By CARL E. FEATHER - email@example.com
ASHTABULA TOWNSHIP —
According to a study released to the Star Beacon last week, Ashtabula Towne Square will suffer more store closings after the holiday shopping season unless a major anchor store is secured.
“...I would expect that several of the remaining tenants in this building would be making a decision after the holiday sales/December year-end,” wrote Paul Esterer, a consultant hired by Growth Partnership of Ashtabula County to study the mall situation. “January 2013 will most likely not be favorable for news on this Mall, especially without strong sales in the stores or some major announcement of a new long-term anchor tenant.”
The report did not come as a surprise to members of a task force formed to help retain and attract mall tenants while a new owner is sought. Eight hundred jobs are at stake.
“Realistically, we understand that the mall situation is probably going to get worse before it gets better,” said Sean Ratican, executive director of the Ashtabula County Port Authority and a member of a task force.
The task force also includes representation from county commissioners, Growth Partnership for Ashtabula County and Ashtabula City and Township. Last week, members met with Esterer to review his findings.
Port Authority members on Friday heard a summary of Esterer’s review, which included both good news and bad. The good news, said Ratican, is that some of the stores, such as Red Lobster and Tractor Supply, which are considered part of the mall complex, do very well.
Trouble is brewing elsewhere in the mall, which was foreclosed upon land is owned by US Bank. Esterer’s report notes that:
• Christopher & Banks will be leaving by year end;
• Fashion Bug is also on the way out;
• Game Stop has announced that it is closing locations across the county, but no specific word on the Ashtabula location has been made;
• JoAnn Fabrics, according the study, is leaving at the end of this year, although other sources have denied the exodus. The retailer reportedly said it would stay if the landlord would provide free rent and electricity.
• Esterer also expressed concerns about the long-term viability of JC Penney and Kmart, which face challenges that go beyond the local stores. He noted that Carmike Theatre, the only movie house left in the county, struggles to make money with only six screens and a poor location in the mall.
The report describes several recent deals that fell through, including one for a 35,000-square-foot tenant who was ready to sign a lease in October. The deal stalled when the parties controlling the mall would not agree to free rent.
The ownership of the property is complex — US Bank is the official owner since the receiver’s foreclosure sale last summer. It is believed the property is owned in an investment partnership similar to the kind the former owner, Cabot, used to purchase it from Cafaro four years ago.
Beyond that, there are several legal battles going on that “may cloud the eventual sale and redeveloment of this site,” Esterer notes in his report. LNR Property LLC of Miami Beach appears to be the commercial real estate servicer that represents US Bank. Adding to the confusion is that Cleveland-based Kowitt Passov is in charge of leasing to new anchor and small stores, while another firm, McKinley, handles existing contracts.
Despite the tangle of parties and litigation, Ratican said “the mall actually has a plan now” to move forward with efforts to attract new tenants.
Esterer’s report makes several suggestions, including purchase by a local economic development or community organization. Commissioner Peggy Carlo was quick to give her thoughts on the county owning it.
“I’m definitely not in favor of the county buying the mall,” she said in the port authority meeting. “We own enough things.”
Esterer’s report notes that the community needs to recognize that the mall will not be filled with retailers, regardless of who ends up owning and controlling it. Some of the suggested alternative tenants include medical, education, residential, government offices and call centers/office space.
Ratican predicted that better days are ahead for the mall once the legal issues can be ironed out and a buyer located. The price range, according to the report, is estimated at $5 to $10 million. The Ashtabula County Auditor has set the value at $27 million for 14 tracts, but the owner is attempting to prove a market value of $5 million, according to Esterer’s report.