$60M Cuyahoga Falls retail project on hold!

Cleveland Plain Dealer -- CUYAHOHA FALLS, Ohio -- Plans for a $60 million retail development in Cuyahoga Falls have stalled after the school board rejected an agreement related to the project's financing.

Only two of the board's five members voted Monday night to support a compensation agreement with Cuyahoga Falls, which has been assembling a complicated redevelopment deal for the former State Road Shopping Center site. The 25-acre property, at State Road and Portage Trail, is slated to become Portage Crossing, a retail project developed by Stark Enterprises of Cleveland.

Now the school board's decision has put the project "on hold indefinitely," developer Bob Stark wrote in an e-mailed statement this afternoon.

"Without the public funds, the project cannot move forward," Stark wrote, adding that his company already has spent hundreds of thousands of dollars on an expedited planning process. Stark Enterprises hoped to open Portage Crossing in fall 2011 and had been negotiating with retailers about the size and the scope of the development.

"We were shell-shocked at the vote," said Susan Truby, development director for Cuyahoga Falls. "It's just amazing that a school board that has not one penny invested in the project can actually vote to hold it up, when many of those board members actually live in [neighboring] Silver Lake."

The board was voting on an agreement that would support a tax-increment financing deal, or TIF, between Stark and the city. Under the TIF, Stark would pay property taxes only on the value of the undeveloped land for 30 years. At the same time, Stark would set aside money equal to what the property taxes on the improvements -- parking spaces, buildings, stores -- would have been.

That money would be split between the Cuyahoga Falls City School District and the city. Cuyahoga Falls would receive the lion's share, an estimated $675,000 a year once the project is built, to repay $11 million that the city borrowed to acquire the shopping center property and $5 million the city plans to spend on infrastructure work on the site.