By Joshua Benton
Blade Staff Writer
Toledo will close a deal today that will clear the way for a new mall in Maumee – but still with only oral assurances that it will be “upscale,” as city leaders have demanded.
The city has agreed to sell 430 acres its owns north of U.S. 24 and west of I-475 for $6.51 million to Bryan-based developer Isaacs Group Holdings, Inc., fulfilling an option the Isaacs have had on the land since 1995. The Isaacs will then sell 130 acres of that land to General Growth Properties, Inc., the nation’s second largest mall developer.
A letter sent to Mayor Carty Finkbeiner yesterday by John Bergstrom, vice president of General Growth, states the project will include “three major retailers that are new to the market, including two department stores.”
But there are no written assurances that the mall will feature even a single “upscale” store.
Mr. Finkbeiner said he has been told by General Growth that the two new anchors will likely be upscale, but he said the city has no legal way to guarantee that.
“But they want favorable publicity,” the mayor said. “If they don’t get those anchors, then we’ll be publicly chastising them.”
He said that, since the city still owns about 400 acres near the site, Toledo could control the mall’s neighbors if General Growth fails to provide what the city wants.
“I don’t think they want smoke-belching factories right next to their mall,” Mr. Finkbeiner said.
The mayor and General Growth have both said that the mall – which will be about the size of Franklin Park Mall – will likely feature a “blend” of upscale and middle-income stores. Mr. Finkbeiner said the mall will “in all probability” include J.C. Penney, Sears, or both, in addition to more upper-crust fare.
“I did want a store that will appeal to all of the economic classes of our city,” he said.
But he argued that Toledoans should be given the chance to show they can support the upscale stores they now travel to Detroit to visit.
Earlier this week, Mr. Bergstrom said General Growth had received interest from six or seven potential anchor stores.
Three of those, he said, were included on the list of “upscale” stores Mr. Finkbeiner said he would find acceptable. That list included stores like Lord & Taylor, Nordstrom, and Saks Fifth Avenue.
City officials consider the deal a victory, since the city had only a very weak legal argument that it should have a hand in the planning of the mall. The 1995 option the Isaacs held on the land was picked up before the Dec. 31 deadline and, in a court fight, the city likely would have had to hand over the land without any say in its future.
Plans for the mall, and the decision on which stores will anchor it, are months away. But General Growth officials have said they are examining an entertainment component to the new facility, including an ice skating rink.
Of the three promised new stores, two will be department stores. The third will be a specialty store, the mayor said, and may or may not be large enough to count as a true anchor.
Part of the agreement to be signed today is a guarantee that the city will be reimbursed for any Toledo stores that move to the new mall. If, for example, the Maumee mall featured a Sears and caused the Sears at Westgate to close, the city would be reimbursed by General Growth for all tax earnings lost over a five-year period.
The J.C. Penney store at Southland Shopping Center closed last May because of declining sales. If a J.C. Penney opened in the Maumee mall, “there would be discussions” about bringing suit against General Growth to be reimbursed for that store’s lost tax revenue.
The mayor said this was the largest return the city has yet received on its massive investment in Monclova Township land in 1987. The city spent $14.35 million on nearly 1,200 acres in hopes that the land could be annexed to Toledo and provide space for industrial development.
Instead, the annexation effort failed, and the land became part of Maumee. The two cities have a joint economic development zone agreement that gives the city about 40 per cent of tax revenue from the mall, Mr. Finkbeiner said.
“It’s time we got some money back from that investment,” the mayor said.
Some parts of the land have been sold since 1987 for small-scale industrial development.
The $6.51 million, which will be sent by wire transfer today, is already included in the mayor’s proposed 1998 budget. There, it is included in the city’s capital improvement budget, where the mayor wants to use it for infrastructure improvements in Toledo industrial parks.
The mall would create 2,000 permanent jobs and 1,000 temporary construction jobs, Barry Broome, Toledo’s economic development commissioner, said.