EDITORIAL: Shenango Mall saga nearing the end of its courtroom odyssey

Aug. 25—SHENANGO Valley Mall, once the jewel of Hermitage at the crossroads of route 18 and State street, has become an eyesore.

Without two of its three anchor stores, the mall's biggest occupant is empty space and there are no realistic prospects to fill it. Attorney William McConnell, representing the mall's former owners, said in open court that the former Macy's store location was plagued with mold.

That was in 2018, nearly five years ago.

It's unlikely that conditions have improved since.

To their credit, Hermitage city officials have plans to move on beyond the mall.

The city's Hermitage 2030 Comprehensive Plan calls for converting the mall property into the Town Center's main element, with a mixed-use walkable development of retail, restaurants, amusements and residences, and a network of trails to connect it with the rest of Hermitage.

The city, led by Manager Gary Hinkson and Assistant Manager Gary Gulla, aggressively and successfully pursued grants totaling $5.5 million that would allow Hermitage to partner with private developers to make this happen.

A private developer, Flicore LLC and its affiliate Butterfli Holdings LLC, is on board and awaiting word to go.

The remaining piece now is a lawsuit — which now may be entering its final stages — by JCPenney, the mall's last remaining anchor tenant.

The retail chain has filed a lawsuit claiming that Flicore is bound by a 56-year-old clause in a contract with the mall's original ownership. That clause, part of a 1967 lease, gave JCPenney the right to approve any development at the mall.

JCPenney's representatives claim the clause still applies. Mercer County Court of Common Pleas and state Superior Court disagreed. Both courts ruled against JCPenney.

Herald reporter David Dye reported Wednesday that the retailer filed an appeal July 20 with the state Supreme Court.

The same day, Hermitage City Commissioner Michael Muha posted Dye's article from his Facebook page, with the statement, "JC Penneys (sic) is singlehandedly preventing the Shenango Valley Mall property from being redeveloped. Millions of dollars being pumped into our local economy are at risk."

Muha said in an interview that state officials understand the city can't use most of the grant funds because JCPenney has the centerpiece project tied up in litigation, but "the grants don't live on forever."

The COVID pandemic and JCPenney's bankruptcy action from 2020 into 2022 delayed that litigation, which, in turn, has delayed rebirth of the Shenango Valley Mall site, he said.

Muha, an attorney, said the Town Center project wheels had begun turning even before COVID, and that, absent the lawsuit, there would already be new development on the Shenango Valley Mall site.

JCPenney's press office did not respond to an email seeking comment on the litigation.

But a filing Tuesday in Mercer County Common Pleas Court indicates one reason why JCPenney might be fighting the development.

The developer filed an ejectment action against JCPenney, which would end the retailer's lease at the mall within 30 days.

In the order, Butterfli claims that a 2003 lease ended the provision that gave JCPenney right to approve changes to the mall, and made the department store an at-will tenant of the mall, subject to eviction after sufficient notice, and that management .

In 2019, The Herald's Michael Roknick quoted a JCPenney regional manager who said the Shenango Valley Mall store is one of the department store chain's top performers, which may go a long way in explaining why JCPenney is trying to keep its place in the mall.

This week's filing is, of course, subject to the state Supreme Court ruling on JCPenney's appeal and the ejectment action doesn't mean conclusively that JCPenney is not part of the Town Center plan, although it may be an indicator in that direction.

Ultimately, though, Hermitage needs to eliminate the eyesore at its crossroads and the city needs to move on.

Muha said the mall's continually deteriorating condition has been the single most-raised complaint from Hermitage residents since he first took office as commissioner in 2018.

"They ask me, 'Why don't we have a Target? Why do we have to go to Niles to buy clothes? People want to shop in the Shenango Valley," he said. "This is an opportunity to completely reinvigorate the local economy."