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by Jon Chavez, Blade business writer
The Blade (Toledo, OH)
12-24-97
The deal for a fifth regional mall in the Toledo area may be in jeopardy as Toledo Mayor Carty Finkbeiner insisted yesterday that he will not sell the Toledo-owned land in western Maumee unless the developer commits to an "upscale" shopping center.
Further, the mayor emphasized that no deal would be made if any stores in Toledo leave to go to the new mall. He said the developer, Bryan businessman George Isaac, Jr., has provided no such assurances.
"In the absence of that not being an upscale regional mall, there will be no deal," Mr. Finkbeiner said. "I have no verification they can't take business away from our existing malls, and they aren't going to get that land unless they verify that."
As a result, Mr. Finkbeiner said, he has spoken with other developers about the site off of U.S. 24 just west of I-475/U.S. 23.
The controversy comes the day after Mr. Isaac said he and his partner, Chicago-based mall developer General Growth Properties, Inc., would pay the $6.01 million to buy the property for a mall. Although specifics are unclear, about 130 of the 430 acres at the site would be used for a mall.
Mr. Isaac told The Blade yesterday that he doesn't think the mayor can legally kill the sale.
"We have an agreement of Aug. 21, 1995, and an extension ... to purchase that property," Mr. Isaac said. "And we've conformed with it 100 per cent."
He notified the city Monday that he will pay the balance owed to acquire the land, on top of $500,000 he spent to retain an exclusive purchase option. He has until Dec. 31 to complete the purchase or the option expires.
There is no language in the purchase agreement stipulating that the mall, which would be built and owned by General Growth, has to be "upscale" or consist of anchor stores new to the area, Mr. Isaac said yesterday.
Shopping mall industry experts said it is unlikely that General Growth would bring in large, new retailers to the area.
Mr. Finkbeiner said yesterday that, since May, 1995, when Mr. Isaac proposed the project and asked the city for an option to buy its land, he has "insisted that this be an upscale mall" in correspondence and conversations.
The mayor said he has asked Mr. Isaac to provide a list of General Growth's anchor tenants, but he has not done so. Mr. Finkbeiner said he has asked Ed Yosses, city law director, to examine the purchase agreement to see whether the deal is valid if the mall plan is less than originally presented.
Mr. Isaac said yesterday he has received a letter from the mayor stating Mr. Finkbeiner's position, "but we didn't even know what he was talking about in the first place."
General Growth, the nation's No. 2 mall developer, is constructing the mall and would have to address the mayor's concerns, Mr. Isaac said.
Shawn Ingall, a General Growth spokesman, said yesterday she has no details about the mall or the anchor tenants. Typically, information about tenants is announced when all the anchors have signed leases and the project is closer to breaking ground, she said. However, General Growth said Monday it did not purchase the land to let it sit idle.
Mr. Finkbeiner, at a press conference yesterday, indicated he is not waiting for General Growth. He said he has spoken to both the Richard E. Jacobs Group, Inc., of Cleveland, and Glimcher Realty Trust Co., of Columbus, about developing the 430 acres, located north of U.S. 24 and west of Jerome Road on land that Maumee annexed from Monclova Township after Toledo purchased it.
A spokesman for the Jacobs Group, which developed Cleveland's famed downtown "Flats" entertainment district, had no comment yesterday on discussions with Mr. Finkbeiner.
Glimcher officials did not return phone calls.
JCP Realty, the real estate development arm of J.C. Penney, originally was a partner in the project with General Growth, but it is unclear if the company is still involved.
"Penney's sounds like it's a given (to become an anchor), and Sears goes with Penney's practically everywhere," said Phil Stillerman, president and publisher of the Jones Report, a retailing/marketing industry newsletter based in Indianapolis.
Another possible anchor would be Kohl's, or even Marshall Field, depending on how upscale the project is and whether the Dayton Hudson parent wants to put a second Marshall Field into the market, he said.
Dayton Hudson is converting it's Hudson store in Franklin Park Mall to a Marshall Field store.
General Growth's anchor stores will depend on what type of market it is trying to hit, Mr. Stillerman said. "Does General Growth want it to compete (with Franklin Park), complement it, or be something totally different?" he said.
"If it's going to compete, then you run the risk of convincing others to leave or taking stores and anchors away from existing malls."
That means the older malls -- Southwyck Shopping Center, North Towne Square, and Woodville Mall -- have to gear up or compete for store commitments from tenants, Mr. Stillerman said.
Another mall industry expert, who asked not to be named, said retailers already in the Toledo area market are possible tenants in the new mall, including Penney, Sears, Elder-Beerman, Kohl's, Target, or even Wal-Mart. He said he does not think new anchor retailers would come to Toledo.
"Franklin Park is one of the most formidable mall properties in the nation," the expert said. "I don't think anyone wants to take them on."
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