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The Beachland's Waterloo

The club that saved North Collinwood can’t seem to save itself

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With a door linking This Way Out to the bands' green room, the place is perfectly located for touring musicians to pick up a cheesy polyester dress or a 1950s Julie London record while waiting their turn to play.

The Gulyases' dalliance with Collinwood soon led to more: The pair bought a building of their own and opened Blue Arrow Records and Blue Arrow vintage clothing, expanding on the offerings of This Way Out.

For a time, the Arts Collinwood collective catalyzed a mini scene that included four galleries. They have come and gone, much as art galleries do in any neighborhood. But replacement businesses on Waterloo are never slow to step into the fold.

When the Beachland first landed in North Collinwood, three out of every four Waterloo storefronts sat abandoned. Today, the figure stands at closer to one in four, with additional businesses sniffing around every day.

Recent additions include Native Cleveland, which sells hometown T-shirts and other items relating to Cleveland; the vintage toy store Star Pop; Rebel City Tattoos; the Head Shop; and the C9 boutique, which features the work of local clothing designers. Tucked in among the newcomers are a handful of the street's surviving old-school businesses, like the Boardwalk Bar and the R&D Sausage Co.

Informally dubbed the "Waterloo Arts District," the neighborhood was officially named the "Waterloo Entertainment District" at the behest of Barber and other business owners.

Even their remaining Old World neighbors are buying into the vision.

"When we came here, we met with the Slovenians, and they were not very friendly," says Gyorki. "Over the years, they got friendlier. Then one day, Councilman Polensek said, 'You will never believe what the Slovenians said: They're really happy to have this art stuff; you're turning the neighborhood around!' Collinwood's history is Eastern European, and they're tight. To get them to a place where they're comfortable is huge."

Now the Slovenian Workman's Home hosts an occasional show for the Beachland on nights when they've got something else booked, and it's headquarters for the Upstage Players, a community children's theater.

"It's been a very organic process," says Music Saves' Hershberger. "The people who have opened businesses here have done it for the same reasons we have — wanting to contribute to the growth of something new and have an impact on something happening."

These days, the resurgence in North Collinwood extends beyond the business district. Artists, musicians, and other newcomers are starting to make homes in the area, buying up cheap old houses on surrounding streets and rehabbing them.

Ken Janssen, who was hired by Barber in 2007 when an injury cost him his job waiting tables, became the booker of the Beachland's shows. But a higher calling led him to move on last month.

"I could do more for the neighborhood as a realtor than a talent booker," he says. Now he's courting new residents for North Collinwood's remaining empty homes.

Other signs of life are sprouting up everywhere. Back in 2007, Northeast Shores, the neighborhood's development group, sought a modest sum from the city for a basic street spruce-up. Instead the city picked the area for a major renovation — with an award of $4.6 million. The project is now in its community input and design phase, with work slated to begin by 2013.

"When Cindy started the Beachland, her entire traffic drove there," says Brian Friedman, executive director of Northeast Shores. "It wasn't foot traffic. Slowly, we're building an artist and artist-friendly population. Eleven years ago, Cindy talked about there being a residential component. At the time, that was an unreasonable request of a home buyer. Why would I buy a house so I could walk home after a concert?"

In late July, the nonprofit arts incubator Community Partnership for Arts and Culture (CPAC) announced that Waterloo was chosen over 12 other Cleveland neighborhoods to receive a $500,000 grant to encourage artists to buy homes in the area.

"The neighborhood will be a test lab for how we provide artists with affordable space and offer them a chance to contribute to the growth of a neighborhood," says CPAC spokesman Seth Beattie, who coordinated the grant.

"Our hope is when you do a few projects in a small area, it will empower people to play a bigger role in turning around their neighborhood. This sort of work is already happening there. We want to provide the resources to make it happen on a deeper level."

Meanwhile, the concert club that started it all has yet to find its own prosperity mode.

The Beachland's fiery relationship with House of Blues cooled a few years back when a new corporate parent there instituted more conservative booking policies aimed more at making money than making a splash. But the Beachland still totes debt from its fallow years — debt that Leddy wistfully says they hope to retire eventually.

But for now they're busy dousing the flames of a new crisis. In recent years, the city of Cleveland overhauled its longstanding admissions tax on event tickets; in 2009 it passed legislation to step up enforcement of the 8 percent tax.

Barber says the Beachland started feeling pressure from the city in early 2010. It's been told it's on the hook for about $400,000 in back taxes and penalties for the past three years (as far back as the tax can be collected). The club met with the city last week, but has yet to learn how to proceed.

City spokeswoman Andrea Taylor declined to comment specifically on the Beachland's situation. "The city is committed to protecting the public and administering tax ordinances in a fair and equitable manner," she said in a statement.

"The city will ensure that all responsible businesses, large and small, meet their obligation to collect and remit the appropriate tax due."

To Barber and Leddy, the tax unfairly penalizes Cleveland-based businesses — and gouges them where they're already taking a hit.

"We don't make money on the door," says Leddy, adding that any payoff comes from sales of booze. "They are taxing a portion of your business that is a loss to begin with. That's a big, dark cloud hanging over the Beachland. Every time the city comes after us, Cindy's colitis kicks up."

Scott Fine is a professor of banking and finance at Case Western Reserve's Weatherhead School of Management. He's also a big music fan who has brainstormed with Barber and Leddy about how to make better sense of their finances. He says they've done some preliminary exploration of converting the club to a not-for-profit entity, which could clear the way to have their tax debt forgiven.

Fine thinks they should lay their cards on the table and play hardball with the city: let them know what's at stake — not just for the club, but for the Waterloo neighborhood it built.

"Hire someone or have a friend go in and tell the city you can forgive this debt or forgive most or it, or here are the keys to the building," he says. "And then the city can explain to the press and the public why the Beachland went under and why the whole neighborhood went under.

"Because if the Beachland goes under, what happens to the rest of the block?"

Another reasonable question: What would happen to Barber and Leddy?

"Much of why we're open has nothing to do with making money," Leddy says. Though their romance has cooled, he and Barber continue to spend most of their waking hours at the Beachland, basking in the music and neighborhood they love.

"I guess it comes down to we're too stubborn to close. We talked other businesses into putting their lives and savings on the line.

"On paper we're bankrupt," he says. "But we feel the city needs us."

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