Newspaper Record of XXXXX/JACOBS in Avon,
Ohio -- August 1, 1999 to 8-31-99

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8-3-99More on Charter Amendment to Avoid Petition Process
8-5-99Editorial on Charter Amendment to Avoid Petition Process
8-10-99Avon Commons Subdivider's Agreement Ordinance Approved
8-10-99Charter Amendment to Avoid Petition Process Dead
8-17-99JACOBS WANTS TO SELL OUT
8-19-99Jacobs still wants Vista
8-20-99Avon Candidates
8-21-99A Vista Spin

EDITORIAL from THE CHRONICLE-TELEGRAM, 8-2-99

"... Raspberries to attorney Timothy J. Grendell for wretched and ironic exaggeration. Grendell, who is representing Akron developer Jerry Bishop in the never - ending dispute over Lorain's King's Woods, contends the city is damaging his client by insisting on 70-foot lots instead of 50-foot lots [compare with Avon's minimum lot size], even though Bishop agreed to 70-foot lots at a City Council meeting.

''Mr. Bishop cannot sit on his investment while the city rapes him,'' Grendell said. [How would this lawyer represent a developer to the City of Avon?]

After it was renegotiated earlier this year, the price Bishop paid for the 75 acres was reduced from $750,000 to $337,500. He might not be able to build the 270 houses he planned originally, but he'll have ample opportunity to recover his investment. This is rape?"

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NEWS ARTICLE from THE CHRONICLE-TELEGRAM, 8-3-99, By Joe Mosbrook Jr.

[More on Charter Amendment to Avoid Petition Process]

"AVON -- ... Knowing that Cleveland Indians owner and developer Richard Jacobs plans to build a complex more than five times the size of Avon Commons, some Council members want to be left out of the loop, leaving thorny decisions to voters ... Jacobs might soon act on his own proposal -- a 500-acre commercial ... development ...

It is sure to bring even more controversy, city officials predict. And to compound the issue, the Jacobs Group proposes to build a $15 million highway interchange [with how much coming from the taxpayers?] on Lear-Nagle Road to accommodate the project.

But allowing those plans to move forward are decisions too large for Council to decide on its own, said Council President Ted Graczyk Jr.

During a work session of Council Monday, he urged for a charter amendment that would give Council the option to put such issues to a city-wide vote ...

Next Monday, Council will vote whether to send the charter amendment to the polls in November for final approval. If voters accept the change, Council would need a three-fourths vote to put future issues on the ballot.

A previous charter amendment proposal called for a two-thirds vote from Council. But on Monday, Council decided to increase it to three-fourths on so the option would be used sparingly, said at-large Councilman Shaun Brady ...

Council members Jack Kilroy, Ward 4, and David Kaiser, Ward 2, oppose the plan.

"I think we WERE elected to think for the voters,'' Kaiser said ...

Kilroy argued that if voters strongly object to any act of Council they can overturn the measure through a referendum."

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EDITORIAL from THE MORNING JOURNAL, 8-5-99

"Avon elected them to hold 'hot potatoes'

Avon Council members Ted Graczyk and Shaun Brady ... are promoting a new ordinance that would ask voters to decide all the important, 'hot potato' issues of city government.

We think the proposal is misguided, impractical and irresponsible. As Harry S Truman said, if they can't stand the heat, they should get out of the kitchen.

There are two points of view about the role of legislators in a Democracy. One is that they are simply mouthpieces for their constituents, expected to go back to those who elected them to ask how to vote on every issue.

We subscribe to the other view, that the people elect qualified leaders from their midst and delegate to them the responsibility for making informed decisions on policies and processes.

If those choices, over time, seem consistently wrong, then voters can replace those elected officials with new ones. But an assumption must be made that gives incumbents the benefit of the doubt because they know all the details and are more informed than the average citizen.

Council members are certainly supposed to listen to the masses, including public opinion as part of the mix on the way to decisions, but they are ultimately responsible for saying 'yes' or 'no.' They have to weigh fact and opinion, see the long-range implications and decide what is best, not just what is popular.

