'We don't have unlimited patience.' North Canton officials push Hoover development

NORTH CANTON − The city administrator is trying to give an incentive to the owners of the former Hoover plant property to break ground on redeveloping the complex this year.

Administrator Patrick DeOrio wants the owners of Maple Street Commerce by the end of this month to transfer 10 acres of land to and pay $2.5 million to North Canton City Schools. And he wants the developers to agree to a binding commitment that once reconstruction of the Hoover factory frontage into apartments, shops and restaurants begins that they will finish the work.

If that doesn't happen this month, DeOrio said he and City Council would pull a proposed 30-year, 100% property tax break for Maple Street Commerce and any subsequent negotiations would have to start over.

Related: Hoover District developers seek new tax deal with North Canton; land transfer part of deal

At DeOrio's request, council on Monday postponed until Feb. 26 action on proposed legislation that would establish the tax break for the Maple Street Commerce developers. DeOrio hopes to reach an agreement with the developers and council would amend the legislation to include language of a finalized agreement.

He is making the city agreeing to a deal contingent on one of the developers, Industry Realty Group or IRG, concluding a final agreement with North Canton City Schools that's approved by the district's board at its Feb. 21 meeting.

DeOrio told council he expects IRG to submit a proposal to the school board by Friday.

If IRG fulfills the city's requirements, then DeOrio would recommend council to approve the tax break agreement on Feb. 26. If IRG and the city can't reach an agreement, then DeOrio would recommend council table the legislation and it would effectively die.

"So I explained that procedural matter to the ownership group that they understood that this council and mayor's timetable. That we want this project moving sooner rather than later," said DeOrio.

Council member John Orr, Ward 4, asked how IRG representatives responded.

DeOrio said, "I'm trying to choose my words carefully. Tactfully. I think there's a genuine desire to have this completed. The agreements with the school system. The agreements with the city. I'm just not sure that they're completely focused on moving the paperwork along. They have their hands in a lot of things. So, I think they had to be reminded of these timetables. That we don't have unlimited patience."

Main Street Commerce hasn't finalized deal with North Canton City Schools

The timeline has already been delayed by more than a month. City officials and residents have been waiting more than 16 years for Maple Street Commerce to reconstruct the west Hoover factory on the northeast corner of North Main Street and East Maple Street. Developers Stuart Lichter and Chris Semarjian bought the former Hoover complex for about $5 million in 2007 from TTI.

On Dec. 4, Jeff Martin, a senior vice president of Industrial Commercial Properties, gave council an update on the redevelopment. Semarjian owns Industrial Commercial Properties, one of the entities involved with Maple Street Commerce.

He presented a vision of the factory becoming apartments to house 1,200 residents, shops, restaurants and perhaps even a hotel.

He said the city and school district agreeing as part of a tax increment financing agreement or TIF to the 30-year, 100% property tax break on any increased value in the west factory complex would provide them about $8 million to $10 million to help finance the project. With a TIF, North Canton and North Canton schools would not lose tax revenue. But if the value of the property increased, they would not enjoy the increase that such a rise in value would usually deliver in property tax revenue.

Currently, North Canton gets about 7% of property tax revenue in the city, DeOrio said. And North Canton City Schools gets about 70%.

Martin indicated that Maple Street Commerce was seeking a deal that was contingent on the developers obtaining $30 million in financing from lenders and investors necessary to fund the estimated $55 million project.

On Nov. 15, the school board approved a resolution that said the board would agree to the tax-break agreement if the developers fulfilled two major conditions. Maple Street Commerce by Dec. 31 would give to the school district a 10.32-acre property south of Seventh Street NE and north of Hower Street NE. The district wants the property to improve vehicle access on the south side of its athletic facilities. And the developers paid $2.5 million to the district.

However, DeOrio said Main Street Commerce never finalized that agreement. It still hasn't transferred the property to the school district as planned by the end of 2023. An expected early January vote by council on the deal never happened. And the city won't approve the tax-break agreement unless Main Street Commerce fulfills those two conditions to the school district under a finalized agreement approved by the school board by Feb. 21.

Deadline pressure removed by Ohio Department of Development

DeOrio said the Ohio Department of Development, as requested by IRG, extended state historic property tax credits for the Hoover west factory from Jan. 18 to July 31. That removed much of the time pressure on the developers.

By setting a deadline, DeOrio wants to put some of that time pressure back on them as other projects around the country occupy their attention.

"You've got to focus and prioritize on this one," he said. "We're not waiting around until you finally get to it."

He estimated that he and the developers have 95% negotiated an agreement. Several terms spell out who would be legally responsible for finishing construction should Maple Street Commerce be dissolved or go insolvent, he said.

DeOrio expressed confidence that with the Federal Reserve expected to ease interest rates this year, credit conditions would improve enough for Maple Street Commerce to obtain the more than $30 million in financing that it needs.

Mayor Stephan Wilder said, "This has been a work in progress for a long time and at some point in time a decision has (to be) made. I feel we've been working with them a long time. The agreement before them is a good one."

Reach Robert at robert.wang@cantonrep.com. X formerly Twitter: @rwangREP.

This article originally appeared on The Repository: Hoover project stalled, North Canton pushes Maple Street Commerce