If Macy’s is not ready to negotiate, University Heights will use eminent domain at

UNIVERSITY HEIGHTS, Ohio — City leaders continue to make progress in seeing through the redevelopment of University Square as City Council approved Monday (Feb. 7) legislation that seeks to bring about, through eminent domain, the demolition of now vacant buildings at the shopping site.

The city is working toward a redevelopment of University Square, located at the southeast corner of Warrensville Center and Cedar roads, that would take place under the partnership KL Holdings LLC. The developers plans to add apartments and several amenities for those apartment residents, as well as reconfigure buildings. Back in September, Mayor Michael Dylan Brennan termed eminent domain the “nuclear option” that would result if negotiations involving Macy’s didn’t occur to allow the developers to add a courtyard and parking garage upgrades.

Macy’s, 2201 Warrenville Center Road, owns it own building at University Square. A an agreement dating to when University Square was built didn’t allow for apartments in the store’s vicinity. Target, which also own its own building, has revised its part of the original agreement to allow for apartments, but Macy’s has not done so. Brennan said last fall that Macy’s had initially agreed to follow Target in allowing apartments, but then decided against doing so. Macy’s has since entered into litigation over the matter.

Brennan, at the time, said that because of Macy’s failure to negotiate, the city would be forced to use eminent domain to demolish the parking garage and University Square’s vacant buildings in order to move the development along.

“This deal should have been done as of May (2021), when Target came to terms,” Brennan said five months ago.

In a separate piece of legislation pertaining to the redevelopment project, council approved a motion to have CT Consulting perform a blight study to assess University Square’s status as a blighted property at a cost not to exceed $8,000. The city, under state law, must bring in a third party to conduct the blight study.

Council passed both University Square pieces by votes of 6-0 (Councilman Christopher Cooney was not present).

If eminent domain proceeds, the garage, and vacant buildings at University Square would be demolished. Macy’s, Target and the Applebee’s Restaurant would not be demolished.

When asked when demolition or construction on the redevelopment of University Square might begin, Brennan, on Monday said, “I can’t give you a date on that. What I can tell you is that there are a lot of steps here and we are diligently moving along with the process.”

Brennan then added, “At any time, Macy’s could come to the table in good faith and make this process a lot faster, but we’ve been waiting on them since May of last year and if only Macy’s could have the enlightened self-interest to realize that this would be beneficial for all stakeholders, we wouldn’t have to do all this.

“We want Macy’s to come to the table in good faith and renegotiate the COREA (construction, operation and reciprocal easement agreement) to allow this development to proceed. If they would simply do that, we wouldn’t have to do this (eminent domain).”

Council, in May, 2020, voted 7-0 to enter into a development agreement with KL Holdings, who are local developers Brad Kowit and Gregg Levy. The agreement would have KL Holdings construct 200 market rate apartments, reconfigure existing buildings, and add a courtyard and amenities such as space for outdoor cooking, volleyball courts, possible bocce ball courts and perhaps a swimming pool, as part of a $30-million project.

If the city takes over the property for demolition, it would not hold on to it, but turn it over to developers for the sake of hastening the project. Eminent domain would also allow for an appraisal of the property to take place.

Brennan has stated that he first ran for mayor in 2017 with a goal of upgrading the now 21-year-old University Square.

“Since its original conception, and the original issuance of TIF (tax increment financing) bonds in 2001, University Square has spent most of its existence falling short of expectations,” Brennan said in May, 2020.

Law Director Luke McConville told council that there are several means under Ohio law by which a property can be proven to be a blight.

“One of the tests is whether taxes on assessments are past due,” he said. “If that’s the case, a property is deemed blighted as a matter of law. I’m confident we’ll discover when we get our final appraisal (of the property) that the total amount of assessments that are past due on this property will exceed its (current) value.”

After appraisal results are known, the city will notify the property owners, University Square Real Estate Holdings, LLC, of the city’s intent to acquire, and would then proceed with a lawsuit to bring about demolition.

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