9/13/2004

Jury to Decide Whether City’s Southtown Buy is Fair

Owner claims eminent domain proceedings undervalued mall

By Sara Eaton

A jury to be selected today will decide the value of Southtown Mall to settle a dispute between Fort Wayne and the debilitated mall’s owners.

The weeklong trial is expected to bring closure to a contentious eminent domain battle over the property, which is currently being demolished after the city took possession in March.

Several appraisers and city officials are expected to take the witness stand

City officials are eager to begin the long-awaited trial and believe the outcome will be in their favor, City Attorney Tim Manges said.

The other side wants to get the trial over so it can begin the appeals process, said Stephen Fink, attorney for Haywood Whichard, one of the mall’s owners.

Whichard has said repeatedly he believes the property at U.S. 27 and Anthony Boulevard, on the city’s south side, is worth at least $6 million. Whichard, who first fought the city’s condemnation effort, has said that if three court-appointed appraisers did not come back with what he believed to be a fair value, he would pursue the jury trial.

The city paid $3.44 million for the property earlier this year after three court appointed appraisers determined that to be the value.

Whichard, who purchased the beleagured property with other investors in 1998, closed Southtown on Feb. 1, 2003, after giving tenants less than a month’s notice. The mall had lost its anchor stores, L.S. Ayres, J.C. Penney Co. and most recently Sears after slowly losing smaller stores.

In the past several weeks, Allen Circuit Court Judge Tom Felts has ruled on pending motions, including what type of evidence may be introduced to the jury. Felts ruled against Southtown’s introducing any evidence of possible sales of the property that fell through and were not completed.

Most recently, Felts ruled that Southtown cannot factor in the city’s intended plans for the property to the mall’s owners’ equation determining the potential value of the mall.

Manges described the decision by the judge as huge and said it benefits the city’s case.

Fink, on the other hand, believes the city has lost perspective “in its zeal for obtaining the property.”

“The city has convinced the judge to exclude the best evidence,” Fink said. “We will appeal after trial. We do not expect a favorable outcome.”

He expects appeal issues to stem from the judge’s rulings but declined to be more specific about which rulings.

Since the city paid Southtown owners the $3.44 million, Felts has ruled on several motions for payment by various interested parties.

Last week, he issued an order for Southtown’s owners to pay Allen County back owed taxes.

Fink said the Southtown owners have also been ordered to pay the 2004 taxes, which he believes have already been paid, but questions how that is fair since the city has had possession of the land since March.

Fink and Manges both said there are no more outstanding bills to be paid. The sole remaining issue for the trial is the value of the property, they each said.

Both said their parties have been interested in settling the matter without going to trial but both said the other hasn’t made reasonable offers.

The property is being demolished and the demolition is in the first phase, said Craig Berndt, the city’s brownfields redevelopment manager. Berndt is the project manager for the Southtown site for the city.

The next phase will include demolition of the Sears building and USA Billards but the earliest it will begin is late October. The third and final phase will include the Bridgestone/Firestone building, he said.

The demolition is going well so far, he said.

The plan for the 114-acre site calls for a Menards home improvement store, another big-box anchor store and about a dozen other stores, restaurants and businesses, most lining U.S. 27. Menards is expected to break ground in the spring and open for business by the holidays, Berndt said.


Journal Gazette: www.fortwayne.com