SHAKER HEIGHTS, Ohio -- The addition of Align Capital Partners to the Van Aken District will bring the original office building at the corner of Warrensville and Farnsleigh roads up to full occupancy.
This will be accomplished in part through an $80,000 Vision Fund incentive that City Council approved March 25 to assist with relocation and build-out costs on the remaining 4,500 square feet of space in the anchor “C2” building.
The private equity firm could move by the end of the year from its current location in Beachwood, where the staff of six, along with the two principal partners, had run out of space in the Lakepoint Office Park.
Immediate plans call for adding another staff member or two, with room in the Van Aken District to accommodate up to 14 employees, according to the office layout proposed in the 10-year lease with the developer, RMS Investment Corp.
Depending on how any proposed expansion pans out, Shaker Senior Economic Development Specialist Katharyne Starinsky and city consultants have devised a six-year installment package of incentives good for up to $80,000.
Although Align Capital Partners has been in business for less than three years, it has completed more than 90 transactions, representing more than $5 billion in enterprise value.
With another office in Dallas, two of the three principals are local: Chris Jones lives in Shaker and Steve Dyke is a Cleveland Heights resident.
Individual employee pay is in the $150,000 to $200,000 range, with Align projecting annual local income and net profit taxes between $60,000 and $113,000.
"If we assume a more conservative tax generation that does not include their planned growth, holding their payroll and net income profits steady at their 2018 values, they will produce $44,435," Starinsky noted.
Even that lower estimate could wind up paying off the equivalent of the city's Vision Fund incentive in two years.
"And if they knock it out of the park every year, that's more incentive (for Align)," Councilwoman Julianna Johnston Senturia said.
Councilman Sean Malone said the city Economic Development Department is “taking a good program and making it better.”
Starinsky told council that the Vision Fund has made 10 loans since 2011, totaling $362,000.
“The loans have stabilized office buildings in Shaker Heights and yielded over $650,000 through last year, representing a 2-to-1 return on the city’s funds,” Starinsky said.
There’s still about $190,000 left in the Vision Fund, and at the end of last year, about $2.6 million remained in the city’s Economic Development and Housing Fund, city officials said.
Mayor David Weiss said he also likes the installment "pay-as-you-go approach" with Align, as well as the fact that this completes the leasing of the office building with the last remaining 10 percent of space.
Although another anchor is still being sought, “this gives us a little more momentum on our end in moving forward with the next proposed office building in the district," Weiss said.
That site sits on the northwest corner of the Warrensville Center Road and Chagrin Boulevard intersection, in the area formerly occupied by Starbucks, Weiss said.