Plans for a movie theater inside the former Kmart building in Xenia Towne Square have unraveled, but efforts to redevelop that area of the shopping center have not been abandoned, according to the city.
The city plans to buy the former building and parking lot area, which stretches across 5.6 acres of land, for an estimated $250,000 and enter into a purchase agreement to sell the building to a developer.
“We’re trying to get site control to facilitate an opportunity to look at broader redevelopment,” said Xenia City Manager Brent Merriman. “We know that by consolidating the site control, we are expediting the process.”
The planned movie theater was part of a $20 million to $22 million Xenia Towne Square redevelopment project that included retail space and restaurants. The project was also linked to a $7 million entertainment center, in the former Fulmers grocery store, that will include a 14-lane bowling alley, a laser tag course, an arcade, a party/banquet area and a sports bar.
Now, city staff has had preliminary discussions with interested developers and is exploring costs to demolish the building, according to city documents.
“We understand there’s some risk in this,” Merriman said. “There’s a certain degree of speculation, but we also know from the conversations that we’ve had with developers that the site holds valuable redevelopment potential.”
Once the city owns the site, it will submit requests for proposals from developers, before selecting one to enter into a purchase agreement.
“It’s a good thing because there’s really now no middle man involved,” said Lee Warren, a City of Xenia spokesman. “That takes out some of the complexities of being able to do development. With the RFP (request for proposal) process, new developers come into the mix and show their ideas for what they would do for a long term and sustainable project for everyone involved.”
The plans come seven months after the city council approved a resolution to sell the parcel of land where the former Kmart building is located to Genesis Development for $1.
The city agreed to sell the land to Genesis for a low price on the conditions that it obtain a title commitment; perform a survey, physical and environmental inspections as needed; reach a tax increment financing agreement with the city; acquire leasehold interest from the building owner; enter into a third party agreement for development of a movie theater; and provide financial proof that it would be able to complete the redevelopment project.
The terms of the agreement with the city were not met, so it was never finalized.
Genesis planned to work with Starmax Entertainment Group, a Creative Entertainment Concepts LLC affiliated company, who would run the theater, however the entertainment group “withdrew its interest in building a movie theater” this summer and Genesis’ option agreement with the building owner expired.
“The movie theater as it was initially envisioned is not going anywhere,” said Xenia City Council President Michael Engle. “Without a solid investment base, one can’t move forward with that retail oriented development.”
In addition to plans for the movie theater coming to a halt, construction on the entertainment center slowed. In September, the entertainment center developer David Beauregard, of Creative Entertainment Concepts LLC, said construction is expected to resume in December and finish within four months. He said the ethics investigation related to Xenia City Councilmen John Caupp and Dale Louderback stalled construction on the project.
Caupp and Louderback told fellow council members, in February, they accepted jobs with the entertainment center developer and planned to invest in the project.
The city launched an investigation to determine whether Caupp and Louderback’s actions violated the city charter. A three-day ethics hearing ended in September with a 5-0 city council vote determining Caupp and Louderback violated the city charter. The punishment was a public reprimand.
The councilmen’s actions were also reported to state agencies that are investigating whether ethics violations occurred.
Caupp and Louderback ran for reelection this month. Caupp lost his bid; Louderback was reelected.
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