From: Rod Radovanovic
Columbus
I really cannot understand why Mayor Jim Lienhoop signed the letter of intent (LOI) to buy the dying mall for $5,900,000, for several reasons. I will elaborate as follows:
1) The appraisal of FairOaks Mall by Pillar Valuation was only $5,450,000 (as the average price). So why the agreed purchase price was $450,000 higher?
The price seems to be extremely high since the mall was sold just four years ago for only $550,000. Since that was a well-publicized (nationwide) foreclosure auction, the actual sale price at such auction is considered, by most real estate experts, as the market price. So, how then can the market price four years later, with the mall losing in the meantime two major anchor stores (J.C. Penney and Carson’s) be more than 10 times higher?
Also, the mall being about 28 years old, it could have many issues requiring repairs or refurbishing and that further would raise the cost of the mall.
It appears to me that new appraisal for the mall is appropriate and required.
2) At this point the city doesn’t have a concrete and solid business plan for the mall. Often there were tossed ideas of sport complex, year round community recreational area, etc. Those are obviously just loose options.
We have in the near vicinity several gyms open to public and let’s also not forget that Columbus North and East high schools have very nice courts for basketball, volleyball and gymnastics.
So, why wouldn’t the mayor request a new LOI with hopefully a much lower price (it is just a good business to offer a lower price than even lowest appraised value) with a new deadline by mid-2019?
I am pretty sure that current owner, Frankel’s group, and Mr. Yeheskel Frankel have been looking very hard to either revive or sell the mall after two more anchor stores left. So the question is, why haven’t they sold it to anybody else?
On the other hand, if there is another buyer competing to buy the mall (which I am very much doubting) then what would be wrong if some private business would buy that mall? If that would be the case, that buyer surely would have a very solid business plan for the mall and would actually execute it. That would be quite welcome by all of us.
If by mid-2019 there is a solid business plan that would outline all private business partners, details of the required conversions with all architectural and construction costs, revenue predictions (including a loss of about $150,000 property tax), and if all that would indicate that buying the mall (hopefully for a lower price) is a good business decision, then the mayor should sign purchase agreement.
In summary, I hope that this letter would be accepted as a constructive criticism and possibly delay the purchase of the FairOaks mall. However, if the purchase based on current LOI happens, I don’t want to feel that I was complacent by not raising issues against it.