The Avon ordinance is impractical. Projects would be delayed unnecessarily to await primary, general or special election dates. And the proposal is irresponsible. It would allow council members to avoid the work they were elected to do. Their candidacies implied a promise to spend the extra time reading and questioning and listening to all sides of the issues before city government, not to step back and 'let the people decide.' ...

'I was elected to represent the people on a weekly basis,' said Graczyk. 'I wasn't elected to think for them.' No, he was elected to think for himself and do the right thing ...

Council members are elected to make educated choices. The choice in this case should be to drop this 'hot potato' idea."

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NEWS ARTICLE from THE MORNING JOURNAL, By SARAH FENSKE, 8-10-99, Morning Journal Writer

"Avon Commons OK almost final

AVON -- Avon Commons is left with one final step in its approval process by city officials after Council voted unanimously to approve the project's subdivider's agreement last night [8-9-99].

The subdivider's agreement covers areas of the project that intersect directly with the city: traffic innovations, utilities and road improvements.

The vote was Council's first on First Interstate Development's 85-acre shopping center, despite the two years of political controversy regarding its creation.

In June of 1998, Planning Commission gave the project its final approval, and it was slated for Council's agenda when the court [Thomas Janas] stepped in, announcing the property would have to be rezoned.

Three weeks ago, after hundreds of thousands of dollars and two city-wide votes, Planning Commission again approved the project's preliminary and final plats, clearing the way once again for Council's consideration.

After last night's vote, Avon Commons' only remaining legislative hurdle is site plan approval, which covers particulars of store arrangement and project aesthetics, and needs only to be approved by the Planning Commission.

While First Interstate chose to get site approval simultaneously with plat approval in 1998, this time the company plans to finalize details with tenants before bringing in any site plans, city officials said ...

Council gave its approval to another retail project at last night's meeting, giving a go-ahead to the developer's agreement for a new Dairy Mart. The Hudson-based convenience chain plans to open a store on the southeast corner of SR 83 and Chester Road."

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NEWS ARTICLE from THE CHRONICLE-TELEGRAM, 8-10-99, By Joe Mosbrook Jr.

"AVON -- A proposed charter amendment to allow City Council to hand off controversial issues to voters -- such as larger commercial developments -- is dead.

A technicality killed the issue Monday when Council could not muster enough votes to pass it under an emergency measure. Council needed to pass it on its first vote in order to meet the required 60-day waiting period for it to be placed on the November ballot.

Passing the measure on a first vote requires six of the seven votes.

One Council member, David Kaiser, voted no, while another, Michael McDonough, was absent, causing approval to fall one vote short.

Council President Ted Graczyk Jr., who sponsored the legislation, said he was disappointed by the outcome ...

Graczyk said he wanted the option of sending "big'' issues to voters in case developer and Cleveland Indian's owner Richard Jacobs acts on his proposed 500-acre, commercial and residential development in Avon ...

Another proposed charter amendment, which would have extended the time period citizens have to force a referendum, also died by the same technicality.

Had it passed, voters would have decided whether referendum petitions could be filed 60 days after an act of Council. Now, petitions must be filed with the clerk of Council within 30 days.

Voters will get to decide on one charter amendement in November. If passed, it would require Council to appoint and seat the Charter Review Commission by the third week of each February.

Once the commission is appointed it will have 150 days to make recommendations for change, the proposal states. The current language in the charter is vague about due dates for recommendations, Graczyk said.

In other business, Council approved the subdivider's agreement for Avon Commons. It was the only act of Council needed for the 85-acre, $60 million development on Detroit Road ..."

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NEWS ARTICLE from THE MORNING JOURNAL, BY MJ Staff and Wire Reports, 8-17-99

"Jacobs selling empire, including Midway Mall

WESTLAKE -- Midway Mall in Elyria will be up for sale, the 500-acre Vista project in Avon faces an uncertain future and a lot of people in Westlake will be looking for new jobs.

