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The owner of the massive, but struggling, Forest Fair Village mall owes Butler and Hamilton counties millions in unpaid property taxes.
World Properties LLC of New York bought the mall in 2010 at 600 Cincinnati Mills Dr. The related company Cincinnati Holding Co. LLC owns 5 parcels of land in Butler County and 18 parcels in Hamilton County, according to government records.
Cincinnati Holding has reached repayment agreements with the treasurers’ offices in both counties to avoid tax foreclosure.
At the time the company reached a contract with Butler County in March 2011, it owed a total $803,389 in delinquent property taxes, according to the county’s delinquent tax division.
Under the terms of the contract, the company is required to make monthly payments for five years through 2016 of $13,389 on the late taxes. It’s also required for the company to keep current on new property tax bills.
Since reaching the agreement two years ago, payments have been made on time, said Stan Adler, manager of Butler County’s delinquent tax division. The remaining balance owed on delinquent taxes at this time is $627,734, Adler said.
Cincinnati Holding also reached in March 2011 a repayment plan with Hamilton County to pay late taxes in semi-annual installments. At the time that deal was made, Cincinnati Holding owed Hamilton County $5,416,478 on 18 properties.
All required payments to Hamilton County have been made, according to Chief Deputy Treasurer Michael Lonneman. To date, the mall owner has paid down $3,087,357 of its delinquent taxes. The remaining balance owed to Hamilton County for late property taxes is $2,329,121.
World Properties could not be reached for comment.
Karla Ellsworth, general manager of Forest Fair Village, said, “As far as the taxes go, there’s been repayment plans put in place. That I’m aware of.”
However, Ellsworth said she has nothing to do with the taxes and didn’t know anything more about it to comment further.
Previously known as Cincinnati Mall and Cincinnati Mills, the now-named Forest Fair Village is an approximately 1.5 million-square-foot enclosed mall crossing Butler and Hamilton county lines in Fairfield and Forest Park seen from Interstate 275.
In its about 25-year history, the mall has been through at least six owners.
Anchor tenants include Bass Pro Shops, Kohl’s, Babies“R”Us, Danbarry Cinemas and Burlington Coat Factory. Most of the property is empty.
In 2011, Ellsworth announced plans to redevelop the mall as a mix-used family attraction. Talks were to bring a hotel, ice arena and amusement center to the shopping center.
At the time, Ellsworth projected the proposed new mix of tenants could bring approximately 2,000 construction and permanent jobs.
That hasn’t happened and problems with the delinquent taxes and payments on a bond issued a decade ago under a previous owner are holding up the mall’s development.
Nantucket Promotions initially announced plans late in 2011 to open a sports complex at the mall, Cincinnati Sports Zone. The opening has since been delayed while the parties negotiate details of who is responsible for assessments associated with bonds issued by the Port of Greater Cincinnati Development Authority in 2004.
An $18 million bond was issued to pay for property upgrades on roads, parking lots, the existing parking garage, lighting and traffic control.
City officials say the problem isn’t the cost of taxes, it’s the lack of investment.
“Our concern is that really nothing is happening there other than places going out,” said Chris Anderson, community development director of Forest Park. “I wouldn’t say it’s due to taxes, it’s due to the owner.”
“We want the mall the succeed. I just have to say if you have to characterize our reaction to how things have been, it’s been disappointment,” Anderson said. “Nearly 100 acres of property next to the interstate should be earning a good return for somebody.”
The property also received tax incentives to help development.
Fairfield authorized in 2003 a 30-year Tax Increment Financing district agreement for the former Cincinnati Mills to encourage property improvements.
A TIF District is an economic development tool used to help investment.
Under a TIF agreement, the property owner continues to pay property taxes on the value of the property before improvements are made. In reaching a deal, the government and property owner/developer agree to a negotiated amount, factoring in estimates of how much property value will increase due to the new development, and the cost to build the public infrastructure for the project.
The amount agreed to is the amount of bonds that will be issued to pay for construction of infrastructure.
If the project goes well, it generates higher sales, income or property tax revenues to benefit the local government. The property owner benefits by saving money on the cost of building infrastructure such as roads and parking for a proposed project.
The problem is the property values for Forest Fair Village haven’t increased. Rather, property values have declined due to market conditions and lack of investment, Fairfield Development Services Director Tim Bachman said in a June interview. The mall hasn’t created enough rent and other revenues for the owner to pay property taxes owed to the TIF fund, Bachman said.
The city has a back up plan to the TIF fund that isn’t collecting property taxes either.
If the property didn’t pay for itself, from the increased valuation, a special assessment on the mall property also put the owner on the hook to make bond payments in lieu of taxes. But the Forest Fair Village owner is in default on the special assessment, Bachman said.
“With vacancy comes no activity, which becomes no income tax,” Bachman said.
“The second issue is just the property tax back to the counties is nowhere near what it should or could be,” he said. “The other real subjective issues we’re starting to deal with now is lack of property maintenance,” including weeds, potholes, leaking roofs and out-of-date heating, ventilation and cooling systems.
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