FOREST PARK, Ohio — The city of Forest Park is pushing back on a $140 million plan to replace Greater Cincinnati’s biggest empty space with a grocery-anchored retail complex and 50 acres of speculative light-industrial buildings.
And that could delay a development agreement that represents the first of many dominoes that must fall before Forest Fair Mall can fade into oblivion.
“This’ll be the biggest redevelopment going on in our city since the mall was originally built. So, we’ve got to get it right,” City Manager Don Jones said. “We want to create jobs. We want to maximize revenue. If we’re going to have light industrial, we want it to be quality jobs (with) high wages. These buildings should attract that.”
The city and Vandercar Holdings LLC are also sparring over the split of future tax revenue that will flow from new buildings on the site. Jones and Vandercar CEO Rob Smyjunas both said the new construction is projected to generate $77 million in new tax revenue over 30 years.
“There’s going to be some public finance here,” Jones said. “The question is, how big is that incentive package?”
Vandercar announced plans for its redevelopment last week with an aggressive timetable in mind.
Smyjunas said details must be finalized within two months so demolition can be completed before a demolition grant expires next year. To meet that timeline, Vandercar was hoping Forest Park’s city council would approve a development agreement and zone change for the project by early July.
“We all have an understanding that we want the best for Forest Park, but we need to first satisfy the bondholders,” Smyjunas said. “If something comes up where we can make the project better, we’re all ears. And that’s what we want. But right now, we need to have the zoning and a plan that meets the need to pay back the bonds.”
Forest Fair fading fast
This is the latest of several attempts to redevelop the 90-acre mall property, which lies within the jurisdictions of two counties, two cities and three school districts.
New York-based World Properties Inc. purchased the site for $4.7 million in 2010 but couldn’t stop the exodus of tenants including Burlington Coat Factory, Danbarry Cinema and Bass Pro Shops. In 2017, the owner listed the property for $55 million but drew no buyers. In 2021, Texas-based Hillwood Construction Services secured an option to purchase the site and convinced the Butler County Land Bank to obtain a state demolition grant worth $7.9 million.
Hillwood proposed retaining the mall's last tenant – Kohl’s department store – and filling the rest of the site with four large industrial buildings totaling 1.1 million square feet. But that plan never secured zoning approvals and tax breaks sought by the developer, who backed out of the project in March.
That’s when Smyjunas entered the picture, with a scaled down version of the Hillwood proposal that includes a 120,000-square-foot grocery store with a gas station plus three industrial buildings totaling 887,000 square feet. To build support for the plan, Vandercar released a 3D rendering that portrays the industrial “flex space” that could draw office users and manufacturing tenants. It also shows how pickleball courts and entertainment amenities might look on 20 acres near I-275.
“We’re manifesting a success,” Smyjunas told the WCPO 9 I-Team on a walking tour of the dormant mall last week. “We’re out there thinking and speaking into the vibrations of the Earth that we’re going to succeed.”
The tenacious connector
Smyjunas is one of the region’s most active real estate developers, with a roster of projects that includes Oakley Station, The Neighborhoods at Summit Park in Blue Ash and Row on Merchant, a $40 million conversion of a Springdale office complex into apartments.
But he’s also been a behind-the-scenes contributor to several other projects in Cincinnati, China and elsewhere. He’s been described by admirers as a connector, who works his way into deals by finding ways around obstacles like financing gaps, land-acquisition roadblocks and government bureaucracy.
The best example of that approach is the Millennium Hotel downtown, where Smyjunas outflanked others to directly negotiate the purchase of city’s largest convention hotel with Singapore billionaire Kwek Leng Beng.
“That was an interesting one because I was three (wine) glasses into the evening and I had Chairman Kwek’s personal email,” Smyjunas recalls. “In talking to their chief counsel, he said, ‘I don’t know how you did it, but you talked to the one person who could make a decision.’”
Smyjunas hoped to use his $36 million purchase agreement to build a new hotel on the Millennium site as part of a convention center expansion. That deal never panned out, but Vandercar was paid $2.5 million for assigning his purchase rights to the Port of Greater Cincinnati Development Authority – then successfully sued for an additional $5 million commission payment in a case that ended at the Ohio Supreme Court in April.
“He’s an excellent developer – and tenacious,” said Jones. “He’s a really good developer if you need some complicated stuff. And this is about as complicated as it’s going to get.”
About that bond debt
Forest Park is the first stop for Smyjunas in his quest to secure zoning approvals, development incentives, lease concessions from Kohl’s department store and permission by bondholders to restructure a 2004 bond issue that funded construction of a parking garage for the mall’s last major expansion.
The $18 million bond issue still has $10.5 million in unpaid principal and requires nearly $1.5 million in annual debt service payments for the next 10 years, according to recent reports to bondholders. The bonds were supposed to be paid by a tax-increment financing mechanism that collected property taxes on $122 million new real estate value, created by the 2004 expansion.
The problem is real estate value has plummeted on the 90-acre site from $59.4 million in 2004 to $11.6 million at the end of 2023. So, it no longer generates enough tax revenue to make bond payments. To avoid a bond default, Jones said World Properties has paid the annual debt service for the last several years.
World Properties could rid itself of that problem by selling the mall to Smyjunas, who declined to reveal details of his purchase option on the site.
Smyjunas wants to create a new tax-increment financing district “to reconstitute existing bonds and offset infrastructure expenses,” according to his development proposal, provided to the I-Team by the city. He also wants a Community Reinvestment Act tax abatement “to make (Forest Park’s) industrial tax comparable to surrounding municipalities.”
How those two tax breaks would work together aren’t exactly clear, as most of the discussions have taken place behind closed doors. But Jones said the city wants assurances that income tax revenue from new jobs will offset property tax lost to the new incentive arrangements. And Smyjunas said redevelopment is the best way for the city to avoid future losses.
If the Forest Park deal comes together, changes to the TIF would require approval by three local school districts – Fairfield, Winton Woods City Schools and Northwest Local. Fairfield declined to comment. Winton Woods said it will take up to 45 days to evaluate proposed changes to the TIF.
“We’ve seen some modeling and in general the district is supportive,” Acting Superintendent Steve Denny said. “But it has to financially make sense for our taxpayers too.”
But a development agreement is just the beginning for Smyjunas, who also must convince bondholders to support the new TIF arrangement and get Kohl’s department store not to block demolition of the mall. Demolition is another problem, since the Butler County demolition grant requires matching funds from the developer. Smyjunas hopes to modify the deal with more money from the state.
He admits to worrying about all of it coming together at once, but relishes the role of fixing so many problems at once.
“I think the more pieces, just like LEGO, the more fun you have,” he said. “Hey, I’m 61 years old and I’m having fun every day. Every day gets better for me. That’s the way I look at it and that’s the way I approach it.”
