Towne Mall purchase approved; Middletown council rejects housing development

Aug. 17—One project that has been discussed for two years was approved, while another proposal that created tension at several Middletown City Council meetings was rejected Tuesday night.

The five City Council members unanimously approved the $1 million for a purchase agreement of the Towne Mall Galleria site.

The purchase includes the portion of the mall site that is commonly known as the former Sears, Elder-Beerman, and the main center section of the mall, according to the city. It does not include the section where the Burlington/Gabe's stores are located.

The funds approved in this legislation will be for the two earnest money deposits ($500,000 each) as indicated in the agreement. City Council will need to approve the remaining $15 million of the purchase prior to the closing expected to be in June 2023.

These funds will come out of the General Fund with a long-term plan of reimbursing the fund through TIF debt proceeds at a later date as the development of the project come to fruition, City Manager Paul Lolli said.

Mayor Nicole Condrey said the agreement is the "next evolution of the project" and called the support from Warren County leaders "incredibly strong."

Council member Rodney Muterspaw said neighboring communities along I-75 have "passed us by" with their retail and entertainment development.

"This is huge," he said.

The city and Warren County have been working extensively on a new redevelopment plan for the former mall site that leaders have said will reinvigorate the I-75 and Ohio 122 commercial area.

Lolli has said the redevelopment of the Towne Mall could be "one of the best things to happen to Middletown in a long, long time."

Eventually, he said, after the project is complete the entire East End region will "bloom and blossom."

Under the terms of the agreement, the city is afforded an initial due diligence period of 90 days before any deposited earnest monies become non-refundable. During this period, the city will perform various inspections at the site and examine all title paperwork and documentation concerning land rights, leases, according to city documents.

Tal Moon, the most veteran City Council member, said discussions about purchasing the Towne Mall began when Susan Cohen was acting city manager and continued under then-City Manager Jim Palenick and now Lolli.

Moon thanked past and current city staff and council members for working extensively on the project and said Lolli and Assistant City Manager Nathan Cahill pushed the project "over the finish line."

He called the purchase agreement a "significant step" in the redevelopment of the mall.

The city plans to convert the mall property into a sports and entertainment complex with retail, hotels, bars and restaurants and residential uses, officials have said.

It's unclear the future of the proposal to bring indoor go-kart racing to the mall. In October 2021, the owners of the Towne Mall Galleria signed a contract with a major electric go-kart company to bring indoor racing to the complex.

K1 Speed indoor go-kart racing has 55 locations worldwide and George Ragheb, the California-based investor who owns the mall, signed a 40-mile exclusive contract, Palenick said at the time.

In January, Warren County commissioners approved about $73,000 in American Rescue Plan Act funding toward a feasibility and marketing study to determine the size and scope of the project, said Martin Russell, deputy county administrator and executive director of the Warren County Port Authority.

Lolli has said the Towne Mall project is only the beginning of a "fantastic relationship" with Warren County.

Development of former hospital site rejected

After hearing from residents who again voiced their concerns about 44 single-family homes being built on the 16-acre former Middletown Regional Hospital site, council voted down the legislation 3-1 with Vice Mayor Monica Nenni casting the only yes vote.

Moon, who is affiliated with Oaks Community Church, which purchased the land for $500,000 from the hospital, abstained as he has throughout the process.

The residents, like they have expressed several times, said the size of the homes doesn't fit with the nearby Highland Historic District.

Rob Smith, who represents D.R. Horton, the proposed developer, attended the council meeting, but didn't speak. After the vote was taken, he quickly left City Council Chambers.

Nenni appeared to be frustrated by the vote. She said the developer and the property owner made several concessions, changing the plans from 52 homes to 44 and enlarging the lot sizes. She wanted to know if council rejected this plan, what plan would the members approve.

Muterspaw said "this is not the right thing" for that property.

"What is the right thing for this site?" Nenni asked.

Muterspaw said he talked to Middletown residents and 90% of them were against the project.