Wednesday, May 12, 2004

Mall rehab plan back on track


Developer gets alternative financing

By Patrick Crowley
The Cincinnati Enquirer

CRESTVIEW HILLS - After teetering on the brink of collapse, a $70 million plan to redevelop the almost vacant Crestview Hills Mall is moving forward but without a hefty chunk of taxpayers' money

J.R. Anderson of Jeffrey R. Anderson Real Estate, a Cincinnati development firm, told members of Crestview Hills City Council Tuesday that the company is expecting to close within a few a days on a loan of about $50 million from Huntington Bank that will finance the project.

Dillard's Department Store, the only retailer left in the 20-year-old Kenton County mall, will put up another $20 million or so to build a new department store at the site.

Plans call for Anderson Real Estate to tear down the existing mall. An outdoor, upscale "lifestyle center" similar to Rookwood Commons in Norwood - which Anderson also developed - will be built in its place.

Dillard's will continue to operate during the demolition work, which began Monday, and plans to have its new store open by the spring of next year.

Anderson told city officials that the entire project, a total of about 60 stores and restaurants, is scheduled to open in November 2005, in time for the holiday shopping season. It will include a bookstore, apparel shops, specialty retailers, trendy restaurants, common walking and gathering areas and a center courtyard featuring a bell tower and chimes built by the Verdin Co. of Cincinnati.

"Timing here is absolutely critical," Anderson said. "We don't have everything signed (on the financing deal), but we're confident enough that this is going to happen that we're moving forward with the demolition."

After hearing Anderson's news about the financing, the Crestview Hills Economic Development Committee unanimously voted in favor of the company's development plan. The full council is expected to pass the plan at its Thursday night meeting.

"It's going to be beautiful," City Administrator Dan Groth said.

Crestview Hills had previously voted on a bond issue that would have provided financing for the project. Anderson Real Estate was responsible for paying back money borrowed though the sale of the bonds. But the company was not required to pay property taxes during the 20-year life of the bond issue, according to its agreement with the city.

Anderson Real Estate did strike a deal with the city to make payments in lieu of taxes of more than $5 million over 20 years.

But state finance officials balked at the deal after Kenton County Judge-executive Ralph Drees raised concerns that the tax-incentive package was too generous. He said entities that survive on public tax dollars, including the Kenton County Schools and Kenton County Library, were not getting a fair shake because they were losing out on millions of dollars in potential tax payments.

"I was not against the project," Drees said Tuesday. "I was against the way it was being financed."

After Drees made his concerns public, Anderson Real Estate said the project was in jeopardy because the company was uncertain it could raise or borrow the money privately.

"This project was definitely teetering," Anderson said. "Ralph Drees almost single-handedly took down the whole project."

Drees said Tuesday that he is glad the project is being built and happy the schools and others will be getting "the tax dollars they should be getting out of a project like this."

"There is not another site around here as ripe as that is for development ... of an upscale mall," Drees said. "The area wants it, and we're for it. But I knew it wasn't going to die. It's too good of an idea ... and I knew eventually somebody would step forward with some private financing."

E-mail pcrowley@enquirer.com




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