XENIA — The City of Xenia will begin the revitalization of Towne Square by buying the buildings and assuming the leasehold interests of more than 77,000 square feet.
City Council Jan. 14 approved the purchase from Blue Rock Investments, LLC for $3.35 million and the issuance of bonds to pay for it. The deal will give the city full site control of Towne Square — it has owned the land since 1974 — and end a federal lawsuit filed against Xenia by Blue Rock.
Blue Rock sued Xenia in late 2017, claiming that the city contractor’s demolition of the former Kmart building in Towne Square damaged an adjacent building owned by Blue Rock and Boymel Family, LLC — which was formerly occupied by Fulmer — and that the city abused its powers to coerce Blue Rock into selling the building for a low-ball price.
Judge-ordered mediation resulted in the agreement approved last week. The courts still have to approve it as well, City Manager Brent Merriman told council, and the transaction could be finalized by the end of February. Once the court signs off on the agreement, the lawsuit will be dismissed and the city will take over ownership, including property management and maintenance. It plans to hire Springboro-based Dillin Corp to help manage and develop the property, according to city documents.
Merriman said the city will “pledge non-tax revenues” to retire the debt and pay for associated costs, using proceeds from existing Towne Center leases. Annual debt services is estimated at $247,000,
“To be clear, its estimated that the acquisition doesn’t take away from things like fire and police services or things like capital needs like roadways,” he said.
Having full site control will allow the city to have a smoother redevelopment process, although Merriman cautioned that it won’t happen quickly and the process will take years. Before any ground is turned the city plans to engage the public, which indicated Towne Square redevelopment was a high priority in the city’s X-Plan, created several years ago.
“We really need to solicit the public’s input,” Merriman said. “It will be a high priority to engage the public in dialogue immediately about the future of the site and what the community’s expectations would be for that future.”
As the area is redeveloped, the city will transition ownership to the private sector and will then retire the debt with proceeds from those sales.
“We are excited about this downtown project,” Mayor Sarah Mays said. “It is not something any of us have taken lightly. We recognize it’s a really big deal, but we have faith that this a turning point for our community.”
Council President Wes Smith said Towne Square was once Xenia’s “signature shopping center” but it is “no longer the case.”
“There is an opportunity for us to make change,” he said. “The only way to make that shopping center change was to control it short term, and turn it over to private industry. I’m very excited in what could happen there because it could be a destination and just a positive place for our community and for people to hang out, to get a cup of coffee, to get something to eat.”
The city plans to create a special revenue fund — which must be approved by the state auditor — to track the activity of the Towne Square development. The fund will be used to receive lease proceeds and other revenues related to the operation of the Towne Square property and to make payments for expenses related to the Towne Square property, including but not limited to as debt payments required under the Xenia Towne Square Bond Retirement Fund; bond insurance costs; property taxes; repairs and improvements; general maintenance; utility costs; and property management fees.
Contact Scott Halasz at 937-502-4507.