Call it a one-sided game of monopoly.

Several companies buy a mall for $1 million and, after closing it down two years later, let it gradually fall to pieces and become a neighborhood nuisance. The owners then forgo paying property taxes, let public officials do the work of trying to secure the dilapidated structure, and skip payment of utility fees.

Six years later, the city of Toledo — now desperate to be rid of the blighted edifice — offers to take the property off the developer’s hands and demolish it for $700,000 in taxpayer funds.

The developer has to settle about $270,000 in owed taxes and fees, but still gets to benefit from as much as a $3.4 million windfall if the property is later sold.

That, essentially, is the deal currently being offered by the City of Toledo to the California-based owners of the former North Towne Square mall. And it’s a deal more than one city councilman expressed objections to at a committee hearing Monday.

“To me this seems like — for lack of a better phrase — developer bailout,” Adam Martinez stated flatly. “I’m having a real hard time understanding why we would do this.”

The reason, according to emphatic Bell administration officials and councilman Lindsay Webb — in whose North Toledo district the structure is situated — is it’s the only way to purge the city of the long-standing eyesore. It would also allow for future development of the site, located on Alexis and Telegraph roads, into a productive, job-creating business, they maintain.

Funds for the demolition would come from the federal government, in the form of a U.S. Environmental Protection Agency revolving loan, so there would be no impact to Toledo’s general fund, city officials emphasized.

And if the property is sold, the developers would have to pay the demolition costs back.

“This [property] is a nuisance, and if we do absolutely nothing, it’s just going to continue to be a nuisance,” a stern Mayor Mike Bell informed council Monday. “We have an opportunity to turn it around.”

Although council members agreed the structure needs to go, several questioned whether the proposed deal is fair to the city.

The agreement includes a buy-back option for the current owners, an assortment of four companies: S. Kahen Holdings, Echo Investments, Ariel Investment, and 22135 Roscoe/Canoga Park LLC, allowing them to either repurchase the site for the cost of demolition or receive a set amount from any future sale.

That amount would be $55,000 an acre if sold in 2012, $57,500 an acre in 2013, or $60,000 in 2014.

If the full 69-acre parcel were sold at the 2014 rate, the current owners would take home about $3.4 million once they pay the city back the demolition fees.

“I think it is outrageously excessive,” councilman George Sarantou said of the proposed purchase price. “I don’t see a market for it. … It’s just not feasible.”

He and other councilmen said they feared potential buyers would not want to buy the land for the set price, and it could continue to sit empty if the developers refused to accept a lower offer.

According to the Lucas County Auditor’s Web site, the land is currently valued at about $22,000 an acre.

Economic Development Commissioner Brad Peebles countered that the sale price had been estimated based on other land sales in the area.

He said the appraised value of the land could rise once the mall is demolished.

Tearing down the complex could also boost business for other nearby enterprises, said Ron Hemelgarn, who owns 21st Century Super Fitness Center, the only business still functioning on the site.

As part of the proposed deal, his gym would be left intact.

“When that mall comes down I believe things will begin to happen again,” Mr. Hemelgarn said.

Ms. Webb urged her colleagues to “see the forest for the trees.”

Although the deal might not be perfect, it allows the city to take control of the property and do something that will benefit all of North Toledo, she said.

But Mr. Sarantou cautioned that the city should be “very, very careful” in dealing with the developers.

He cited examples of other blighted malls in Kansas and California owned by one of the developers where local governments struggled to deal with deteriorating properties.

Daniel Freiheit, the former owner of a sports cards and collectibles store inside the North Towne complex, said making a deal with the owners would be a “deal with the devil.”

Mr. Freiheit claimed that the developers allowed him to sign a lease and invest $60,000 in setting up his store, only to shut it down 42 days later, allegedly to take advantage of a tax-abatement deal.

Not that the city has much choice in the matter, according to Toledo attorney Matthew Fischer, who is representing the owners in negotiations with the city.

If the purchase and demolition deal does not go through, the current owners will drag out attempts to mandate demolition of the property through the court system for another two to three years, he said.

“Look at the big picture and this deal makes sense,” Mr. Fischer indicated.

Council is set to vote on the proposed deal at its meeting Tuesday.

Contact Claudia Boyd-Barrett at: cbarrett@theblade.com or 419-724-6272.

First Published November 29, 2011, 5:30 a.m.