Lorain County putting together plans to purchase Midway Mall

A divided Lorain County Board of Commissioners on Tuesday said it would be the financial backer for a potential deal for the Lorain County Port Authority to purchase Midway Mall in Elyria for redevelopment. Two commissioners committed to supporting the plan with taxpayer dollars, while a third questioned whether it was the result of a behind-the-scenes real estate deal done through the secret actions of another. An early estimate is that the plan would involve the commissioners backing a loan to the Port Authority, costing $13.9 million and allowing the Port Authority to become sole owner of the mall property, commissioners and county officials said. The vote was 2-1: Commissioners Matt Lundy, a Democrat, and David Moore, a Republican, gave their promise to finance a loan to acquire the mall on Elyria's north side if the Port Authority Board of Directors votes to do so. Commissioner Michelle Hung, a Republican, cast the dissenting vote. She publicly accused Moore of trying to do a deal to buy the Midway Mall behind hers and Lundy's backs. Hung said Moore has been working on a deal to purchase the mall since January 2021 "without the knowledge of the two other members of the board." "Not true," Moore said in the midst of Hung's public accusation. Moore "is pushing this through because he thinks he has a right to a blank checkbook to just go out and buy property in Lorain County and redevelop it," Hung said. Moore declined to respond further to Hung's allegations during the meeting: "There's no need to comment to anything she says," he said. He later expanded on what he said were her reasons for voting against the project. Lundy, who had to call for his fellow commissioners to behave and maintain decorum at one point during Tuesday's meeting, said he doesn't see a future for the mall property unless a single party, in this case the county, has control over it. "The only way we can move forward is (the mall property) has to come under one-party control," Lundy said. "Right now I see this as the best option to be able to do that." The proposal Chief Assistant Lorain County Prosecutor Dan Petticord, the board's legal counsel, said commissioners were passing a memorandum of understanding with the county Port Authority to finance the purchase of the mall property once the Port Authority board works out a deal. Lundy said the early estimate of the cost, provided to the commissioners by Port Authority Executive Director James Miller, is that the plan might cost $13.9 million. The commissioners would agree to back the loan with taxpayer funds, he said. Petticord said Tuesday's agreement is not a completed development deal, but a step toward helping the Port Authority board decide "whether it's economically viable and whether it makes sense for the port to be the owner." Nothing was signed Tuesday and nothing will be set in stone until Miller has done the research and due diligence, has his questions answered and presented it to his board for a decision, Petticord said. Commissioners agreed only to lend the Port Authority the funds to make the purchase if they determine the deal found to be a wise investment at the stated price, he said. The county previously put forth a plan to build a convention and event center at the mall, but Lorain County voters in May rejected a hotel bed tax that would have provided initial funding for those plans. Voters previously had rejected the tax by a wider margin at the polls in November 2021. Petticord said a project of the size being proposed by the Port Authority has a lot of details involved. "I believe the purpose of this board vote today is to tell the Port Authority to go ahead and take the action to get the extension if possible, allow them to complete due diligence (and) let Jim (Miller) and his people review environmental reports," he said. "The Port Authority board can make the determination whether the purchase is worth going through on their behalf." Hung objects Hung said she only recently learned that Moore has been talking about the county buying the mall. "For a year and three months, it was represented that all three commissioners knew about this land acquisition and mall purchase, when I in fact did not know anything about it," she said during Tuesday's commissioners meeting. "I don't feel that this board should be financing a purchase of a mall for redevelopment. I'm not interested in any real estate schemes that another commissioner has been working on for close to two years, a year and three months of it without the other members of the board having knowledge of it." Hung said the cost in taxpayer dollars would be somewhere between $13 million and $14 million, "and I'm not interested in writing a check to fund the purchase of the Midway Mall." While declining to respond to Hung's accusations, Moore said there is still work to be done, and that the Port Authority board may need a time extension to finish it. "Whether or not they get that extension we won't know until they're done with their process," Moore said. "There's a lot of stuff we shouldn't be talking about right now because it's still in the middle of negotiations." He said the best way forward to redevelop the mall property is to get all of it under one owner. The land currently is split between numerous owners, including Industrial Commercial Properties (the former Sears, Sears Automotive and Dillard's), Namdar Realty Group, KE Elyria (Johnny K's Powersports/the former Macy's building), Water Street Development (the former TGI Friday's building) and other smaller landowners. The Elyria Planning Commission voted unanimously in September to allow ICP and Namdar Realty Group to consolidate their property into five parcels, and the two landowners also entered into a 20-year operating agreement with each other to hopefully get the mall under one owner, The Chronicle-Telegram reported at the time. Moore said Miller and the Port Authority board have been asking all the right questions and doing their due diligence to make a deal on the property. To move forward, "they need assurances from this board that they will have sufficient funding to complete the project," he said. "We're not advancing the funds, we're giving them the authority to proceed with the backing of this board financially." Moore said he expects further negotiations and renegotiations in the meantime, "hopefully" continuing into 2023, and wanted to give the Port Authority board the "ammunition" to negotiate a deal. "But today's decision, if it doesn't happen today, pretty much stops the whole project," he said prior to the vote. Hung said she didn't believe moving forward or not on Tuesday would stop the whole project. There are still environmental reports to be reviewed by Miller and the Port Authority board, she said. The commissioners are "not a property redevelopment board," Hung said. "We provide services to our residents. I'm just not going to agree to a blank checkbook for one commissioner for his pet projects," she said. Hung said she was told there is no other path to developing the mall other than the commissioners "writing a check and funding this." Lundy and Petticord described Tuesday's process a "pre-approval" for a deal, with Lundy saying he might not be on the board when a deal is finalized. "I certainly am not opposed to progress and