August 9, 2024

Did the tenants present a plan to the Library Board that includes details such as funding and repairs and other specific actions to take care of the building?
No. At the Monday, August 5, Board Committee meeting, the tenants gave a 10-minute presentation to the board, but it included no specific steps, including no financial solutions or plans. It called for collaboration, but presented no details. We are hopeful we may receive more detailed plans soon.

Why hasn’t the Library sought grants and done other fundraising to support the PEACE Building and its tenants?
As a tax-supported government agency, the Library cannot seek grants or fundraise for the benefit of other organizations; it does not operate as a funder or a foundation. It can only write letters of support.

Additionally, over the last few years, the Library has been spending roughly $200,000 a year on basic maintenance and repairs for the building, an amount that the current payments from the tenants doesn’t cover. For example, in 2023, the tenants paid $149,267 in rent and operating costs, but the Library paid $191,290 on utilities, cleaning fees, and other expenses, creating a deficit of $42,000 (see report here). So far in 2024, the gap is already $16,000 and continues to grow. These deficits add up each year.

Why can’t the library give the tenants the PEACE Building? Didn’t the Library only pay $1 for the building?
Ownership of the PEACE property (the park, parking lot, and building) was transferred to Heights Libraries from the Cleveland Heights-University Heights School Board in 2018, for the symbolic price of $1. Ohio Revised Code allows government entities such as public schools, city governments, and public libraries to transfer real estate between them.

The building is legally a public asset, and ownership can only be transferred to another government entity.

Won’t the recent Cuyahoga County property assessments result in more tax money for the Library, that can then be used to support the PEACE Building?
No. The local taxes the Library collects do not go up with home values; they are frozen at the rate they were when the last Library levy passed, in 2014, 10 years ago.

Why can’t the $2.8 million in estimated repairs be postponed? Do they have to be all done at once?
Some repairs can be put off. Others, such as the roof and HVAC, cannot wait. Of the $2.8 million, approximately $1.8 million is for a new HVAC system. As of this writing, the HVAC system is failing. Of the 4 units, one is offline and no longer working, and has been replaced by the Library with a portable, temporary unit. It is only a matter of time before the other three units fail. Complicating the matter is the fact that replacement parts for these old units are no longer available, and new units have a delivery time of roughly 12 months.

Since the tenants cannot currently afford to pay the $1.8 million, it would be up to the Library to do so. But the Library budget needs to be spent on services, collections, and improvements to its 5 existing public buildings.

Why didn’t the Library have a plan in place when they took over the property (park, parking lot, and building)?
The Library did have a plan, which was spelled out in the original leases, and subsequent leases.

The Library inherited the original tenants, who were already in the former school building when ownership of the property was transferred from the CHUH Schools to the Library. The tenants were Artful, Lake Erie Ink, Reaching Heights, Future Heights, the CHUH Teacher’s Union, Ensemble Theater, Family Connections, and Sherri Skedel (a social worker).

The Library has had three separate lease agreements with the tenants. Below is a brief overview of major events and agreements from 2018-present:

1. The original 2-year leases (2018) gave tenants two years to create a single governing entity and create a financially feasible structure for taking over management of the building, including payment of all operating costs, and the creation of a reserve account to cover large repairs. This was to be achieved through various kinds of fundraising on the part of the tenants.The original leases were created with the understanding that, while the Library had prevented the building from being demolished, it was not in a position to pay for the building’s operation and upkeep; the Library owned the building, but would focus its efforts on the park, which was open to the general public, unlike the PEACE Building. The tenants would cover all costs for the PEACE building, and would pay the Library back for any large repairs that required the library to front funding.
2. In 2019, to help the tenants create a model for operating the building themselves and covering costs, the Library and tenants hired the nonprofit real estate company IFF to do a full assessment of the PEACE building, including recommendations for lease rates, estimates of future utility costs, building management, and necessary capital improvements such a HVAC and roof repair. The total costs totaled approximately $2 million. The tenants rejected the IFF assessment and recommendations.
3. In October 2020, the Library signed a one-year lease with the CPC (Coventry PEACE Campus) organization, who took over building management and held the master lease (tenants paid rent to CPC, who then paid the Library). This agreement required that the CPC cover maintenance, utilities, and other operating costs, and also act as real estate agent, and acquire new tenants. Renewal of CPC’s lease long-term was contingent on its ability to successfully manage the building, including demonstrating financial and organizational stability.
4. In December 2021, after careful deliberation, the Library Board deemed that CPC did not have the necessary financial and organizational stability necessary to operate the building, and decided the building required professional property management. CPC’s lease was therefore not renewed long-term, and converted to month-to-month. Several challenges with building management lead to the decision. After an RFQ process in early 2022, the Library hired Playhouse Square/Cresco management. The CPC did apply to manage the building, and was not chosen. Also at this time, the Library hired commercial real estate firm Allegro Real Estate Brokers and Advisors to complete a second assessment of the Coventry School property to help determine rent rates and the structure of any agreement with a property management company and future tenants. The Library commissioned this study at its own expense following the expiration of CPC’s lease term, as part of the Library’s efforts to develop a sustainable and financially responsible plan for the building.
5. New 18-month leases were signed with individual tenants in February 2023, and the new leases did not require fundraising, but instead called for regular rent increases to cover the building costs.
6. All tenants missed the April 1, 2024, deadline to renew their leases for another 18 months. The Library board decided not to renew, and instead extended the leases for 6 months, without a rent increase, at which time leases will convert to month-to-month. Either party (Library or tenants) can end the agreement with 60-days’ notice.

