The city of Columbus and partner Columbus Regional Health on Friday completed the purchase of FairOaks Mall, the first step in its anticipated redevelopment into a year-round community recreational and sports tourism complex.
The purchasing partners utilized a $450,000 grant from the Heritage Fund — The Community Foundation of Bartholomew County, to purchase the 35-acre mall property from FairOaks Mall Owner LLC for $5.9 million. The paperwork was completed and signed at 11 a.m. Friday, when the new owners took control of the property.
The settlement statement for the sale of the property includes the payoff of a first mortgage loan on the mall property of $3.83 million and a real estate commission for the sale to Veritas Reality of $295,000, both costs incurred by the seller.
As part of the transaction, Columbus Regional Health is being credited for a Phase 1 environmental study at $2,700, a Phase 2 environmental study for $9,500 and the mall survey for $22,915. The hospital system was credited as part of the transaction with $7,634 for a structural investigation of the property.
The partners created the FairOaks Community Development Corp. as the purchaser of the property. Its board will oversee future development of the property.
With the takeover of the mall, the remaining 15 tenants will notice few changes for the next year, other than a new landlord, board members said.
For at least the next three years, retail businesses operating in the mall — which opened in 1990 — will have an opportunity to be part of the transformation, Mayor Jim Lienhoop said. All existing tenant leases will be honored, he said.
However, Tom Brosey, a retired Cummins Inc. executive hired by the city to assist with the transaction and future redevelopment, has said the development corporation, the city and the hospital system are not interested in running a retail-focused mall. In an earlier interview, Brosey was clear about the new direction the mall property would be taking.
“We have no intention for it to be primarily retail,” Brosey said. “Retail can be complementary. For example, Dunham’s (Sports) could be very complementary to the sports and recreation programming.”
Food and restaurant services are also complementary to the suggested sports-tourism use for the mall property, he said earlier.
To that end, the development corporation on Wednesday approved retaining current mall property managers Veritas Realty of Indianapolis for a six-month, potentially renewable contract at $7,900 a month plus employee expenses.
Brosey said he will be meeting with Veritas staff next week to discuss its budget plans for the mall property for 2019, including taking a look at the current staffing level of three employees, he said.
Maintenance and custodial duties will be handled by Veritas, and the management company will also handle snow removal and other contractual arrangements for the exterior of the building, board members said.
In January, the development board plans to appoint a design and planning committee to begin work on sending out request for proposals for a design for the project.
Board members have said the design process will include opportunities for public input and comment about the project as it proceeds.
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Columbus and Columbus Regional Health have completed the purchase process to buy the FairOaks mall property for $5.9 million. The city will be the majority partner, putting up $4,087,500 or 75 percent of the property’s $5,450,000 appraised value. The hospital system will provide $1,362,500 or 25 percent of the appraised value. The Heritage Fund has committed to providing $450,000, which is the difference between the selling price and the appraised value.The city is prevented by state statute from paying more than the appraised value.