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Published: Tuesday, 9/25/2007

Dillard's boss faulted in mall deterioration

BY TOM TROY
BLADE STAFF WRITER
'Dillard's is obstructing new life at Southwyck,' declares Dave Lemon, a leader of a citizens' group around the mall. 'Dillard's is obstructing new life at Southwyck,' declares Dave Lemon, a leader of a citizens' group around the mall.
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The Finkbeiner administration yesterday used a City Council hearing to crank up its public pressure on Bill Dillard, a key owner of the declining Southwyck Shopping Center, to sell his company's share in the mall so it can be redeveloped.

Several speakers at yesterday's hearing on a resolution to start eminent domain proceedings against the South Toledo property criticized Mr. Dillard, chairman and chief executive officer of Dillard's Inc., for allowing the shopping center to go into decline.

Dave Lemon, the volunteer leader of a citizens' organization in the Southwyck area, said Mr. Dillard shows no corporate responsibility for the area surrounding the mall, and is "stubbornly refusing" to sell a mall that he is neglecting.

"Dillard's is obstructing new life at Southwyck," Mr. Lemon said.

He said some longtime residents avoid driving past the mall because of the "slow, gradual decay."

Councilman Frank Szollosi suggested a boycott of Dillard's.

District 2 Councilman Rob Ludeman said he would not set foot in the Dillard's store at Fallen Timbers, set to open next week, as a "personal protest."

Councilman George Sarantou said, "It really bothers me that we can't get a national company to be a responsible corporate citizen, and I think we need to take bold action."

A call to Dillard's headquarters in Little Rock was not returned.

The administration's plan for eminent domain calls for a road to be developed through the middle of the mall.

Council President Michael Ashford questioned whether the administration has the legal justification for eminent domain, given recent rulings by the Ohio and U.S. Supreme Court on the use of eminent domain for economic development.

Jennifer Johnson, an administration attorney and manager of real estate, said Southwyck is "underperforming and rapidly becoming more blighted."

She said eminent domain is a "proactive approach" to redevelopment of the area, and that developer Larry Dillin's plan for the "Village at Southwyck" would bring economic rebirth to the 1972 shopping center.

"The administration's intent is to proceed with further negotiations, but if not successful, we will come in with an ordinance to initiate eminent domain," Ms. Johnson said.

However, she said the mall would be taken for a public purpose - construction of a road - and would not be handed over to Mr. Dillin.

She said the frontage on the new road could be sold to recoup the city's investment.

That prompted Mr. Ashford to ask how the city could afford the cost, estimated yesterday at anywhere from $4 million to $15 million, to take over the mall.

The mall is owned by three entities: the Dreiseszun & Morgan partnership of Kansas City, Dillard's Inc., and Dallas shopping center developer M.G. "Buddy" Herring, Jr. Dillard's and the Dreiseszun & Morgan trust own the mall's central part and the former Montgomery Ward store. Mr. Herring owns the Dillard's store.

The Lucas County auditor has the shopping center valued at $13.95 million. A 2004 appraisal done for the city set the value of the mall at under $12 million, Ms. Johnson said.

Mr. Ludeman noted sales of Woodville Mall, with functioning anchor stores, in 2004 for $2.5 million, and the former North Towne Square mall, now Lakeside Centre, for $1 million in 2002. He estimated the fair market value of Southwyck - the price the city would have to pay for eminent domain - at about $4 million.

Mr. Dillin has offered $10.75 million for Mr. Dillard's and Mr. Herring's shares of the shopping center. The Dreiseszun & Morgan partnership is a potential partner with Mr. Dillin.

Donald Monroe, a senior development specialist in the development department, said that Mr. Dillard is asking $13.75 million for his 50 percent stake in the shopping center, and Mr. Herring is asking $5 million.

Also discussed at yesterday's committee hearing was the administration's proposal to spend about $985,000 on improvements to Reynolds Road between Glendale Avenue and Heatherdowns Boulevard. The work would include installing median planters and other improvements, but not repaving. Mr. Ashford questioned the value of spending capital improvement dollars on road projects without paving.

Contact Tom Troy at:

tomtroy@theblade.com

or 419-724-6058.



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