Sunday, June 25, 2000
Walgreens refuses to yield
Nordstrom iffy if drugstore won't budge
By Robert Anglen
The Cincinnati Enquirer
Walgreens officials are holding the trump card in a financing plan for a downtown Nordstrom and they're not folding.
Although a $12.7 million loan for Nordstrom hinges on moving Walgreens out of a promised site at Sixth and Race streets, the pharmacy's developer said Saturday it doesn't want to go.
It's not fair to ask Walgreens to relocate again, said Herb Brown, spokesman for Western-Southern Life Insurance Co. Especially when they voluntarily cooperated to give up their first site to make room for a Nordstrom store.
$26 million from the city to build the store, a parking garage and skywalks. |
$5 million in tax-increment financing, which Nordstrom will pay in lieu of property taxes.
$5 million loan from the state
$12.7 million from the equity fund.
Monday: Cincinnati City Council members are scheduled to vote on a preliminary Nordstrom finance package at their Community Development Committee meeting at 1 p.m., in council chambers, at City Hall.
Wednesday: City Council will take a final vote on the package, which will allow developers to draft a contract, at its regular meeting, 2 p.m., council chambers, City Hall.
September: Council will vote on a final contract.
But a loan from the Cincinnati Equity Fund which makes up a quarter of the $48.7 million Nordstrom financing package requires the developer to build the Walgreens store somewhere else.
It is an issue that equity-fund board members are go ing to have to negotiate, Mr. Brown said. He refused to comment on whether Walgreens is ready to make any concessions.
It's not a good idea to discuss any negotiations we will have with the equity fund, he said.
That could leave a big hole in the financing package for Nordstrom that City Council has already OK'd and is scheduled to approve officially on Monday.
While council members said they were unaware of the $12.7 million restriction until contacted by the Enquirer, most said they would go ahead with Monday's vote.
How crazy is it that this comes up now? Councilman James Tarbell said Saturday. I'm not sure of the consequences, but I'm not going to change anything.
Council voted in March to move Walgreens to the Sixth and Race site as part of a $3.7 million lawsuit settlement. But council members now say they would like to see the pharmacy moved. City administrators forced the Walgreens down their throat, they say, and they say they had no choice but to accept the settlement.
The council members agree with equity-fund board members, who complain there is already a CVS Pharmacy cater-corner from the proposed Nordstrom site at Race Street between Fifth and Sixth streets. If Walgreens goes in, that would put two pharmacies across the street from each other and leave no room for small specialty shops they hope will follow Nordstrom.
It always stuck in my craw as being a half-baked idea, Mr. Tarbell said.
Councilman Phil Heimlich also said that moving Walgreens makes sense but called it just one of hundreds of details that need to be worked out.
The equity-fund board is not going to do anything to jeopardize Nordstrom, he said. It is time for all of us to get behind the Nordstrom project and make it one we can be proud of for years to come.
The equity fund, created in 1996 to spur downtown development through a private loan pool, represents investments by 12 of Cincinnati's most visible businesses.
The last thing in the world we want to do is slow Nordstrom, said developer and equity-fund board member Neil Bortz. Walgreens won't go quietly into that good night ... but there are places it can be moved.
If council votes on the preliminary finance package this week, a final contract won't be drafted until September. Some council members said that gives developers three months to work out issues such as Walgreens.
But Councilman Todd Portune said going forward in hopes of working out the issues is a risky strategy.
Approving a deal with a lot of loose ends puts someone in the position of holding the city over a barrel, he said. We're exposing the city to risk.
Don't get me wrong, he said. I am glad Nordstrom wants to come to Cincinnati. But there is no real deadline here. We don't have to vote Monday.
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