That's the local fallout from the announcement yesterday [8-16-99] by Cleveland Indians owner Dick Jacobs that he plans to sell his empire of shopping malls, office buildings, corporate office parks and hotels, estimated to be worth billions.

Jacobs, a commercial real estate mogul and owner of the privately-held Richard E. Jacobs Group, said he has assigned The Goldman Sachs Group to find new owners for his holdings.

In detail, the Jacobs' announcement generates a local impact on the following:

Goldman Sachs has been charged with not only finding buyers for Jacobs' properties, but the firm will also offer solutions for the future of unfinished projects, company officials said. Goldman Sachs is the same firm that is looking for a prospective owner for the Cleveland Indians ...

In a prepared statement released yesterday morning, Jacobs said the decision was difficult, especially in light of the people who have contributed to the growth and success of his organization.

'Given the need for sound estate planning, however, I have reached the conclusion that the best way to maximize the value of our holdings is to market the portfolio as the economics and timing make sense,' Jacobs said.

The process should take some time, said Martin Cleary, a Jacobs Group spokesman, who estimated the sale to close within the next six to 12 months. [Martin J. Cleary, 64, is the President and Chief Operating Officer of the Richard E. Jacobs Group]

The Richard E. Jacobs Group employs about 275 people at its Westlake headquarters.

Cleary said the future of the headquarters building is unknown at this time, and the number of job losses has not yet been determined.

'It will be a substantial number of people,' he said ...

The Jacobs Group is the sole developer of Vista, a multi-use, master-planned development in Avon, whose development at the present time remains on hold. The project's future at this time is not certain, Clearly said ...

The exact worth of Jacobs' holdings was not available yesterday, however his empire includes 38 malls, six office buildings, two corporate office parks and 19 hotels ...

As a whole, Jacobs Group malls currently occupy more than 41 million square feet in 32 retail markets in 15 states, according to company figures. Jacobs is the largest private shopping center owner in the country and the fifth largest shopping center owner overall in the United States.

Local properties include Midway Mall, Westgate Mall in Fairview Park and SouthPark Center in Strongsville. Jacobs also owns the 57-story Key Center in downtown Cleveland, as well as The Galleria and Tower at Erieview and McDonald Investment Center.

The company also owns the 402-room Cleveland Marriott Key Center hotel in downtown Cleveland, as well as a resort hotel and 17 limited-service hotels located around the country."

Tuesday, August 17, 1999

NEWS ARTICLE from THE PLAIN DEALER, 8-17-99, By BILL LUBINGER, PLAIN DEALER REPORTER

"Three months after stunning Cleveland Indians fans by putting the team up for sale, developer Richard E. Jacobs launched another zinger yesterday: He's putting his real estate empire on the block, giving "sound estate planning" as the reason.

Jacobs, 74, founder of the Westlake-based Richard E. Jacobs Group, has hired the New York investment banking firm Goldman Sachs Group Inc. to gauge interest for the 38 shopping malls in 15 states, six office buildings, 19 hotels and two office parks it took 44 years to amass ...

Locally, the privately owned firm's assets include such downtown landmarks as the 57-story Key Center and the Galleria at Erieview shopping mall, as well as such popular suburban hangouts as Westgate Mall in Fairview Park, Midway Mall in Elyria, Belden Village Mall in Canton and SouthPark Center mall in Strongsville.

The Jacobs Group is also lead developer in the roughly 600-acre Chagrin Highlands corporate office park on land owned by the city of Cleveland in the eastern Cuyahoga County suburbs along Interstate 271 ...

When Jacobs announced that the Indians were for sale and was asked whether his real estate firm might be next, he insisted that would not be the case ...

Most of the 275 employees at the Westlake headquarters will lose their jobs as properties are sold off, Cleary said ...

While yesterday's move was unexpected, Jacobs unsuccessfully tried to cash in on his real estate holdings twice in the last five years, by selling his company's stock to the public, as he did with the Indians last summer, raising $60 million.

In late 1994, Jacobs canceled a planned initial public offering when interest rates soared and the real estate IPO pipeline became clogged with competition.

