Opponents of Mall Entertainment District Plan to Keep Fighting
YOUNGSTOWN, Ohio — Those opposing the tax incentives requested by Washington Prime Group to create a community entertainment district at the Southern Park Mall look to make their case to the Mahoning County Commissioners, who will vote on the proposed tax abatement.
The proposed community reinvestment area agreement approved by the board of education for Boardman Local Schools at its regular meeting Dec. 16 will be put up to vote by county commissioners, who return Jan. 13. There is no date yet on when the vote will take place, but attorney Carl Rafoth says the opposition group “intends to have a presence at any future commissioners hearing or meeting.”
Rafoth and about a dozen other Boardman residents formed the opposition after the school board had its vote, he says. Since then, the group spoke at a township trustees meeting Dec. 30, where trustees voted unanimously to approve Washington Prime’s application to establish a community entertainment district, which allows the addition of five liquor permits through the state for the project.
If passed by county commissioners, the community reinvestment area agreement, or CRA, would provide a 15-year abatement on 100% of property taxes for the development, according to the CRA document. The CRA is part of a larger incentives package sought by Washington Prime that would reimburse the company $6 million of the estimated $30 million project cost.
“Central to the opposition is the fact that Washington Prime wants tax relief that we view at the expense of the Boardman property owners,” says Rafoth, who has owned and developed property in the township for 50 years. The group feels Washington Prime is seeking an “unfair advantage” by asking to forego “a significant portion of tax,” Rafoth says.
Another point of contention is using 2010 census reports, the most recent, that show Boardman with a population of more than 40,000, he notes. Other data indicate Boardman’s population has dipped below the 40,000 needed to establish the CRA, “which would automatically make Washington Prime’s entertainment district ineligible for the help that they’re looking for,” he says.
“I believe that one of the compelling reasons that Washington Prime wants to push this is because they don’t want to see the numbers from the 2020 census,” Rafoth adds.
Rafoth admits he hasn’t reviewed the Ohio Revised Code and says that if everything is permitted by statute, he will accept that, but says “it still seems unfair to the Boardman taxpayers.”
Jeff Barone disagrees. In fact, says the president of the Boardman school board, to not support the investment from Washington Prime group would end up costing taxpayers more money.
When Sears closed and the space was torn down, the property valuation for the Southern Park Mall dropped to approximately $39 million from $46 million, Barone says. Because tax levies are a fixed dollar amount, township business owners and residents had to pay more in taxes, he says.
“It’s a very fluid situation with our property valuations,” Barone says.
The $30 million investment from Washington Prime would upgrade the mall that “needs some life blown into it” and help keep it from going under, he says.
“You take that deal all day long,” Barone says. “If you don’t take the deal, in another five years, that $39 million property valuation is going to do nothing but go down.”
During a community meeting Dec. 13, Washington Prime outlined some of its intentions for the project, including interior upgrades to lighting, flooring, restrooms and the food court. Exterior amenities include an ice-skating rink, as well as a hike & bike bath potentially connecting the property to Boardman Park.
The future of the mall also ties into the property value of the Boardman Center Intermediate School across the street, which has been there for more than 100 years, he notes. Should the district try to sell it or replace it, “We’d surely want to do it when the property value is up, not down.”
The school board voted to close the school in January 2019.
Investing now to help increase the mall’s property valuation helps the community and gives it a chance to save the mall while benefiting the residents and the students, he says. “If it goes out of business, I don’t want an Amazon distribution center sitting at the corner of [U.S. Route] 224 and Market Street,” he says.
The mall has been a “centerpoint” for Boardman since it was built, and the sales tax generated by its tenants has benefitted the county, says Mahoning County Commissioner Carol Rimedio-Righetti. While she acknowledges Washington Prime hasn’t shown the residents “a full picture of the area” – another point of concern among those opposed, as well as Anthony Cafaro Jr., co-president of Cafaro Co., which owns the former Dillard’s space on the property – Rimedio-Righetti says the intention to create an entertainment area is something that the county can leverage to attract younger residents and their families.
“We have to move forward with the times,” she says. “In order to bring more people back to the area, we have to have something to show them.”
