After more than two years of what Steve Dworkin described as an “interesting and somewhat tumultuous process,” ground was officially broken Thursday on a Berkshire Township outlet-store mall.
The 350,000 square-foot outlet mall that will house more than 80 upscale brand-name and designer-outlet stores — including Polo Ralph Lauren, COACH and Cole Haan — is slated to open next June. The mall will also feature Ann Taylor; GAP; Brooks Brothers; Banana Republic; LOFT; The Children’s Place; and The North Face.
However, at several points in the process, it was unclear if the development would come to fruition.
“There were certainly days we thought this day would never come,” said Dworkin, senior vice president of development and acquisitions at Simon Premium Outlets.
The project faced a lengthy zoning process that was at times in doubt and ultimately ended after the land use change was approved by a 1-1 vote of the Berkshire Township trustees, two referendum efforts (one of which was designed to overturn the zoning change), a public spat with the Big Walnut Local School District over tax revenue, and several other stops and starts along the way.
The process also led to disputes between Berkshire Township and its neighbors in the villages of Galena and Sunbury.
“There were many times I didn’t think it was going to happen,” said Delaware County Commissioner Ken O’Brien.
Bringing the project to reality required the cooperation of several governmental entities, including Berkshire Township, Delaware County, the city of Delaware and the Ohio Department of Transportation.
Indianapolis-based Simon Property Group and Tanger Factory Outlet Centers of North Carolina plan to make $16 million worth of road improvements in time for the outlet mall’s expected opening in 2016. Delaware County will contribute $8 million toward improvements.
The outlet mall is expected to generate $19.7 million in sales tax revenue in its first 10 years in operation.
“Delaware County’s $8 million investment in infrastructure will help residents in this area and will be recouped quickly,” said Delaware County Commissioner Barb Lewis.
The most costly of the opening-day improvements will be the $5.8 million extension of Wilson Road south of U.S. 36-Ohio 37. The extended road will provide access to the mall. The improvements will also include a $2.5 million widening of the northbound exit ramp off Interstate 71 at the U.S. 36-Ohio 37 interchange. Another $791,400 will be spent to widen U.S. 36-Ohio 37 between the I-71 northbound ramps and Wilson Road.
Another $16.5 million worth of improvements are planned by 2035.
The improvements will be funded through the combination of the New Community Authority and the creation of a 10-year, 75-percent Tax Increment Financing (TIF) district – a public-financing mechanism that diverts property tax revenue from value added to developed land into a fund dedicated to infrastructure improvements in the designated area.
The TIF district was a major point of contention for Big Walnut Local School District officials. By 2028, when the Tax Increment Financing district expires, the development is expected to generate more than $1 million annually for the Big Walnut district. Until then, however, the development will bring in just $375,000 each year for the district.
The New Community Authority – which will levy a 0.5 percent tax on all sales at the outlet mall – will be used to fund most of the improvements.
The creation of the Joint Economic Development District, which was subject to a referendum in May and overwhelmingly upheld by voters, will provide some financial benefit for the city of Delaware and Berkshire Township. Officials working with the outlet mall attempted to keep the measure off the ballot, taking the issue to the Ohio Supreme Court, but those efforts were unsuccessful.
The special taxing district will allow the township to levy an income tax on those who work at the outlet mall, including during the year-long construction phase.
It is expected to generate about $200,000 for the township each year. The city, which will administer the 1.85 percent income tax, is expected to receive about $128,000 annually from the taxing district.
Despite the hurdles that stood in the way of the project, Steven B. Tanger, CEO and president of Tanger Outlets, said the location just off the Interstate 71 interchange at U.S. 36-Ohio 37 was ideal.
“We like the fact that it’s right off the interstate,” he said following the ceremony that had to be moved indoors due to inclement weather. He said its location between Cleveland and Columbus will make the mall a regional draw.
More than 400 construction jobs are expected to be created during construction. Once the outlet mall is open in 2016, more than 900 full- and part-time jobs will be created at the 57-acre site that was once a soybean field.
“What was once a bean field out there has been transformed into an engine of economic development,” said Dworkin.
The development is estimated to generate $131 million in sales in each of the first five years and $3.6 million in taxes annually for local governments, including $1.6 million in sales taxes.
Both companies involved in the joint outlet mall venture should be somewhat familiar to central Ohioans. Simon Property Group is the owner of the Mall at Tuttle Crossing. Tanger Factory Outlet Centers is the owner of the Jeffersonville outlet center.