Cow again. In previous posts, I’ve commented on Jon Costas’s record with regard to trade unions and the city’s smoking ban. We've not heard much response from the Zoeller supporters who so gleefully tossed-around wreckless and negative accusations about Mayor Costas--maybe they all have the stomach bug that took me out for the last 4 days. Next in this series: condemnation of blighted properties, especially the north side shopping center that the city acquired in 2006.
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When I was a boy, the County Seat strip mall was the place to go. Rowdy teenagers hung out at the cinema, although when I turned 13 I decided they weren’t so bad after all. (I went back to my original position at about age 19. So call me a flip-flopper.) My mother loved the Eagle grocery store there, because it was “so much less crowded than Costas." And K-Mart, well, people still went to K-Mart.
Hard times and failure to reinvest in the property caught-up on on County Seat. Competition from Costas Supermarkets forced Eagle to go dark. (Eagle was, and still today is, the only non-locally-owned grocery store in Valparaiso, except the food section at Wal-Mart.) General Cinema, along with most of the theatre industry, filed for bankruptcy after a disastrous national expansion and went dark. Walgreen’s built a new store and turned off its lights. The three biggest anchor locations were dark, and without reinvestment they wouldn't be occupied any time soon. (K-Mart is not technically part of the County Seat property.) Then a competing strip mall opened--Valparaiso Marketplace, planned under Jon Costas’s predecessor. That was the final nail, drawing away Fashion Bug and a few other in-line merchants. The vacancy rate soared to 60%, a store burned, the parking lot began to crumble, signs were busted-out, snow wasn't plowed, and County Seat was showing all the signs of a blighted property.
In late 2002, Jon Costas’s predecessor, David Butterfield, belatedly began to press for improvements at County Seat, but his calls were not returned by the owners. Soon later, the owners were in bankruptcy. In frustration, Butterfield used the only tool left: threatening to declare the property blighted, buy it, and rebuild it.
The primary purpose of condemning the property, for both Costas and his predecessor, was to clean-up a blighted property, not to engage in economic development for private benefit.
A year before Costas was elected, the Times said as much:
“Valparaiso residents have complained for years about the County Seat Plaza blight on the city's north side. When the city decided to stop complaining and start doing something about it (condemnation), the ball began rolling.”
The public was overwhelmingly in favor. Surveys by Valparaiso University, conducted a year into Costas’s first term, showed 88% of residents supporting redevelopment of the property and making it a "high priority".
The Times editorial board came out with an early pro-Costas editorial, one of many to follow:
“Valparaiso officials are checking into the legalities of the condemnation. If it seems feasible, the city should go full speed ahead to turn this troubled shopping center around,”
Meanwhile, the center went through a couple of changes of ownership, deteriorating all along.
Ultimately, the Costas administration did not acquire County Seat through condemnation. The purchase was negotiated directly with the owners at a price almost 20% higher than the appraised value. The purchase price was $7M, or $1.3M more than the center’s appraised value. Had Valparaiso proceed with condemnation, it could have purchased the center for $5.7M (in theory). Costas compromised to avoid a long legal battle, a good trait in an Attorney General.
The city in turn put the property for sale to any buyer who could present a comprehensive redevelopment plan. The Urschel family was the only party to come forward. The Urschels are pillars of the Valparaiso community, widely-respected local industrialists who own a factory across the street making food grinders, slicers, etc. The factory has never had a lay-off and is considered an ideal employer. The Urschels are widely involved in local philanthropy but rarely get significantly involved in political affairs.
As part of the deal, the Urschels agreed to demolish the entire center and rebuild it from scratch. Most importantly, they also donated $10M for a new YMCA on the property. Coordinating a $10M donation for a local Christian organization is yet another reason Costas is such a successful mayor.
Today the northern half of the new County Seat is under construction, along with the YMCA. An area that could have created an ugly image for Valparaiso, driving down nearby property values and chasing away residents to newer areas, will instead be getting a new lease on life.
Jon Costas negotiated the purchase and redevelopment of County Seat, a blighted shopping center, without invoking eminent domain. Strong leadership in Valparaiso produced results that the entire community can be proud of.
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