CINCINNATI - A Hamilton County judge has ordered the foreclosure sale of Tri-County Mall, the region's second-largest shopping center with 1.3 million square feet on 77 acres in Springdale.
The Hamilton County Sheriff's Office says the property will be sold in a July 11 auction.
The sale could lead to a reconfiguration of the mall to accommodate non-retail tenants, said Jeff Tulloch, economic development director for the city of Springdale.
"I think there is potential for hotel, restaurants, call center activity," Tulloch said.
The 62-year-old mall, at the intersection of State Route 747 and I-275, has been struggling with high debt loads for several years. Wells Fargo Bank, acting as a trustee for mortgage investors who financed the mall's last purchase in 2005, filed to foreclose on the property last April. It has been operating in receivership since last summer.
The May 1 order by Hamilton County Common Pleas Judge Steven Martin said Tri County Mall LLC owed $204.7 million plus interest and attorney fees of about $272,000.
Springdale's Tulloch said he was told recently that an investor has purchased the note on the property and is likely to emerge as its next owner. But he hasn't been able to determine the note buyer's name.
"At the end of the day Tri-County still has a huge identity. It has a tremendous location," Tulloch said. "But if it's not an attractive place for people to go, it's going to fail. Whoever buys it is going to have to buy it at such a low price so that tens of millions can be put into it to reduce the (retail) square footage."
The Princeton School District lost several hundred thousand dollars in annual property tax revenue when mall owners got the Hamilton County Board of Revision to reduce its assessed value twice since 2008, said Princeton Superintendent Gary Pack.
Hamilton County property records show the mall was sold for $179.5 million in 2005. Tax appeals in 2008 and 2010 brought its assessed value down to $66 million.
Pack said the total value of all real estate in the Princeton district declined from $1.8 billion in 2008 to $1.4 billion by 2010. It now stands at $1.6 billion.
"You lose it at Tri-County, you pick it up at GE and Ford," he said.
Tulloch said the declining property values had a minimal impact on Springdale.
Hamilton County could take a hit from a repositioning of the mall to non-retail uses because it relies on sales tax revenue to cover stadium debt and more than 30 percent of its general-fund budget. Tulloch said a reconfiguration is more likely if Steiner + Associates is successful in building its Liberty Center project in Butler County. Steiner announced April 30 that it signed Dillard's as its first retail anchor. Dillard's is one of three department store anchors at Tri-County.
"The Steiner project up north without question will be injurious to Tri-County Mall," Tulloch said. "It's going to have a very strong fashion component to it. If in fact they signed with Dillards, I don't see them keeping this (Tri-County) store."