Thursday, October 5, 2017

Sources: BioEnterprise In Talks to Take Over Global Center for Health and Innovation

Posted By on Thu, Oct 5, 2017 at 10:28 AM

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An anonymous message arrived at Scene this week claiming that BioEnterprise, a non-profit Cleveland business accelerator, is in line to take over the Global Center for Health and Innovation. Two sources have since confirmed the news.

That the Global Center (nee Med Mart) could be poised for another pivot isn't entirely surprising. Part of the $465 million taxpayer-funded complex that also includes the convention center, the 235,000-square-foot Global Center has been nothing short of an abysmal failure in each of its three or so different incarnations in the short five years since it opened: The original plan for a healthcare mall showcasing high end medical wares was scrapped early on, replaced by a vision of attracting trade shows and conferences with a focus on education.

At least 20-percent of the building is vacant, according to reports, though Scene's been told the number is closer to 40 percent. So ineffective were efforts by SMG, the company that manages the facility, to secure new tenants that a consulting firm was enlisted to fill the void. They couldn't attract any new businesses either. The rapid turnover in leadership positions at the facility probably hasn't helped, though who would stick around when the most successful indications of progress are the arrival of a Starbucks, the expansion of an Au Bon Pain, plans to lure people for coffee or lunch in the empty atrium, and the transformation of vacant space into large conference rooms.

The majority of the leases for the few tenants that the Global Center does lay claim to expire in 2018, and there's little reason to believe any of them are keen on re-upping, which lends temporal credence to the rumor of a takeover by BioEnterprise. (The organization is a tenant itself and paid zero dollars for its space through its first lease term that ended in 2016.)



So what gives?

No one seems eager to talk about the talks on the record, though many reached by Scene acknowledged the rumblings.

Cuyahoga County spokesperson Mary Louise Madigan said she had no information to share.

A message to BioEnterprise's media relations department was returned initially by a call from Dix & Eaton, a Cleveland-based PR company. Later, a BioEnterprise spokesperson said, via email, "I understand that you are seeking comment for a story about strategic talks that BioEnterprise may be engaged in. BioEnterprise does not comment on rumors. As an organization, we have worked since 2002 to expand and support Northeast Ohio’s bioscience sector through our work with entrepreneurs, our support of The Medical Capital and other activities. We are proud of the progress that we and the entire region have made and are committed to even greater strides in the future."

SMG spokesperson Dave Johnson declined to comment. Jeffrey Applebaum, a Thompson Hine lawyer who's worked on and for the projects in various capacities, declined to comment. George Hillow, the executive director of the Cuyahoga County Convention Facilities Development Corp., a non-profit created by the county to oversee and work with SMG, didn't respond to a voicemail message. Multiple calls over two days to CCFDC's listed office number went unanswered.

The board members of the CCFDC, which was recently expanded, have full autonomous power to make the decision; it wouldn't be subject county approval. Their next meeting is on October 27; the issue is expected to be on the agenda, if not up for a vote.

An industry source told Scene the takeover is "a done deal" and would likely be formalized and announced soon. A second industry source, who's spoken to the SMG sales team in recent weeks, said it was relayed to them that the transfer is indeed happening and that up to half of the 235,000 square feet will be turned into meeting rooms. Prospective terms and details — financial, managerial, operations, etc. — remain unknown.

As for what the swap may look like, a source hypothesized that with BioEnterprise's incubator focus, it'd make sense to relocate them and the fledgling start-ups from the organization's current office in University Circle to the Global Center. Even if they were offered below-market rates on leases, at least the building would have the appearance of activity.

Whether that's a good or bad thing, an actual solution or window dressing on a failed project doomed to fail into perpetuity, will be a vital question. In the meantime, stop by the Au Bon Pain. We hear it's a lovely spot to get some peace and quiet and enjoy yet another day in Cuyahoga County where the taxpayers' business is conducted behind closed doors.

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