Toledo City Council voted 11 to 1 on Tuesday against tax abatements that would have helped a California-based company redevelop the former Elder-Beerman property on Secor Road, siding with residents who protested the financial incentives.
Councilman Rob Ludeman was the lone vote in favor of the tax exemptions.
The vote comes after weeks of debate about whether to grant Niki Toledo I, LLC, which owns the former department store at 3311 Secor Rd., about $978,000 in tax breaks to help cover the $1.2 million cost of ridding the property of asbestos.
The Niki Group, a San Diego real estate investment firm, bought the property in 2015 and planned to demolish the 154,000 square foot department store and build 50,000 square feet of new retail.
It has tentative contracts with two retailers to occupy the space — T.J. Maxx and Bob’s Discount Furniture, but company officials said they would not be able to make the project work without the tax incentives.
City economic development officials recommended Niki get a 50 percent tax exemption for 15 years of the property’s assessed value before remediation, and a 100 percent exemption for 15 years after remediation.
A small but vocal group of Old Orchard residents organized against the proposed tax abatements, arguing that other new businesses along Secor Road have successfully redeveloped without the financial incentives offered to Niki Toledo.
The Elder-Beerman store closed in July, 2018, after its parent company Bon-Ton Stores went bankrupt.
Old Orchard resident Harry Ward said he was pleased city council members listened to the residents. He said he believes the retail jobs that could have been created through the redevelopment wouldn’t have been new to Toledo, but rather would have shifted existing retail jobs to the shops from elsewhere.
He also argued that Secor Road is redeveloping just fine without the assistance of tax exemptions.
“I don’t think that anything there is going to sit vacant for too long, just because of the great amount of development along Secor Road,” he said.
Mr. Ludeman sees it differently. He believes the vote against the tax incentives will stymie development at both the former Elder-Beerman and the now-vacant Sears building nearby.
“If those that voted against this have sent a message to the owners of the Sears property, how long are both of those going to remain vacant?” he said.
Kevin Baker, with Landmark Commercial Real Estate, is a partner of Niki Toledo and said he isn’t sure what will happen now with the property.
“The abatement was really the key to making it financially feasible,” he said. “Do we want to lose money and do the project? We don't want it to just sit there.”
He said he is disappointed in Tuesday’s vote and believes it did a disservice to the city by hindering a project that he argued would have brought more jobs, investment, and eventually more property tax revenue to Toledo.
“There are not many cities out there that have the economic tools in their arsenal to get these projects done, and Toledo does have it and doesn't use it,” he said.
District 5 Councilman Sam Melden, who represents the area where the building is located, said he took the vote seriously and weighed the positions of both the developer and the neighbors.
“We did not vote on eliminating the possibility of any future development. All we said was, ‘We’re not supporting this exact proposal, for this exact development, at this exact moment,’” he said. “My hope is that we’ll go back to the drawing board and figure out something that works better.”
First Published February 25, 2020, 9:15 p.m.
