Developer, City Officials Review Changes to Portage Crossing Deal

To help close the Portage Crossing deal, Cuyahoga Falls officials are asking City Council to pass an amendment regarding incentives Stark Enterprises would receive after it develops the $42 million, 241,000-square-foot retail center.

Cuyahoga Falls Development Director Sue Truby presented the restructured deal to Council at the end of its Monday night meeting, and asked that two major changes be made to the language of the contract:

• The city would provide Stark with a reimbursement of up to $50,000 per year for the first 10 years to cover electrical usage in common areas, such as parking lots and sidewalks. The original reimbursement was set at $70,000 for 15 years, but the incentives decreased since the project has shrunk from 391,000-square feet to 241,000 due, in part, to the elimination of Menards. 

• The city would offer up to $129,600 per year to Stark in the form of a movie ticket admissions tax that would be generated by sales at the proposed 10-screen, 35,000-square-foot Cinemark movie theatre. In the 11th year and onward, 100 percent of the money would go into the city's coffers. 

Council will review the deal further at its May 6 committee meeting and Mayor Don Robart, along with his administration, have encouraged council to give final approval by its May 13 meeting. 

Truby said she'd like to close the deal before Stark representatives attend the 2013 Las Vegas International Conference of Shopping Centers on May 20. It's there that Stark hopes to find more tenants to fill the remaining space in the project, she said. 

With Council's May 13 approval, Truby could close the deal by June 30. 

If that happens, construction on Portage Crossing could be underway by August, said Stark Enterprises COO Steve Rubin during a presentation at Monday's meeting. 

Once completed, Truby said Portage Crossing will create:

• 500-plus full-time jobs
• 185-plus construction jobs with an estimated payroll of $4.6 million
• New annual city revenue of $762,000
• $265,000 in new revenue for the Cuyahoga Falls City Schools
• $400,000 in new annual electric revenue
• $124,000 in new water, storm water and sanitary sewer revenue

Truby also said the project will pay itself off by 2033, ten years earlier than expected.

However, councilwoman Carol Klinger (At-large) questioned some of the projections, saying Truby's formula of 2.5 jobs for every 1,000 square feet in the project appeared to be inaccurate. 

Under Truby's formula, Klinger said the Cinemark would employ 85 people, which seemed unrealistic since the eight-screen Plaza Cinemas at Chapel Hill theater only employed 15 full- and part-time employees total. 

Truby defended her numbers, saying her estimates on job creation and new revenue were conservative, but noted that the projections could change. 

In response, Klinger said, "The problem I'm strugging with here is, when I look at the contract, it heavily favors the developer because there are no guarantees in this contract that any of these numbers will be met -- none, not for us, not for the city. . .That's where I see the lopsidedness of this contract, and that's where, I believe, this contract needs to be modified."

Klinger also criticized how city officials plan to, in essence, give the necessary 25 acres of land off Portage Trail to the developer for free.

"Back in 2010, we were only giving away 75 percent of the sale price of this property (valued at $3.9 million)," she said. "The project grew and (the city) said, 'we need to give away all the sale price of the project,' so the developer is paying nothing. . .Now the project has shrunk and no one has asked for that last million dollars back."

No matter how the projections may change Cuyahoga Falls Finance Director Joe Brodzinski said "I have the money set aside for the next several years to pay down this debt and I plan, provided Council approves it, paying down the debt as aggressively as we planned."

Councilmen Ken Barnhart (Ward 3), Terry Mader (Ward 8) and Jeff Iula (At-large) each spoke up in support of the project, saying it would raise property values in the area add boost the city's economy. 

Cuyahoga Falls Chamber of Commerce CEO Laura Petrella said Portage Crossing will and has already created a domino effect of business growth and spin-off development along the State Road corridor. 

"In the last year, we've had four new business ribbon cuttings happen right on State Road," said Petrella. 

Return to Patch for more coverage of Monday's discussion regarding the future of Portage Crossing.