Dillard's transfer plan criticized

Dillin

The Blade/Jetta Fraser
Buy This Image

Dillin

Two Toledo councilmen yesterday questioned the wisdom of a proposed deal meant to help move along the eventual redevelopment of the nearly vacant Southwyck Shopping Center.

Officials in the Finkbeiner administration revealed yesterday that the deal includes spending $1.5 million to remove asbestos from the closed Dillard's store on top of the already publicized $1 million price tag to buy the building and an adjacent parking lot.

"We really have to address Southwyck, but we are doing this the wrong way," council President Michael Ashford said after the plan was reviewed at a meeting of council's economic development committee yesterday.

The plan, first revealed last month and presented yesterday with revisions and additions, requires the city to pay $1 million to the M.G. Herring Group of Dallas for the store and parking lot. Developer Larry Dillin then would buy the prop-erty from the city for the same amount, while covering about $5,000 in closing costs from both sales, said Jennifer Johnson, an administration attorney and manager of real estate for the city.

"We would not take the property unless Mr. Dillin signs a purchase agreement," Ms. Johnson said.

The city would issue a zero-interest loan up to $1.5 million to itself through a revolving loan fund to pay for the asbestos removal.

Mr. Dillin would repay to the city 80 percent of the city's cleanup cost 30 days after the asbestos is removed, she said.

"When Larry closes on his private financing and has his tenants lined up, we will have that 20 percent reimbursed to the city at that time," Ms. Johnson said. "It's just a temporary discount, so we will never have to pay anything."

Councilman Betty Shultz says removing asbestos from the closed Dillard s store at Southwyck Shopping Center could exceed the $1.5 million specifi ed in the transfer proposal.

Todd Davies, the city's commissioner of development, said the agreement with Mr. Dillin would be "palatable to council."

But Mr. Ashford remained unconvinced after the meeting.

"The City of Toledo in this deal has become the middleman of buying private property, doing the cleanup, and then turning around and selling it to a private developer," he said. "That's not our role and responsibility."

Councilman Betty Shultz speculated that the cost of removing the asbestos could exceed the estimate, as was the case with the former Toledo Edison Acme power plant in East Toledo. "As we speak, the towers at the Acme plant can't be removed because it got to be too costly," she said.

Mr. Ashford said the administration doesn't know $1.5 million will cover the asbestos removal. Ms. Johnson assured the committee the city would pay at most $1.5 million.

Councilman Mark Sobczak, chairman of the committee, said the administration "injected itself into this process in the first place to move the process along and keep everybody's feet to the fire."

The plan, which needs council approval, could get a vote today.

Mr. Dillin declined comment last night. His redevelopment plan would eliminate much of the enclosed mall.

In its place would be a mixed-use development of stores, offices, and residential development in the mold of Mr. Dillin's Levis Commons project in Perrysburg, complete with fountain, a pavilion, and a clock tower.

Construction would run from May, 2009, to May, 2010.

Dillard's was the last remaining anchor at the 35-year-old mall. It vacated last month.

Not including the department store - owned by M.G. Herring - Dillard's Inc. of Little Rock owns half of the mall. The other half is owned by the business partnership of Sherman Dreiseszun and Tom Morgan of Kansas City.

Mr. Dreiseszun died Dec. 2 in his Leawood, Kan., home.

The Lucas County auditor valued the shopping center at $13.95 million.

Contact Ignazio Messina at:

imessina@theblade.com

or 419-724-6171.