Two storage businesses, a construction company, a real estate investor and a labor union have turned cheap property at the old Rolling Acres Mall into six- or seven-figure Christmas bonuses.
Between 2008 and 2013, public records show five private landowners paid a total of $1.1 million for 40 acres of rundown department stores and cracked parking lots off Romig Road. They all cashed in exactly a month ago, selling their seven lots for $16.5 million to the builder of a $100 million, 600,000-square-foot facility.
The city expects the new facility to employ at least 500 people. As long as annual payroll hits $30 million for a decade, the city — through an agreement approved this year by the City Council — will provide a property tax break that covers the $16.5 million the developer is paying for the private land, plus $600,000 for 67 acres previously owned by the city. What's left will go into public infrastructure improvements in the immediate area.
The nature of the work remains a mystery. Private landowners signed nondisclosure agreements in exchange for what appear to be lucrative sales. Utah-based Justin Investments LLC bought the old Target store in 2010 for $500,000 and the old Centran Bank at Harlem and Romig roads for $125,000 in 2013. The company transformed the department store into a climate-controlled Storage of America warehouse with a front office in the old bank.
The two properties, valued by county auditors at $885,980, sold last month for $12 million. They were the last of 10 properties (including 67 acres sold by the city) pursued by the mystery developer. For turning over a department store that will likely be razed, this final transaction looks to be the most profitable, generating nearly $3 million an acre. The city sold the publicly held land for less than $9,000 an acre. Justin Investments LLC will get a similar property tax break to move into Chapel Hill Mall.
The city took Rolling Acres mall out of foreclosure in 2016 and then paid $450,000 to tear the structure down. Eventually, the property should generate income tax. Mayor Dan Horrigan economic development team negotiated the land sale and tax incentives to create jobs and spur development in an all-but-forgotten corner of Akron.
With the city promising tax breaks before the private land sales were final, companies that bought up the old mall have managed to do well with their investments, all of which — unlike the city’s share — require the developer to demolish existing buildings.
Grandview Holdings LLC made one of the earliest investments, buying the old Macy’s for $250,000 in 2009 for a document storage business. That property sold for $900,000 last month.
The owner of Jenco Construction bought the old Dillard's in 2010 for $80,000. The company’s owner said he couldn’t have built storage space that cheap. He sold for $2.6 million last month. And LSH Romig Akron LLC, owned by a private land speculator who was the first to make a move back in 2008, bought two building-less parcels orbiting the mall for $47,837 then cashed out a decade later at $225,000.
Teamsters Local 24 moved into the old National City Bank office at 2380 Romig Road in 2012 for $95,000, making improvements that will likely be bulldozed in the coming months. At the transportation workers’ regular meeting this month, it was announced that the union would have to move by Jan. 15.
“We did pretty good,” said the union’s president, Travis Bornstein. The property sold for $800,000. The union is now looking at temporary office space on West Market Street, just inside Akron near Fairlawn, Bornstein said.
The private landowners and the city have been sworn to secrecy as part of each deal. Bornstein would only say that his transaction was managed by CBRE, a national brokerage outfit.
Public records of the deed transfers list the buyer as Fortress Investment Group, which is headquartered in New York City. The private equity firm invests in what might be considered financially underperforming assets, such as old malls and newspapers. Fortress owns New Media, which owns GateHouse Media, which bought the Akron Beacon Journal this year..
Fortress did not respond to an email sent Wednesday requesting comment on the nature of the development or the prospective company looking to hire 500 people. In exchange for tax breaks to help with the development and make public infrastructure improvements, the city had the developer agree to move in a tenant who will pay $30 million in annual payroll for at least 10 years, starting no later than December 2023.
No one will say who hired Fortress or CBRE to negotiate the deals. Rumblings from the land sellers and what scant information can be gleaned from public documents have pointed to Amazon — or a company like it — building a fulfillment center to process e-commerce orders. The company, which also did not comment for this article, has used other old mall property in Ohio and elsewhere to erect sorting and shipping centers, sometimes using a shell company similar to the generic Akron Romig Road LLC buying up all the old property here.
Reach Doug Livingston at firstname.lastname@example.org or 330-996-3792.