NEWS

New owner will convert Chapel Hill Mall into a business park

Jim Mackinnon
Akron Beacon Journal
The new owner of Chapel Hill Mall plans to transform the struggling mall in Akron into a business park.

Chapel Hill Mall will be transformed into a business park by its new owner.

Industrial Commercial Properties completed its purchase of the foreclosed-upon Akron mall late Tuesday afternoon, according to the broker for the sale. The sales price was not immediately available.

More:Prior to business park development deal, Chapel Hill Mall celebrated grand opening in 1967

More:Photos: Chapel Hill Mall

ICP owner Chris Semarjian said the mall will be converted into a business park. 

The redevelopment could involve turning the 829,000-square foot mall into a multi-use campus as well as ground-up construction of new industrial buildings, Solon-based ICP said in a news release. ICP specializes in buying commercial and industrial properties and finding new uses for them. Chapel Hill Mall is the company's seventh acquisition this year.

More:Chapel Hill Mall buyer transforms buildings and land across Northeast Ohio

“We’re thrilled that Chapel Hill Mall will officially be getting repurposed to create new jobs and bring economic vitality to an area in need of investment," Akron Mayor Dan Horrigan said in a statement. "Across the nation, large indoor malls are closing or falling into disrepair, creating enormous problems for cities. Large scale buildings like malls can be a challenge to repurpose, which is why were so glad we have strong and proven partners in this endeavor. We look forward to seeing the growth and development that happens at Chapel Hill.”

"Mayor Horrigan and his economic development team have been terrific partners in supporting our efforts on this transaction," Semarjian said in a news release. "Our company has extensive experience with retail conversions and we believe Chapel Hill Mall is ideally positioned for redevelopment. Our track record includes everything from repurposing freestanding big box retail stores to converting former indoor malls and retail power centers into business parks."

ICP said its experience in Northeast Ohio includes demolishing a large part of the former Randall Park Mall in North Randall to make room for a 960,000-square-foot Amazon fulfillment center. A Sears building on the site was turned into a multi-tenant industrial building that now houses five businesses, ICP said.

More:Chapel Hill Mall store owners, shoppers hope once-popular site keeps its retail roots

The North Randall site continues to have retail development on outparcels, and ICP said it has cleared additional land to make room for a 300,000-square-foot speculative industrial building, with construction to start this spring.

"As consumers' shopping habits continue to evolve following the pandemic, we are seeing more and more retail assets repurposed so that communities can regain lost jobs and continue to drive economic development," said Bill Kern, ICP executive vice president. "The demographics, utility infrastructure and highway access surrounding large format retail projects are extremely conducive to creating distribution and logistics hubs for manufacturers."

The Chapel Hill Mall sale process involved the city of Akron transferring the property to ICP. That allows for the use of tax increment financing to help pay for improvements at the mall. Ed Matzules with the Northeast Ohio office of Colliers International Real Estate brokered the deal.

Former mall owner Mike Kohan said in February, with the sale pending, he expected to receive less than the $8.6 million he paid to buy the mall in 2016. New York-based Kohan Real Estate Investment Group specializes in buying distressed malls and other retail outlets.

Chapel Hill Mall opened in 1967 and last year entered foreclosure proceedings for nonpayment of more than $631,000 in property taxes. It also had been sued for being behind on its electric bill.

A redevelopment agreement with the city calls for ICP to spend $6 million in exterior and interior renovations and improvements on the 60-acre property within six months of the purchase. City Council members said ICP may be spending up to $20 million on the project, including purchase costs.

The mall has 20 remaining interior retail businesses, including kiosks, based on an informal survey by the Akron Beacon Journal. A handful of independent store owners inside recently said they preferred remaining in the mall but did not know the intention of the new ownership.

The city of Akron recently rezoned the mall to allow for light industrial uses there in addition to retail.

ICP is involved in other Akron-area projects, including being a partner in the purchase and repurposing of the former Goodyear campus off East Market Street and converting it into office and residential space called The East End.

ICP said its portfolio includes more than 150 properties with more than 300 tenants in five states.

Jim Mackinnon covers business. He can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ.