between detroit and lorain. My home is a fortress because of breakins on my home and neighbors. I drive by the many foreclosed homes in Ohio City each day … but I stay because I believe its the best thing for Cleveland. I decided to make a stand and not take my business and residence away from this city. I believe my neighbors are the same as myself …. all we asked was to make sure the hostel did not turn into a boarding house. We had that situation years ago and it was nothing but trouble and pain in the community. We asked a fellow neighbor for help and now he is marked as corrupt.
just my two cents