redevelopment of that property," Hung said. "My position all along has been the taxpayers shouldn't be footing the bill for the loan or one commissioner writing a blank check for the property." "Just so people understand, there's a difference between funding and lending," Moore replied. "And just so people understand, that's why I asked multiple times: Why was the county the only source to make the loan?" Hung replied. Moore and Hung, continued Moore denied a backdoor deal with any developers in a subsequent interview with The Chronicle on Tuesday. Hung has been involved and informed of a possible deal "from day one," Moore said. He further questioned her grasp on economic development matters in the county and called it "typical" of her to "paint other people having issues" while her behavior since the 2020 election has resulted in an investigation by the state auditor's office. "I'm not going to debate someone like that," Moore said. It is the Port Authority board that will be making a decision on whether to purchase Midway Mall, he said. Moore said he would have more to say about the money behind the proposal when the board of commissioners meets again Dec. 14. Hung said later Tuesday she stood by her comments from the morning's meeting. She said she and Lundy asked Moore for information he had on any mall development plans but weren't getting it. "I can't speak for Matt (Lundy), but I was not part of those conversations," Hung said. Moore "had never mentioned doing this work to try to get the property owners together. It was a year and three months that Dave (Moore) just was not forthcoming with me as a commissioner, unilaterally working on this land project." "I don't think it's right, ethical or appropriate to be working this deal as one commissioner for over a year," she said, especially with health and safety issues including the need for funding a new jail on the commissioners' long-term agenda. "I can't see spending millions to loan it to the Port (Authority) for a real estate scheme of Dave's," Hung said. "We have other things we need to be thinking about for the future of our county." Lundy's stance Calling himself "conservative and cautious" about such projects, Lundy said Tuesday he learned from Moore shortly before the bed tax vote in May that there were discussions about the Port Authority purchasing the mall. "I didn't authorize anything and Commissioner Hung certainly didn't," but when it came through that multiple investors were on the same page, he said he sought more information from Moore. "I wasn't aware Dave (Moore) was having these discussions until early in 2022," Lundy said. The outgoing Democratic commissioner, who lost his seat on the board to Republican Jeffrey Riddell in the November election, said he felt all the commissioners' individual positions were "well-stated" at Tuesday's meeting. Lundy will become safety service director in Elyria once his term as a commissioner is up in January. During Tuesday's meeting, he said the question he gets the most when speaking with people in Elyria is what the county plans to do about Midway Mall. The mall is in an "amazing location," near both the Ohio Turnpike and Interstate 90, he said. Lundy further called it "pretty sad" to see how the mall has deteriorated in recent years. Lorain County residents have had to drive past it and watch the decline for years, he said. "There's three different owners there who at least until this date have not been able to get on the same page, and I think we've reached a place where we can actually get this under one-party control," he said. Lundy said if the county backs a loan through the Port Authority, it will expect to get its money back just as a bank would. He said the commissioners discussed "extensively" the Port Authority's ability to repay a loan and how to do so. Lundy said it's clear some people will like the decision, while others are going to question it. "I can tell you a lot of research has been done to this point, a lot of thought has been given to it," he said. "This is a bridge that's before us that needs to be crossed to keep the process moving forward." Both the city of Elyria and the county have been discussing the mall's fate for years. Built in the mid-1960s, it is one of hundreds of malls across the United States that has seen a decline in attendance and occupancy in recent years. Elyria's plans In February, Elyria Mayor Frank Whitfield had proposed a health and wellness center and "clean" industrial manufacturing park at the mall. The Cleveland Clinic would be the anchor tenant of a 50,000 square-foot medical office building, with Whitfield hoping to persuade light industrial manufacturing companies to become tenants. Whitfield proposed financing the project with a 30-year, $4.5 million tax increment financing agreement in exchange for a $20 million investment over five years from ICP. In June, Whitfield appeared before county commissioners and told them the city was willing to partner on redeveloping the mall. The mayor said in a phone interview Tuesday that the city still is in contact with The Cleveland Clinic and while he was "not really in a place to talk where the Clinic is at on things," that relationship still exists. "My hope is that Midway Mall makes sense for them, but it's gotta make sense," Whitfield said. "I still think that's viable. I think that brings private sector jobs to the space. It's important we get that private sector in the mall, tax dollars, tax revenue (and) good paying jobs to our communities. I think that's got to be a priority for the redevelopment." Having a single owner for the property means that a potential buyer or developer only has to negotiate with one player, Whitfield said. He said he was glad that Tuesday's action by the commissioners shows that redevelopment of the mall is "still important, still moving forward." (In response to Whitfield's comments, Lundy told a reporter that "you couldn't ask for a stronger tenant" than the Cleveland Clinic for the Midway Mall property.) Elyria has had discussions with the commissioners and Port Authority to keep communication and a working relationship open, Whitfield said. "If the Port Authority decides to move forward, whoever the owner of the mall is, we want to continue to work with them," Whitfield said. Port Authority to meet Miller said the Port Authority board will take up the issue in a closed executive session because the matter is a real estate transaction covered by an exemption to Ohio's Sunshine law. That meeting is expected to take place at 6:30 p.m. Monday in a fifth floor meeting room at the County Administration Building in Elyria, he said. Miller confirmed he is still waiting on environmental and mechanical reports on the property, and expects those within two weeks.He compared it to a home inspection being done before a sale goes through. "It's not a done deal, I don't want anyone to think it's a done deal" to buy Midway Mall yet, Miller said. Such a final decision is up to the Port Authority Board of Directors, he said. But commissioners have said they'll provide funding through a loan, Miller said. "I don't know exactly what we're going to redevelop it into" if a purchase goes through, he said. "We're not in that position yet, but we're in discussions." Contact Dave O'Brien at (440) 329-7129 or dobrien@chroniclet.com. Follow him on Twitter @DaveOBrienCT.