A quartet of childhood friends with roots on Cleveland's East Side is attempting to bring a different sort of real estate product, and perspective, to the city.
WRJ Developers LLC is planning a 64-unit apartment building made largely of shipping containers on East 72nd Street north of St. Clair Avenue, in a section of the St. Clair-Superior neighborhood that's home to a jumble of warehouses, manufacturing complexes and houses.
The new-minted developers, who have named their project ArkiTainer, will be the first to tell you that they're fighting an uphill battle.
Jermaine Brooks, Richard Singleton, Willie Levy and Jamion Berry each have dabbled in real estate for years. As a team, the 45-year-old men are taking on their first ground-up deal, an atypical form of construction in an overlooked location.
And they're doing that as an all-Black company in a predominantly white industry.
Khrys Shefton, director of real estate for the nonprofit Famicos Foundation, described the friends as driven, approachable and humble. Famicos, a neighborhood group that serves part of St. Clair-Superior, has been an adviser and cheerleader for WRJ.
"They know what they don't know," she said. "They're willing to bring in people that do know. They're open. They're honest. They're asking for help in all the right places. And what I think it exposes is the lack of infrastructure for developers who aren't rich and white."
Levy, Singleton and Brooks, the majority partners in WRJ, graduated from Warrensville Heights High School and went on to separate colleges and careers. Berry, a minority partner in the development venture, transferred to Gilmour Academy but stayed in touch with his former schoolmates over the years.
Now Brooks is a Realtor with Keller Williams Greater Metropolitan and a certification officer and outreach coordinator for Cleveland's Department of Port Control. He began buying homes in the late 1990s and amassed a portfolio of rental properties after the housing market bubble burst in 2006. He's since sold off all but a few of those homes.
Singleton, who lives in Solon, is a vice president of global supplier operations for PNC Financial Services Group. About a decade ago, he pulled money out of his 401(k) to buy and renovate a house for his mother. That purchase kicked off a string of single-family projects, investments in homes he acquired at sheriff's sales or through the Cuyahoga Land Bank.
Levy, who lives in Maryland, has a day job at Verizon but has been buying and rehabbing houses for about 20 years.
"This has been a long-term dream of mine, to be able to develop and build from the ground up," he said of moving into commercial real estate.
The trio formed WRJ — which stands for Willie, Richard and Jermaine — in July 2019. Berry, a Chicago-based management consultant with construction know-how, joined them.
They saw potential in opportunity zones, federally designated Census tracts where investors can defer or cut their tax liabilities by putting money into real estate or businesses. Created in 2017 as part of a tax reform package, the opportunity zone program was intended to drive capital into economically distressed areas. But critics say it's far from meeting that goal.
The WRJ team set up an opportunity fund late last year, in hopes of attracting investors to projects in long-struggling East Side neighborhoods. They've been promoting ArkiTainer on a website launched by Opportunity CLE, a collaboration among civic-minded nonprofit organizations and local governments.
So far, they haven't found any takers.
"Not a red cent," Brooks said.
The would-be developers turned to St. Clair-Superior after hitting roadblocks on a site in Hough. On East 72nd, they found overgrown lots, abandoned buildings — and one large, red shipping container. For the friends, already charmed by cargo architecture, it was a sign.
They purchased four lots and entered agreements to acquire four more from the city and the Cuyahoga Land Bank in deals that won't close until the project financing is in place.
"Our biggest issue is we go to a bank and they say, 'What experience do you have?' " Singleton said. "And we say, 'We don't have any, but we have a great project.' "
Charles Tucker, a Detroit-based financial consultant working with WRJ, said he's talking to lenders and exploring other funding sources for a project that he characterized as workforce housing, aimed at renters earning less than 80% of area median income. In Cleveland, that's $60,800 a year for a four-person household, according to the U.S. Department of Housing and Urban Development.
"I tell my potential clients that I've got to see a path for success before I sign up. And, needless to say, I signed up with this team because I could see a path for success," said Tucker, who primarily consults on affordable housing deals in Michigan. "But it's not an easy process."
The most recent plans for ArkiTainer show a four-story structure made of 160 stacked shipping containers, clad in metal panels and accented with faux wood.
The designs, which won an early approval from the Cleveland City Planning Commission last month, are a dramatic departure from the almost fluorescent, four-building version of the project that WRJ floated in the spring. A city design review committee shot down those plans, sending the developers back to the drawing board — and, ultimately, to a new architect.
Since July, the partners have been working with Three Squared Inc., a Detroit-based firm that has finished 13 container installations and has 17 more in the works. Those projects range from single-family homes to apartments and from retail incubators to creative office space.
ArkiTainer, if it moves forward, will be the company's largest residential undertaking, on a site that's less than a mile from Lake Erie, not far from Gordon Park and the now-cleared land where FirstEnergy's Lake Shore power plant stood for more than a century.
In that post-industrial landscape, Singleton said, "our goal is to be the first apartment complex in Ohio made out of containers."
An affordable housing development in Columbus was set to claim that title a few years ago. But that development deal fell apart before anyone moved into the building. The partially finished project, Cargominium, was razed a few months ago.
Three Squared provided 54 containers for Cargominium but didn't serve as architect on the project, said Leslie Horn, the company's founder and CEO. At ArkiTainer, the firm will play a much larger role, designing the structure, fixing up and installing containers and working with a general contractor to finish off the building.
With two cranes working, one at either end of the site, it could take six days to stack the containers on a prepared foundation, Horn said. The full construction process might last four to six months, said Breck Crandall, Three Squared's lead designer and project architect.
From a developer's standpoint, containers are appealing because — on larger projects, at least — they save time and reduce expenses like project management and fees. The 40-foot-long containers are cleaned off-site and arrive painted and modified, with openings for windows and doors. Weather delays are less of an issue than at a traditional construction site, Crandall said.
But, Horn said, "you still have to supply this building with cabinets, with insulation, with all your mechanical stuff."
ArkiTainer would hold 32 studio apartments, each made of two shipping containers, and 32 two-bedroom apartments, each made of three containers. Rents might range from $1,000 to $1,300 a month, the developers said, though those numbers could shift based on financing.
The details also might change if WRJ brings a partner on board — a prospect the friends are considering as they struggle to gain traction with lenders. They're talking to Famicos, which has a deep history in affordable housing development, about taking a formal position in the project.
Shefton said it's a shame that there aren't more avenues for aspiring developers to gain a foothold in Cleveland, particularly in minority communities.
"From my perspective, I feel like you shouldn't need Famicos to put their name on it," she said. "But we'll do whatever it takes in order to assist them. Now we may need to take a more active role in order ... to get the project financed."
The location is risky, yes, and the product is unorthodox. But she believes the area, where Famicos is trying to kick off a master planning process, has untapped potential.
So far, the ArkiTainer team isn't dissuaded by the challenges. They hope that East 72nd Street will be a proving ground — and the first of many development sites they'll tackle.
"We feel like the East Side is there for the taking," Singleton said. "We're still young at heart and young in spirit. … We've just got to get one in the dirt, and the rest will come."
Or as Brooks said, laughing: "This is our baby, sure. So we're going to see him graduate."
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Childhood friends aim to break new ground with shipping-container apartments on Cleveland's East Side - Crain's Cleveland Business
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