May 24, 2024, updated on June 7, 2024

On Monday, May 20, the Heights Libraries board voted not to renew the 18-month leases of nine PEACE Building tenants (Artful, Building Bridges, Cleveland Heights Teacher’s Union, Coventry PEACE Inc., Future Heights, Grace Communion, Lake Erie Ink, Reaching Heights, and Singer’s Club).

Here are answers to some questions that members of the CHUH community have asked the Library.

Why did the Library fund the expansion and renovation of their Noble Branch building but is unwilling to invest funds in the PEACE Building?
Heights Libraries receives its funding from state and local taxes, so the money it spends must go toward public services, which can include anything from materials, to classes, to spaces to sit in and work, study, or just be. Any member of the public, whether from our community or not, can enter a library building, no questions asked, for no reason other than they want to be there. No one needs to have an appointment or a purpose. Once there, that person can stay all day reading, relaxing, taking classes, using a public computer, taking their child to a storytime, or even, if they are under 18, getting a free snack in the children’s and teen areas after school. For example, the Noble branch serves an average of 138,000 people a year (not counting 2024, when it was closed most of the year for renovation).

The Library, however, is not a funder, nor a foundation, and the PEACE Building is not a public building, and offers few free services to the public.

People must buzz in to the PEACE building unless there is a specific event that is open to the public. Programs are not free to the public except in rare cases. For example, Artful does have some free events like the PEACE Pops, but it resells space to artists; it is not a free resource to artists. Other tenants are nonprofits that do not directly serve the public, like the CHUH Schools Teacher’s Union.

Did Heights Libraries change the deadline for the tenants to renew their leases?
No. The 18-month leases, which each tenant signed, clearly state that they must inform the Library of their intent to renew their leases AT LEAST 90 days before the lease expires on June 30, 2024; the expiration date is clearly spelled out in section 5 of each lease (copies of each lease can be found here):

Term. The term (the “Term”) of this Lease shall commence on January 1, 2023 (the “Start Date” or “Effective Date”) and end after a term of eighteen (18) months on June 30, 2024 (the “End Date”), unless otherwise extended as provided herein.

Section 6 of each lease states:

Option Term. Tenant shall have one (1) option to renew this Lease for a period of an additional eighteen (18) months (the “Option Term”) from the conclusion of the Term set forth in Section 5 of this Lease. Tenant may exercise its option to renew this Lease for the Option Term by providing Library with written notice of such exercise at least ninety (90) days prior to the End Date.

Additionally, each tenant received, via email and hand delivery, a letter reminding each tenant of the rent increase that would take place July 1, 2024 IF they renewed. (Copies of each letter can be found here.)

Does the Library have a buyer lined up for the PEACE building?
No. If the Library were to solicit offers from potential buyers, it would have to be a public process. The Library HAS received unsolicited offers, which it has turned down. In fact, at the May 20 board meeting, the Board of Trustees formally voted to reject unsolicited offers. The Library will follow the original deed for the property, which stipulated it be for public use.

Are the tenants being kicked out in December?
No. Per the resolution passed at the May 20 Board meeting, the Library is offering the tenants with expiring terms an additional 6-month term, from July 1, 2024 through December 31, 2024, renewing on a month-to-month basis thereafter until terminated by either party with 60 days’ notice.

Are the tenants’ payments covering the costs of the building?
No. Over the last few years, the Library has been spending roughly $200,000 a year on basic maintenance and repairs for the building, an amount that the current payments from the tenants doesn’t cover. For example, in 2023, the tenants paid $149,267 in rent and operating costs, but the Library paid $191,290 on utilities, cleaning fees, and other expenses, creating a deficit of $42,000 (see report here). So far in 2024, the gap is already $16,000 and continues to grow.

                                  1/23 to 12/23              1/24 to 3/24                     Total
Tenant payments        $148,267                     $38,125                       $186,392
Expenses                    $191,290                     $54,503                       $245,793
Difference                   (43,023)                       (16,378)                        (59,401)

The original leases in 2018 spelled out the tenants’ responsibility to cover the building’s costs in the form of rent, additional payments to cover operating costs, and fundraising efforts that would go in to a reserve account to cover repairs and maintenance. The leases also spelled out a requirement that the tenants had two years to create a single governing entity and create a financially feasible structure for taking over the building. The tenants were unable to do so, and since then the library has, to date, spent almost $500,000 on the building that has not been recouped.

What are the next steps for the property?
The decision about what to do with the Coventry PEACE Building has not been made and there are no inevitabilities. The board has asked staff to evaluate the financial stability of the building. Staff will also conduct an open, transparent and public process to consider options that are both within the mission of the library as well as in the best interest of the community. We are currently planning public meetings that will take place this summer, and will circulate a survey both online and in hard copy. We look forward to hearing from all of our stakeholders across the community.

Staff will be taking into consideration a March 2024 report by Cresco/Playhouse Square Management, the building’s current manager and real estate agent, that finds the former Coventry Elementary School building is in need of slightly over $2.8 million dollars’ worth of repairs. (A copy of the report can be found here.)

Also, on July 7, the Library will celebrate the ground breaking for the new PEACE Park, a public space, open to all, that will feature a new playground for all ages and abilities, an accessible walking path, a performance pavilion, outdoor seating, and over 100 trees. The sledding hill will remain, as will the open field in the middle of the park.