City invokes eminent domain for mall: Toledo OH Free Press, 9/21/07

By Duane Ramsey

The City of Toledo's proposed use of eminent domain for taking the Southwyck Mall properties for redevelopment will be the subject of a public hearing on Sept. 24. The issue of eminent domain became official with a resolution presented to City Council Sept. 18.

The resolution (603-07), calling for the use of eminent domain for the roadway extension at Southwyck Mall, was discussed and held for the next Council meeting on Oct. 2, due to the hearing, according to City Council Clerk Gerald Dendinger.

Eminent domain for Southwyck is the topic for the Environmental, Utilities and Public Service Committee meeting scheduled for 4 p.m. Sept. 24 in City Council chambers. The public is invited to attend and voice its opinion on the proposed use of eminent domain.

City Council member Rob Ludeman said eminent domain is a tool the City of Toledo can use to get Bill Dillard and Buddy Hering, who own parcels at Southwyck, to complete the deal with Larry Dillin, president of Dillin Corporation.

“Dillin's offer to them is above fair-market value for the property so Larry has gone as far as he can,” Ludeman said. “The city would have to pay them fair-market value,” if it purchased the property through eminent domain.

Ludeman said he has attended meetings with Dillard and Hering, and they are aware of the city's possible use of eminent domain and they did not react well to it. Ludeman said he believes they may be dragging their feet to avoid the issue until Dillard's opens its new store at Fallen Timbers.

“I don't want the city to own that property, but I want to do what's necessary to move forward with this project,” Ludeman said, referring to the redevelopment of Southwyck.

Councilman Frank Szolosi said he has “a fundamental opposition to the city's use of eminent domain.” He cited situations where the city's collaborative efforts with the owners and developers of Westfield Center and Westgate resulted in positive results.

“They [the owners of Southwyck] have a history of not cooperating and running Southwyck Mall into the ground. Those uncooperative owners are the reason we have to look at eminent domain. We can't let them hold us hostage,” Councilman George Sarantou said.

Dillin said his firm is attempting to purchase the parcel that includes Dillard's store and parking lot from the private investor to whom Dillard's sold it. They are also trying to buy Dillard's' 50-percent interest in the 50-50 partnership that owns the other two parcels at Southwyck.

“There's a lot of misconception about what's going on and who's responsible for what,” Dillin said.

“I think the city is frustrated just as I am that we have received no response to the offer we made in May. We made an offer in excess of what the market value would be with no response to our offer,” he said.

With the purchase of the one parcel and 50-percent interest in the other two, Dillin would have controlling interest of the property. Dillin declined to disclose their offers for buying interest in those properties.

Three of the four parcels that comprise the Southwyck Mall site are the target of the city and Dillin for redevelopment of the site. A McDonald's restaurant is located on the smallest and fourth parcel on the total site of Southwyck Mall.

The three parcels the city and Dillin wish to purchase have a total assessed market value of $13.95 million for 2007 taxes, according to the Lucas County Auditor's Office. The total taxable value or 35 percent of those parcels is nearly $4.9 million.

A total of $383,742 in net general taxes was paid on the properties in 2007. The City of Toledo's share, based on the 5.99 millage rate, was $46,206, according to the county auditor.

If the city proceeds with purchasing the property through eminent domain, it could issue bonds for economic development through the Port Authority, Sarantou said. The city hopes Dillin would then purchase the property from the city, he added.

Dillin's firm is ready to move forward with its plans for redevelopment of the Southwyck property once it gains controlling interest in it.

“We feel very strongly about our plans to rejuvenate the Southwyck property and want to move forward with them,” said Bill Thomas, director of real estate services for Dillin Corp.

Dillin's plans for the Village at Southwyck presented to the City of Toledo, involved demolishing most of the larger buildings of the existing Southwyck Mall, Thomas said.

At press time, Thomas was unsure whether anyone from Dillin would attend the Sept. 24 meeting. They have attended meetings in the past when the city has asked them.

“If the city asks us to attend, Larry [Dillin] or I would attend the meeting,” Thomas said.

Thomas said the Dillin firm had nothing to do with the city's latest plans for a connecting road through the Southwyck property. If the city has plans that show a connecting road, “We were not involved in them,” he said.

An engineer from the city's Department of Public Utilities unveiled the design for the proposed access road that would connect Brownstone Boulevard. on one end and Cheyenne Boulevard on the side of Southwyck Mall. Those plans were presented to City Council with no participation from Dillin's firm.

Dillin said their site plans for the redevelopment have remained the same as what has been shown to the city and general public during the past few years.

“Our plans for Southwyck never called for a road through the middle,” Szolosi said. “I'm just not sure it's good policy to act in this manner.”

“It appears that the city is using the necessity for the road to justify the use of eminent domain,” said Linde Hurst Webb, a local attorney with experience in eminent domain cases and study. “If they have appropriation for the road, the Ohio constitution allows government to take property for the road without proof of necessity [for it].”

Toledo Mayor Carty Finkbeiner did not respond to requests for comment.

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