The proposed upgrades would update the mall while providing more jobs for residents, particularly part-time jobs for students, she says. It would also attract more residents to move to the area who work in Pittsburgh and Cleveland but live in Mahoning County because of the amenities it offers, she says.
“This area is moving, and we need to move with them,” she says.
The positive impact of upgrading a mall to include community space is something Kevin Malecek has seen first-hand. The director of economic development and international trade for the city of Mentor says Great Lakes Mall there underwent a “major renovation” in 2011, resulting in better visibility, natural light and aesthetic feel, he says.
In May 2014, ownership of the mall was transferred to Washington Prime Group from Simon Property Group.
From the Lake County level, Great Lakes Mall is the “largest sales tax contributor,” Malecek says. For Mentor, the income tax generated is “a very generous provider of our income tax base,” creating a symbiotic relationship between retail and the area, he says.
“It’s been a critical part of our economy and Lake County’s economy,” he says. “Washington Prime Group has been very forward thinking in realizing these spaces need to be retail-oriented and experiential-oriented. We’ve really seen an evolution.”
While the mall has been “relatively healthy” compared to other areas that have seen their malls lose business or close altogether, it was still affected by the downturn in the retail industry, he says. However, with the addition of the Round One Entertainment Inc. entertainment venue in 2018 and last year’s opening of The Yard, a community gathering place, Washington Prime has made “healthy strides” toward innovating and increasing foot traffic at the mall, he says.
“Over the holidays, the parking lots were as packed as ever,” he says.
It’s also spurring further development, as more restaurants are looking to locate to the mall, including potentially the fourth location of The Brew Kettle. The Strongsville-based brewery also has locations in Hudson and Amherst.
Attracting that type of continued development was one of the reasons Boardman trustees supported the community entertainment district agreement.
“Having some of these incentives in place would help them attract a better class of tenant,” Boardman trustee Tom Costello said during the Dec. 30 meeting. “Without these incentives, they might not be able to attract some of the bigger names.”
It will also attract increased commercial traffic from outside of the area, commissioner Rimedio-Righetti adds. It’s common for residents of neighboring counties and western Pennsylvania to come to the Southern Park Mall to shop, she says.
“Anything that’s going to generate revenue, I think we have to look at it in a positive way,” she says.
That said, those opposed are concerned with the increased burden on police and fire responders, which Rafoth expects will “significantly increase by this entertainment district” without the added tax revenue to support safety forces due to the CRA, he says.
“They need the tax revenue to meet the standard of care that they’ve always provided,” he says.
In addition to the abatement, the company seeks creation of a joint economic development district that would impose a 2% income tax on any new jobs created in the space.
“It just does not seem to be the proper, appropriate thing to do,” Rafoth says.
The income tax is one Cafaro’s primary concerns, the developer says, because no details have been discussed on if the proposed 2% income tax would affect workers in the former Dillard’s space, “and that concerns us.”
Such an imposition of income tax could impact Cafaro Co.’s ability to bring a tenant or tenants into the space, he says.
The weekend leading up to the township trustees’ vote, Cafaro attended a public meeting hosted by Rafoth. While Cafaro attended the public meeting to get information on the project and has expressed his concerns for the project, he isn’t opposed to it, he says.
“I never met any of those people in that room before,” Cafaro says. “We happen to have, at least at this point, a common interest in wanting to know what is going on there.”
However, their motivations for opposing the project are different from his concern about the lack of details on the project up to this point, he adds.
In February 2019, Cafaro Co. purchased the former Dillard’s space for $8.92 million. Cafaro also owns a number of national retail venues, including the Eastwood Mall in Niles, chief competitor of Southern Park Mall.
This creates a situation where two competitors are operating in the same facility, says Jason Loree, Boardman Township administrator, so it creates a “competitive discussion” where both developers are competing with each other to bring in tenants.
“You’ve got two competing mall developers, which is a rare thing. That doesn’t really happen,” he says.
Washington Prime Group has been as upfront as possible with its design and layout, and have been “literally broadcasting it inside the mall on a projector screen,” Loree says.
“They’ve been pretty up front with us about what they intend to do with their development, outside of their tenants,” he says. “I would hope that would be enough for some company looking for a different kind of venue to utilize the space.”
Copyright 2020 The Business Journal, Youngstown, Ohio.