Pepper Pike Company Buys Shenango Valley Mall
HERMITAGE, Pa. – Butterfli Holdings 011 LLC, an affiliate of Flicore LLC, has purchased the Shenango Valley Mall. The transaction closed Aug. 5, according to attorney William McConnell Jr.
McConnell represented GFM 23 LLC, the corporate entity composed of his family, which has owned the property at state Route 18 and U.S. Route 62 since 1945. In 1966, his grandfather, George F. McConnell, entered a ground lease with the mall’s developer and in 2019 the family acquired the building itself.
“We’re pleased to be able to now finally sell the mall property,” McConnell said. “We think it is probably one of the best commercial properties between Erie and Cranberry.”
Flicore is based in Pepper Pike, Ohio. The company has been involved in acquiring, investing and developing real estate for more than 20 years, said Robert Abramovich, executive director and vice president of operations.
Flicore principals include Frank Licata, who was part of the development team that developed the Walmart shopping center in Hermitage and was a principal in the company that developed the Kohl’s shopping center in the city. When Licata was LRC Realty in Akron, he was involved with the company’s attempt to purchase the Shenango Valley Mall.
“Flicore’s mission to acquire high-quality, strategically located assets aligned very well with the positioning of this property. The location, visibility, and overall opportunity are what attracted our group to the property,” said Abramovich.
Terms of the sale were not disclosed as of Wednesday afternoon, and McConnell and Abramovich declined to provide the sale price. The Flicore executive vice president similarly would not discuss prospective anchor tenants for potential redevelopment at the property.
“Flicore is considering multiple visions for repositioning the asset,” Abramovich said. Discussions with any prospective end user are subject to nondisclosure agreements, he added.
Like other shopping center properties, the Shenango Valley mall has had to cope with the challenges of the changing retail environment, one in which anchor stores Macy’s and Sears vacated their spaces there, as have multiple smaller retailers. In addition, the ownership has had to navigate a legal challenge by the sole remaining anchor tenant, JCPenney, which maintained its lease gave it veto power over redevelopment of the property.
The shedding of tenants has led to the property being reappraised a few times, costing nearly $250,000 in real estate taxes to support the city, school district and Mercer County, not to mention the additional loss in employment, said Gary Gulla, assistant city manager.
The JCPenney litigation – which has been further complicated by the retailer’s 2020 bankruptcy filing – caused an earlier deal to sell the mall to LRC Realty to fall through. In January, the trial court overseeing the case ruled against the retailer, which is appealing the decision.
Citing company policy, Abramovich declined to comment on prospects for the ruling being upheld or whether discussions are under way to resolve the litigation outside the courtroom.
Hermitage officials welcomed news of the transaction, especially given the central role the mall property is expected to play in a proposed multimillion-dollar redevelopment project.
“I’m trying to set up a meeting with them to see what their plans are with repositioning the property,” Gulla told The Business Journal Wednesday.
According to Gulla, Hermitage officials had discussions with Flicore representatives and shared information with them while the company was performing its due diligence. He learned the deal had closed over the weekend, he said.
“This is great news for the city of Hermitage and surrounding communities. The city looks forward to working with the Flicore team and supporting their efforts to revitalize the 54-acre site,” added City Manager Gary Hinkson in a news release.
“The city of Hermitage is committed to supporting Flicore in their efforts to reinvest in the site and restore the tax base which has been eroded with the demise of the shopping center,” Duane Piccirilli, president of the Hermitage Board of Commissioners, said in the release. He also emphasized that the board of commissioners “endorses a proactive approach to address this challenge.”
The mall property is at the center of a proposed town center project. Hermitage received about $3.5 million to assist with reinvestments at the mall site and another $2 million that can be used for infrastructure improvements in the area, Gulla said.
A “vibrant city center” with walkable spaces, public open space and a “mixture of uses and entertainment,” was identified as a top priority in the Hermitage 2030 comprehensive plan.
“There are many exciting attributes in the ‘town center’ concept. We are eager to work closely with the city of Hermitage to create the ideal blend of town center features into any retail development,” Abramovich said.
Copyright 2023 The Business Journal, Youngstown, Ohio.