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

NORTH CANTON − Plans to develop the deteriorating former west factory of the Hoover Co. plant into shops, restaurants, apartments and offices have gone unrealized for 16 years.

On Monday night, an executive for one of the project backers sought to convince City Council that developers Chris Semarjian and Stuart Lichter are determined to make a bona fide attempt to turn their vision into reality in 2024.

Jeff Martin, senior vice president for Semarjian's Industrial Commercial Properties, asked council to approve a tax increment financing (TIF) agreement with tax breaks worth $8 to $10 million that would help the project's finances work.

"It is a big ask. We realized that," he said. "But I think it'll pay it forward with the income taxes generated. ... I think it's going to move the needle to get it across the finish line finally."

Under a TIF, the developers would be able to spend 100% of the money they would have had to pay in property taxes over 30 years and instead invest it in construction costs.

Under the proposal, the city, the North Canton City School District and other governmental entities won't lose tax revenue. But they won't gain any either for 30 years if the value of the property increases.

The project is contingent on developers finding a lender or investors by the end of March. After his presentation, Martin indicated that amount is somewhere less than $30 million. He said the project will need an estimated $55 million to complete.

Once they get funding, construction would take about two and a half years, he said.

Last chance for Maple Street Commerce to develop Hoover property?

The city's administrator, Patrick DeOrio, said, "I think it's the best chance to get close to what was envisioned."

DeOrio suggested that if the project doesn't establish some momentum by next year, the developers are in danger of losing $5 million in state historic tax credits that have already been extended past a deadline this year. That doesn't include federal historic tax credits that could cover $14 million to $16 million of the cost of construction.

Meanwhile, the west factory building continues to deteriorate. And the costs of rehabilitating the structure could eventually mount to the point that demolition would be the only economically viable option.

Related: Hoover District, downtown Canton office building get state help with historic tax credits

DeOrio noted that Maple Street Commerce failed this year to fulfill the terms of a potential TIF agreement for the Diebold/Nixdorf site. It did not address code violations and it demolished vacant homes after an April deadline to do so.

But DeOrio said based on his conversations with the developers' executives, he believes they're finally devoting a focused manager on the project.

"This is the closest I think that we've gotten to kind of a catalyst going forward. For having this to be a destination city," said Mayor Stephan Wilder.

North Canton Schools would get 10 acres of land worth nearly $1M

The city administration says it wouldn't approve a TIF agreement unless the North Canton City School District, which collects about 70% of property tax revenue in the city, also signed off on the deal.

To get school officials' approval, the developers agreed to give the school district 10.32 acres of Hoover District property south of Seventh Street NE and north of Hower Street NE before Dec. 31. The land is south of the school district's baseball fields and west of the district's Memorial Stadium.

The Stark County Auditor's office has estimated the land's value at $973,100.

School system Superintendent, Jeff Wendorf, who attended Monday's meeting, said the district plans to use the property to provide better vehicle access to its athletic facilities from Howser.

If Maple Street Commerce gets the needed financing, the developers would pay $2.5 million to the school district in return for it agreeing to foregoing property taxes on any increased value for 30 years.

The North Canton City Board of Education approved an agreement with these terms on Nov. 15.

Semarjian and Lichter each hold 45% of Maple Street Commerce, the owner of the Hoover District. DeHoff Development still holds a 10% stake. Martin mentioned they plan to discuss with Dan DeHoff, DeHoff Development's CEO, if DeHoff wants to keep the stake in the long term.

New details of the Hoover property development presentation

Martin, Cleveland-based architect Michael Wellman of Meld Architects and architect Greg Soltis of RDL Architects, gave council an update of where they stand.

They depicted the future Hoover site as a:

• "Town square," and "living room for the community" that would host farmers' markets and concerts and hub with an esplanade that would draw out-of-town visitors.

• A pedestrian-friendly location with pathways, courtyards and sufficient parking as well as a plaza with public seating and light fixtures shaped like past Hoover vacuum cleaners.

• Possible site for a hotel as well as having as tenants restaurants, perhaps one with rooftop dining, coffee shops and offices on the ground floor as well as 226 apartment units on the second through fourth floors. The estimated 1,200 residents who live there would have access to an indoor fitness center and community room and developers expect they would support the businesses on the ground floor.

A final vote by council on a TIF agreement is expected Jan. 8.

Hoover property history

The Hoover west factory project has faced numerous roadblocks since Semarjian and Lichter bought the property for about $5 million in 2007 from TTI.

Financing that never materialized. An investors' lawsuit charging that funds for the Hoover project were inappropriately diverted to other projects. The parties later reached a settlement.

And orders from the U.S. Environmental Protection Agency directed Maple Street Commerce to mitigate the damage of decades of Hoover dumping chemicals at the site.

During those years, the frustration of city officials and residents grew.

A report on the results of the city's 2023 survey of the city's residents said, "While the front of the structure appears somewhat pleasing, the back is unfortunately in major disrepair. There are holes in the walls and roof, walls are missing elsewhere, and the brickwork is beginning to rapidly deteriorate."

The report said the city has issued more than $100,000 in property code violations to Maple Street Commerce for the Hoover site.

Maple Street Commerce has leased office and manufacturing space on much of the Hoover site since around 2009, generating more than roughly 1,500 jobs. Diebold-Nixdorf now conducts just about all of its North American manufacturing of ATMs at the site.

"We're very excited. "No threats. But don't let us down," said Council President Matt Stroia, At-Large said.

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

Correction: As part of an agreement with the North Canton City School District, the Hoover District developers agreed to give the school district more than 10 acres of Hoover District property south of Seventh Street NE and north of Hower Street NE. A prior version of this article misspelled Hower Street.

This article originally appeared on The Repository: Hoover District developers ask for tax-break agreement