Washington Prime Seeks ‘Stack’ of Incentives for Mall

YOUNGSTOWN, Ohio – As work continues on the redevelopment of the former Sears space at the Southern Park Mall, Washington Prime Group is in the midst of developing a “stack” of incentives with local agencies that would offset some of the costs.

Matt Jurkowitz, Washington Prime vice president of development, briefed the Western Reserve Port Authority’s board of directors Tuesday morning on the work at the mall. Overall, the incentives package would reimburse the development company $6 million of the project total cost, estimated at roughly $30 million.

“What these $6 million of reimbursed funds – we’ll pay for it all on the front end – will do is allow us to enhance our project. They allow us to do things we otherwise wouldn’t be able to do,” he said in an interview after the meeting, such as the creation of a stormwater basin that would help mitigate flooding from water flowing off the mall’s parking lots.

All incentives, Jurkowitz added, would only go to “nonrevenue investments and improvements,” such as the stormwater basin or environmental contamination from materials like asbestos in the old Sears building.

WRPA has already approved a capital lease program for Washington Prime, which will allow the company to forgo sales tax on construction materials for the new exterior stores at Southern Park, as well as the adjacent DeBartolo Commons park and entertainment space. John Moliterno, executive director of the port authority, said the incentive was valued at roughly $500,000.

The largest incentive, Jurkowitz said, would be a property tax abatement for new construction at the site. Taxes currently paid on the Southern Park Mall site will continue, with no money “touched or rediverted.” Monday night, the Boardman Board of Education voted to support the abatement and the township trustees will vote Dec. 30. The final step would be approval by the Mahoning County Board of Commissioners. 

Also being considered is the creation of a joint economic development district for the new spaces at the mall, Jurkowitz said, which will allow a 2% income tax to be charged to those working in the new spaces. The JEDD would require Boardman Township to join with a city in the county with an income tax of 2% or higher. 

“That’s our expectation at this point. It’s not up to us to make the call, it’s up to the sponsoring jurisdictions,” Jurkowitz said. “It wouldn’t apply to anyone that’s not working at the mall. It wouldn’t apply to anyone working at the mall who’s not working in the JEDD. It’s very limited. The fact of the matter is, if you work at our competition in Niles [at the Eastwood Mall Complex], there’s 2% tax there. If you work in Columbiana, it’s there. In Youngstown, it’s 2.75%. If you look across the way, this is normal [for a tax rate].”

If those three programs, he noted, don’t amount to the full $6 million Washington Prime is looking to offset, the company is also considering seeking a community authority designation in partnership with Boardman. It would allow the entities to impose “a new property tax upon ourselves and only ourselves.

“You could take a very small amount of additional tax, put it onto your own parcel for a limited period of time and pass part of it on to tenants,” he explained. “It’s being paid in and then those dollars are collected and refunded to [us]. If there’s, say, a dollar of tax, 50% would be reimbursed by tenants and 50% by us.” 

Moliterno noted that are plenty of moving parts on projects like this, with each agency playing its own role. That teamwork, he said, is crucial.

“There are some projects where they can help and we can’t and vice versa. We talk about it and put a plan together so we can present that to the companies,” he said. “We’re all part of a team. None of us can do it ourselves. We have to be a team to make it happen and have proper economic development in the Valley.”

The Washington Prime vice president also laid out some of the company’s plans for redevelopment. In addition to two already-announced tenants – an indoor golf center and Steel Valley Brew Works, owned by Stone Fruit Coffee owner Josh Langenheim – the mall is in discussions with two restaurants for exterior spaces along the southern side of the mall.

“We want to focus on the tenancy of the future. In our minds, that’s higher quality soft goods and things you’ve seen in the mall recently, as well as more experiential offerings: entertainment, food and drink, events,” Jurkowitz said. 

DeBartolo Commons will serve as a park space at the mall, connected to Boardman Park via a trail. Washington Prime owns a parking lot across California Avenue near the Tinseltown theater that will be converted to the stormwater facility, and along the edge of that, the trail will connect to a parcel owned by the park.

While plans have been discussed for several months, Washington Prime sees the space as one that can constantly evolve to meet customer demands, Jurkowitz said. 

“This whole area is very flexible. In the future, we’ll add things once we figure out what’s needed and what might be an improvement. We can evolve this over time,” he said. “What you see is what we’re intending to build, but there are still details that will be firmed up. We have opportunities to improve this.” 

The WRPA board also heard progress reports on a other development projects.

Anthony Trevena, director of economic development for WRPA’s Northeast Ohio Development and Finance Authority, said with the success of Eastern Gateway Community College classrooms on the first floor of the Harshman Building, plans are being made to add five classrooms on the second floor.

Jimmie Bruce, president of the Stuebenville-based community college, will also make the building his primary office, Trevena reported.

“His official office will be here in the Harshman Building, the corner office where Mr. Harshman used to be,” he said. “There will be space for the financial staff from Steubenville to come up and work in the area adjacent to his. We’ve always come up with the idea of a board room similar to what’s at Eastgate.”

The first tenants at Youngstown Development Center should be moved in by summer, reported Sarah Lown, public finance manager for the finance authority. The Austintown board of zoning appeals recently granted a variance for the property, which had been zoned agricultural. 

“That gives us the chance to go to our next phase, which is to find more resources to make this work,” she said. “We have more than enough partners to occupy the 10 buildings on site. We just brought in a new partner from Columbus called Boundless. They’re a wonderful organization that will enable us to do after-school programming and all sorts of good things.”

Mahoning County is set to take ownership of the building in February and some funds are available to make improvements ahead of the first tenants moving in. The state, which previously operated the center, has made $1.2 million in upgrades to the site’s electric system. 

Also on the port authority’s agenda was an update on the Youngstown-Warren Regional Airport. Moliterno and Randy Partika, project manager and development engineer for the Development and Finance Authority, met Monday with officials from the Federal Aviation Administration in Detroit. Under discussion were capital projects for the coming years at the airport. Among the recent work was replacing lighting at the airport. 

The only remaining work is replacing lighting and signage along the secondary runway. Akron Fulton International Airport is interested in purchasing the removed equipment that’s still usable, Partika noted.

“We want to bring commercial service back. The state of Ohio has stepped up and their assistance will allow us, absolutely, to get commercial service back at the airport,” Moliterno added. “Those are things we’ve hoped for and they’re actually happening.”

Heading into 2020, he said, the Mahoning Valley seems to be in better shape from an economic development standpoint than it was just six months ago.

“What’s happened with Lordstown Motors and General Motors deciding to build the electric-battery plant and with JobsOhio and the state stepping in to provide additional dollars for our airport, we all of a sudden have smiles on our faces because these are things we’ve been hoping can happen for years,” Moliterno said.

Pictured: Washington Prime Group vice president of development Matt Jurkowitz briefed the Western Reserve Port Authority’s board of directors on upgrades to the Southern Park Mall.

Copyright 2020 The Business Journal, Youngstown, Ohio.