Tax incentives aid Tri-County Mall redevelopment project
SPRINGDALE — The city of Springdale has approved a tax-increment financing incentive worth $200 million to the Texas companies pursuing a $1.1 billion redevelopment of Tri-County Mall.
And those developers have accelerated the pace of their project to include a hotel and concert facility in its $431 million first phase.
“Every time we come to town, something gets better about this project,” said Michael VanHuss, managing partner of Dallas-based Park Harbor Capital LLC. “As word has gotten out about the redevelopment plans, we’ve had a lot of people approach us that have an interest in participating.”
Park Harbor partnered with Market Space Capital LLC of Houston to announce the mall’s purchase in November. Since then, the team has been refining the mix of real estate uses it wants to bring to the site and working out financing details so selective demolition can begin this fall and new buildings can rise from the 76-acre site next year.
“It’s going to be a great place to go,” VanHuss said. “We’re going to have enormous amounts of restaurant (options). Hopefully we’ll have a DORA designation and entertainment district designation. We’re going to have something to do whether you live work or play out there. Whatever you want to do, there’ll be options for you.”
Springdale Economic Development Director Andy Kuchta said the project will redefine the city. Instead of a town with a dying mall, it will be a place that attracts millennials and empty-nesters with upscale apartments, public events and a hiking and bike trail that someday connects the property to the Ohio River.
“You’re not going to fully grasp it until you’re walking down the main plaza and you see these new five, six, 10 story buildings on either side of you and you see these ground-level restaurants with outdoor seating and kids running around and activities going on,” Kuchta said. “People are not going to really understand it ‘til they’re there and they’re in it.”
A few major hurdles remain. Developers must secure private financing for roughly $800 million in construction planned for the site and finalize a bond issue through the Port of Greater Cincinnati Development Authority. In addition, the Springdale Planning Commission has yet to consider a final development plan.
“That has a lot of detail,” Kuchta said. “It’s got the specific colors for each building, sample materials for the buildings, a very detailed landscaping plan that shows the different kinds of trees and bushes. (It requires) almost construction-ready documents.”
But VanHuss feels good about the work that lies ahead because of how far the project has come in the last few months.
“We’ve had 100% support from day one. We haven’t had a single cross thing said to us about our redevelopment plans. Not one,” VanHuss said.
The fall of the mall
The mall has an outsized importance as both a real estate anchor and cultural asset. Built in 1960 and encompassing 1.3 million square feet of retail space, the enclosed shopping center was Cincinnati’s largest when WCPO’s I-Team ranked it as the region’s second-most endangered mall in February 2020.
The mall had 65 empty spaces at the time and a Singapore-based owner that had no plans for redevelopment. Then came the pandemic and the 2021 closure of the mall’s last anchor, Macy’s.
“It was just sad to see,” said Harrell Smith, who was director of security at TriCounty Mall from 2009 to 2016. “On a Friday, Saturday night it was crowded from 3 o’clock until the mall shut down at 9. Now, you walk past, all you hear is footsteps, just echoes. It’s different.”
Old and new
VanHuss was aware of the emotional attachment people have with malls because of his work on the Collin Creek Mall in Plano, Texas. He negotiated the purchase of the site for American Centurian Development Group, which is now working on a $1 billion redevelopment that will include 2,300 single-family homes.
But Tri-County has an advantage that Collin Creek does not: Most of its structures can be adapted for re-use.
“This is kind of a badge of honor for us,” VanHuss said. “When we started working with BHDP on the design, the easiest thing to do is wipe the canvas clean, just completely raze everything, and start afresh. That wasn’t where our heart was at. We were very committed to being environmentally friendly and so we worked with BHDP on every existing structure that’s out there and we tried to find uses for it.”
BHDP was the architectural firm that designed a second floor for the mall when it expanded in 1990.
VanHuss was surprised to learn the firm not only had the original drawings for that expansion, but employees who worked on the project.
“They didn’t want to disturb the existing tenant base that they had in the original strip center and so they designed this like a suspension bridge,” VanHuss said.
That means the massive support columns and girders that held up the second floor of retail space can be re-used for a bank of apartment buildings with the original mall skylight between them.
“Out of 2.7 million square feet of concrete that’s existing out there, we are going to be able to re-use 2.4 million,” VanHuss said.
Of the mall’s four anchor buildings, only Sears will be demolished. The former Dillard’s store will house a Springdale recreation center and a 120,000-squarefoot STEAM School, where students will learn robotics, computer programming and music production in half-day excursions from all over the Princeton City School District.
VanHuss said the re-use strategy made the mall’s $37 million purchase price easier to justify.
“We got 176 structured parking spaces,” VanHuss said. “That’s close to $75 million” in demolition and construction cost avoided.
Evolving plan
Although it will have a mixture of uses, the renovated Tri-County Mall will essentially be an amenity-rich apartment community when developers complete their work in 10-12 years.
“We’ll have two concert facilities,” VanHuss said. “One will be in the 2.5 acre plaza. We’ll have a sound stage out there. And in that plaza we’ll have concerts, farmer’s markets, probably weddings, auto shows, craft shows, things of that nature. We hope to have concerts two or three times a week in the plaza. But we will also have a restaurant/ bar venue that’ll operate about a 35,000-square-foot concert venue.”
VanHuss declined to name the concert venue operator but described it as a “large nationwide entertainment group” that contacted him after the Tri-County project was announced. He expects it to book local and regional acts that perform three to four nights per week.
VanHuss also declined to identify a hotel operator that wants to build a 120-room limited-service hotel on Princeton Pike between Starbucks and Outback Steakhouse. VanHuss said he signed a preliminary agreement for the hotel, which is subject to city approval. He doesn’t know what flag, or hotel brand name, it will use.
The apartment details are also in flux. Springdale’s development contract allows VanHuss to build up to 2,600 units. But he now expects to build 2,200 market-rate apartments, including 500 in the first phase. The units will rent for about $2 per square foot, or $2,300 for a typical 2-bedroom apartment. That’s nearly twice the average 2-bedroom rent in Greater Cincinnati at the end of 2021, according to commercial real estate firm, CBRE.
VanHuss said there is no plan to add condos or affordable housing to the mix at Tri-County.
“The project is so expensive that anything other than market rates will be difficult for us to finance,” VanHuss said.
The 2,200 apartment units are substantially more than other developers proposed for the site in recent years, said Kuchta. He supports the higher density as a way to bring back office workers who left Springdale during the pandemic.
“Springdale lost more than 2,000 workers with a $60,000-or-higher household income in March 2020,” Kuchta said. “We need to replace those people and where are they working at now? They’re working out of their homes.”
But he also sees a potential downside to the higher density.
“There is going to be more police and ambulance calls,” Kuchta said. “We’re going to do our best to plan for that and gear up for that.”