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$2.00/APRIL 28 - MAY 4, 2014
Osborne empire will dwindle soon Developer has more than 200 of his properties headed to auction By MICHELLE PARK LAZETTE mpark@crain.com
JANET CENTURY
Larchmere Road, which is near Shaker Square, is in the midst of a $2.4 million makeover.
BONDED BLOCKS Larchmere Road merchants band together to better survive months of streetscaping By JAY MILLER jmiller@crain.com
L 17
archmere Road on Cleveland’s East Side is getting a $2.4 million facelift this year. That’s the good news and the bad
news for businesses on Larchmere. For shopkeepers along aging thoroughfares like Larchmere, which is near Shaker Square, the prospect of fresh pavement and sidewalks — and maybe fresh landscaping and decorative benches — is helpful because it can attract new customers
and generally make the street a more inviting place to spend money. But first, the business owners must endure months — in the case of Larchmere, from May until October — of orange barrels, parking bans, treacherous temporary sidewalks and sometimes even blocked entrances. All of that can reduce customer flow and sales so severely that it can sink a struggling restaurant or other fragile businesses. See BLOCKS Page 6
Most of the real estate empire that developer Richard M. Osborne says he has spent 50 years amassing soon won’t be his if it’s snapped up in auctions he has agreed to in order to pay off a bank and resolve the bankruptcies of three of his companies. Between two planned auctions, more than 200 of Osborne’s properties — much of it in Lake County — will be for sale as part of a proposed agreement to settle debts that he and his entities owe to RBS Citizens. Seventeen properties valued at more than $11 million are to be auctioned this Wednesday, April 30, at the Crowne Plaza Hotel in Independence. They include a 453-space parking garage near the new Cleveland Convention Center, roughly 120 agricultural acres in Chardon and several commercial properties. It is the largest dollar-volume commercial real estate auction scheduled for Northeast Ohio that Hanna Chartwell executives can recall. “Not a lot of people own as much property as Mr. Osborne does, so that makes it unique,” said Mac Biggar, president of Hanna Chartwell, the commercial brokerage arm of Howard Hanna that conducts auctions. “There will be some bargains to be had,” Biggar said, noting that Osborne’s vacant properties are available for “greatly reduced prices.” The second auction, which will take place on May 31, will put on
the block some 220 industrial, commercial and residential parcels Osborne owns, according to Biggar and Osborne. Auction proceeds will be used first to extinguish any liens on the properties, then to pay RBS Citizens, a creditor of three of Osborne’s companies that filed bankruptcy two years ago. If the properties sell, Osborne estimates he’ll be left with 20 or 30 properties. “I have a lender that I have to pay off (and) that’s probably the best way to do it,” he said.
$906,000 Total appraised value of 11 Osborne family properties Crain’s has identified as headed to a May sheriff sale in Lake County. For more details, see Page 8. The impending auctions are included in a proposed settlement agreement filed in U.S. Bankruptcy Court in the Western District of Pennsylvania in the bankruptcy cases of Oz Gas Ltd., Great Plains Exploration LLC and John D. Oil & Gas Co. The companies filed for Chapter 11 bankruptcy protection in January 2012, stating their financial difficulties were a direct result of the drop in the price of natural gas. RBS Citizens, which had lent the companies approximately $30 million, required that the loans be less than 65% of the companies’ reserves, and as a result of the decline in natural gas prices, that requirement was not met, according to court records. See OSBORNE Page 8
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Entire contents © 2014 by Crain Communications Inc. Vol. 35, No. 17