What’s the Plan for Southern Park Mall? Cafaro, Residents Blast Incentives, Few Details
BOARDMAN, Ohio — Anthony Cafaro Jr. admits it’s been a challenge to market the former Dillard’s department store space at the Southern Park Mall.
The co-president of Cafaro Co., which owns and operates a number of retail shopping centers in the U.S. including the Eastwood Mall in Niles, says his primary concern is the former Sears space that was demolished this year to make way for the DeBartolo Commons project. The $30 million endeavor of Washington Prime Group, the owner and operator of Southern Park Mall, proposes to build a community space with green space, bandstand, athletic fields and retail stores.
However, the details on the project have been few, Cafaro contends.
“We’ve seen different renderings and restaurants facing out, but to me, they haven’t answered the necessary questions of how it will be an economic stimulus for the community,” Cafaro says.
The space for DeBartolo Commons sits adjacent to the former Dillard’s space, owned by Cafaro Co.
While Washington Prime has mentioned community events and concerts, Cafaro wants to know what that means. Will there be a fence around the space and will admission be charged? If so, will concert attendees be parking in front of the former Dillard’s building, which would potentially hinder parking for that space, he says.
And will the events be “beneficial and desirable” to other mall tenants, he asks.
“Those are the types of details that really are lacking at this point,” Cafaro says. “We want to understand, and we feel we’re entitled to understand, how they’re going to activate that space and bring people there. We all want to attract people who are coming to frequent other businesses at the Southern Park Mall and the stores at the Dillard’s space.”
A request for comment emailed to Washington Prime Group had not been answered at the time of this posting.
Cafaro echoes the concerns of some 15 residents who attended the Monday morning meeting of the Boardman Township trustees. For nearly 90 minutes, trustees and residents sparred over the application submitted by Washington Prime for a community entertainment district. A key element to the community entertainment district, or CED, would allow the Columbus-based developer to pursue five additional liquor licenses for tenants of the renovated space.
The vote “does a circuitous end run” around the standard procedures, argued Carl Rafoth, an attorney with Friedman & Rummell Co., who said the matter should be brought to a vote of property owners who live in the precinct where the permit is being sought.
Such a vote isn’t needed because the mall is already zoned for alcohol sales, explained township administrator Jason Loree. “It doesn’t require a vote because it’s already been established as a wet precinct,” which includes additional permits, he said.
Another aspect of Washington Prime’s plan includes an on-site stormwater retention system. The public didn’t get to vote on it, which “has been imposed as an additional tax on Boardman Township property owners, including myself,” said Rafoth, who’s lived in the township for 50 years. He contends it’s another way to get around allowing the public to have a say.
To help pay for the creation of the stormwater basin to mitigate flooding off mall parking lots, Washington Prime is seeking an incentives package of $6 million that includes a property tax abatement for new construction at the site.
Rafoth asserted that the proposed tax abatement for Washington Prime is “to accomplish something that they should be paying for themselves,” he said.
“Then, they want to self-impose, according to what I read in the CED application, an income tax on themselves,” Rafoth said. “That looks like the fox guarding the chicken house. And then kick back some of that back to themselves? This whole thing smells. It doesn’t seem fair.”
Over the weekend, Rafoth hosted an informational meeting on the project, which Cafaro attended.
The CRA, or community reinvestment act, that would provide a tax abatement for the project was approved by the Boardman Board of Education earlier this month and will be voted on by the Mahoning County Board of Commissioners.
“With the addition of the water retention at the mall, that’s going to help us where no retention originally existed,” trustee Thomas Costello said. “They’re putting in retention systems now where the Sears property once stood, which should benefit our community.”
The retention systems will have to meet county standards as approved by the county engineer and will be reviewed by the ABC Water and Stormwater District, Costello added.
The trustees voted to pass the agreement with a unanimous vote.
The consensus among those attending the meeting was that trustees were quick to approve the CED for the project, which could potentially put a tax burden on residents without discussing what type of tenants would be going there.
Trustees advised residents that Washington Prime was in the midst of negotiations with prospective tenants and couldn’t divulge any of their identities. The company has mentioned some possible tenants, including Planet Fitness and an indoor golf recreation facility, but trustee Brad Calhoun said Washington Prime can’t say anything for certain.
Even so, the trustees appear convinced of Washington Prime’s commitment to the success of the project and to begin construction by spring 2020.
“As we’ve been told by Washington Prime, this is the No. 2 asset that they’re spending money on in all of their holdings,” Calhoun said. “They’ve never seen anything move so fast as far as all their construction deadlines and everything like that to get this done for their 50th anniversary.”
Trustee Larry Moliterno cited other areas that have redeveloped their malls and have seen improved economies in the community as a result. Conversely, Costello remarked on what happens when a mall goes dark.
“You want to talk about property tax values? They go straight down,” Costello said. “You want to talk about increased taxes? The mall’s paying close to $3 million a year in property taxes. If that mall goes dark, guess where that assessment goes. It goes on all the other property owners.”
Costello added that having the Southern Park Mall go vacant would eliminate competition for Cafaro.
“Forgive me for stepping on toes, but Mr. Cafaro would probably like nothing better than to see the Southern Park Mall go vacant, because then he’s got the only mall in town,” Costello said.
When reminded that the Cafaro Co. purchased the former Dillard’s space for $8 million, Costello replied, “to put the mall under, that would be a good investment for him.”
