An agreement between the City of Batavia and the City Centre Mall Merchants Association -- outlined by an 11-point "settlement framework" that calls for the city to retain ownership of the downtown facility's concourse, pay 100 percent of capital improvements and take care of mall maintenance and operations -- will provide the impetus for private investment in one of the city's priority areas, said City Manager Jason Molino at Monday night's City Council meeting.
"The mall is a major part of our downtown, we can't ignore that," Molino said. "This is an opportunity to facilitate and lead cooperative and successful partnerships ... and lead new development and investment in our downtown."
"For long-term investment in the mall and the 17-acre area around it, this is the best-case scenario," Molino said. "We're looking at a project with at least a $5 million value."
The settlement comes after a decade of lawsuits by both sides over responsibility for the City Centre Mall. Per its terms, all previous agreements -- which have been clouded by four rounds of litigation since the late 1970s -- will be terminated and become null and void.
Additionally, the city will:
-- Retain ownership of the concourse;
-- Complete roof, silos and skylight capital improvements (estimated at $650,000) no later than March 31, 2020;
-- Pay 100 percent of capital improvements, with future capital improvements paid by all property owners with revenue from a user fee (which would replace the current mall maintenance fee);
-- Perform mall maintenance and operations (coordinated by the Department of Public Works and Batavia Development Corp., respectively, with the latter focusing on marketing and redevelopment strategies);
-- Establish a user fee by local law based on square footage for property maintenance fee;
-- Continue to maintain budgeting and accounting;
-- Charge single-parcel owners who own more than 11,500 square feet the set user fee at 11,500 square feet;
-- Set the user fee at $2 per square foot for years one, two and three; $2.04 per square foot for year four, and $2.06 per square foot for year five. After year five, the fee will be based on the projected budget.
-- Eliminate all parking restrictions in city parking lots, with the city to restripe in 2017;
-- Turn over the fund balance as of March 31 to the Merchants, with the Merchants returning any fund balance to the city on April 1, 2022.
Molino, who along with City Attorney George Van Nest presented the plan to Council, said terms of execution of the settlement will be presented to City Council and the full membership of the Mall Merchants Association for approval later this month (at the next Council meeting on Feb. 27).
The settlement agreement must be ratified and executed by City Council, the Mall Merchants Association, parcel owners and JCPenney, and in the event that any parcel owner or JCPenney refuses to sign the agreement with 10 days of approval, both parties shall support an application to the court by motion or Order to Show Cause to gain approval of the settlement or have the agreement ordered.
"All must sign off on past agreements and sign the new agreement," Molino said. "Until then, these cases (pending litigation) are still open."
Molino said both parties have been meeting over the past 18 months, with a mediator playing a significant role in forging this settlement agreement and putting an end to suits and countersuits, claims and counter-claims over which party is responsible for maintaining the mall concourse and capital improvements, including the perennially leaky roof.
During negotiations, three other solutions were considered, Molino said. They were (1) having a private developer buy the mall; (2) having the Mall Merchants Association buy the mall concourse at fair market value, and (3) having the city lease the concourse to the merchants for fair market value.
All three were "taken off the table" as restrictions in the current agreements would render those options as not feasible from a financial standpoint, Molino said.
Pier Cipollone, president of the Batavia Development Corp. Board of Directors, said the settlement "opens up future discussions" by removing the prior agreement and its restrictions -- and "paves the way to bring developers in and gain ideas as to what they would want to do with the mall."
He said he would like to see retail, such as boutique stores, T-shirt shops ... anything where somebody could come in and buy something and walk out the door. What we have now is a mix of retail and medical, and the mall was never designed for the medical world. We need foot traffic downtown."