“We’ve obviously made a very large commitment in acquiring the former Dillard’s,” Cafaro said in a phone call Monday afternoon. “So, the future and viability of that investment and our ability to have a return on that investment is largely depending on that property there at Southern Park Mall.”
Without a sustainable business model, hosting concerts is “a very short-term solution,” he argues. Without a long-term solution, the former Dillard’s building could be attached to a series of empty storefronts, “and that is our concern,” he says.
Cafaro is also concerned with the proposed joint economic development district, or JEDD, that would apply a 2% income tax to those working new jobs created in the former Sears space, would impact Cafaro’s ability to attract businesses, he says. While workers at the Eastwood Mall pay an income tax — a point that was brought up during the Boardman Township trustees meeting — it’s because Eastwood is situated in a city municipality, while Boardman is a township, he says.
“It’s not an income tax that comes back to us. We don’t get anything from it,” Cafaro noted.
At one point during the trustees meeting, communication between trustees and residents became heated as each side started speaking over the other. Moliterno sought to put a stop to it by insisting that any residents who wished to speak on the record do so one at a time using the provided podium and microphone.
“We are not going backwards here. I’m not going to allow people to be bullies in these meetings anymore,” he said.
“Then don’t bully us,” one resident shouted back.
Another resident spoke up saying there was “a disconnect” between the trustees and residents and said, “We’re tired of feeling like we’re getting the short end of the stick. You’re making decisions and we’re not a part of it.”
“You should not feel like you don’t know,” responded Moliterno, who assured those gathered that residents can call any of the trustees at any time to discuss township business.
Pat Rose, retired CEO of BBB of Mahoning Valley, said she’s excited for the entertainment district, but has concerns on the trustees’ due diligence researching other communities who have put a tax burden on residents to help malls struggling with issues similar to Southern Park Mall.
Loree, the township administrator, cited a tax-increment financing, or TIF, agreement, used to assist the Polaris Fashion Place indoor mall in Columbus. Locally, a TIF was used to help develop the road infrastructure for the Hollywood Gaming at Mahoning Valley Race Course in Austintown. Washington Prime Group used some of these techniques to revitalize other properties, Loree said, including the Great Lakes Mall in Mentor.
Another resident brought up the issues of decreasing population and impact on the potential market for the community entertainment district.
The CED application is based on a township population of 40,889 as of the 2010 census, with the expectation that the “population has increased over the last nine years,” according to the application.
However, pre-2020 census population estimates show Boardman has fewer than 40,000 residents, an opponent said.
“To me, we’re losing people and we want to put something in that’s entertainment for everybody, but what are you getting from entertainment?” he asked. “You’re getting a good feeling, which is great. But how much do you want to pay for this great feeling?”
With the Covelli Centre and new Youngstown Foundation Amphitheatre drawing residents for events, will they go to the proposed stage area at the mall, he asked. Further, with large employers like General Motors Lordstown no longer in the picture, will residents have the disposable income to do so?
The resident’s concern is that Washington Prime Group may be investing in the project only to turnaround and sell the mall when completed.
Kathy Miller, a former Boardman Township trustee, echoed that concern, saying that on Dec. 17, Moody’s downgraded Washington Prime’s senior unsecured debt to B1 and revised its outlook on the company to negative from stable.
“The ratings downgrade reflects Washington Prime’s continued weak operating performance from its mall portfolio, which has inhibited the REIT’s ability to maintain its financial leverage targets,” states Moody’s website. “Furthermore, Washington Prime’s liquidity profile remains weak and absent external capital raises it will be highly reliant on its unsecured line of credit over the upcoming year.”
Miller questioned why the community should have to provide a tax abatement to assist with the redevelopment of the mall.
“That was their choice, not ours,” she said. “It’s not our job to take care of them financially. We have enough people in this town that got flooded that could certainly use some help financially.”
Moliterno said he is excited that Washington Prime wants to “reinvest and reinvent this mall,” he says, “much like the Eastwood Mall has done.”
“This is a lot more about saving jobs, creating new jobs and improving our property values, and helping prevent an increase in property taxes down the road if something were to happen to that mall,” he says. “We have to do the right thing, which to me is making decisions that are based in the long-term success of this community. And sometimes those things can be seen in black-and-white right in front of our faces.”
The community must be willing to take risks based on information, he said, and judge the project years later.
A resident responded, saying Washington Prime could receive the incentives and end up not building anything, which Moliterno didn’t deny was a possibility. “There’s nothing that’s guaranteed in this life,” he said, but restated the importance of the trustees to do what they can to set the stage for a successful project.
“Can I sit here and promise you 100% that five years from now we’re all going to be doing jumping jacks? Obviously not. But there’s not a single decision that we make in our lives that we can say that about,” he said.
“I’m going to make the best decision I can based on the information I have,” Moliterno continued. “But at some point we’ve got to start making decisions based on what’s in the best interest in our community 10 years from now, 20 years from now, 30 years from now. … And you’ve got to do that by taking chances, taking risks and trying to do the right thing.”
- Financing Unanswered at Mall Community Meeting
- Washington Prime Seeks ‘Stacks’ of Incentives for Mall
- Southern Park Mall Rebuilds for Next 50 Years with DeBartolo Commons
Copyright 2020 The Business Journal, Youngstown, Ohio.