Two years ago, Jacobs tried to pull off a three-way merger with two East Coast developers that would have created the nation's second-largest mall firm.

That plan was foiled when Jacobs' largest competitor, the Simon Property Group of Indianapolis, outbid him for the prize, wrecking the pact. A $200 million lawsuit Jacobs Group filed against Simon over that deal is pending.

Resigned to go forth as a private company, Jacobs hired a new president in late 1997, only to fire him nine months later. And five months ago, in what was described then as a move to set up a clear line of succession, Jacobs promoted two longtime executives to one day direct the company ...

Potential buyers include publicity traded real estate investment trusts and private investment groups, as well as such institutional buyers as pension funds and insurance companies ... [Who wants to be stuck with obsolete enclosed malls soon to be emptied by Internet competition?] ..."

NEWS ARTICLE from THE CHRONICLE-TELEGRAM, 8-17-99, By Joe Mosbrook Jr.

"CLEVELAND -- Midway Mall, 37 other shopping malls and 19 hotels, all owned by Cleveland Indians owner Richard Jacobs, are for sale ...

In Lorain County, the Jacobs Group owns the 1.2 million square-foot Midway Mall in Elyria. With 121 specialty shops, the center has four anchor stores in addition to stand-alone superstores such as Best Buy, which was added to the mall complex design.

Jacobs built Midway Mall in 1966, after city officials in Lorain and Sheffield declined to help him bring the development to those communities.

Today, Jacobs is finishing construction of a second local shopping center, while a third has been proposed for Avon to be built over the next decade.

Midway Market Square, a center just south of Midway Mall on West River Road, is nearing completion. A Home Depot store already is open there and a Target store, a Dick's Sporting Goods store and a Giant Eagle grocery are scheduled to open this fall.

Vista, a 500-acre commercial, residential and industrial development has been proposed for development north and south of Interstate 90 and Lear-Nagle Road in Avon. Jacobs also proposed building a $15 million highway interchange for the project.

The Vista project is in a preliminary planning stage.

A Jacobs Group official declined to speculate Monday whether the Vista project would go forward in light of Jacobs' announcement.

"I'm not prepared to give a statement at this time,'' said Thomas Henneberry, executive vice president."

NEWS ARTICLE from The Akron Beacon Journal, 8-17-99, BY MARY ETHRIDGE, Beacon Journal business writer

"Richard E. Jacobs, who started his career selling houses in Akron, is selling the multibillion-dollar real estate empire that took him decades to build ...

Malachy Kavanagh of the International Council of Shopping Centers said the Jacobs Group is the only remaining privately held company out of the nation's top 10 mall owners and developers. It ranks fifth while Simon -- which grew out of the Youngstown-based DeBartolo Corp. -- is No. 1.

Kavanagh said it became clear several years ago that privately held mall developers were a dying breed. The need for capital to keep a mall chain alive in these heady days of retail expansion is so huge and relentless, only companies supported by public infusions can grow, he said ...

``It's a good time to sell if you're going to sell,'' Kavanagh said. ``The malls are doing exceptionally well.''

Robert Barker, vice president of development for Indianapolis based Simon, agreed ...

Barker said Simon will take a look at buying some of the Jacobs properties, but with no more interest than any other ``major player,'' he said ..."

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NEWS ARTICLE from THE PLAIN DEALER, 8-19-99, By BILL LUBINGER, PLAIN DEALER REPORTER

"Developer Richard E. Jacobs ... won't be selling ... a proposed 500-acre retail project in Avon ...

Vista ... hinges on a ... $15 million interchange on Interstate 90 and a public vote for a zoning change."

NEWS ARTICLE from The Associated Press, 8-19-99

"Jacobs says Columbus malls not for sale

COLUMBUS, Ohio (AP) -- Mall owner Richard Jacobs says he's bewildered by those who thought his three Columbus malls were part of the plan he announced this week to sell most of his 38 malls and 19 hotels ...

Jacobs said he never intended to sell the local malls and remained committed to upgrading Northland if he can stop a new mall planned a few miles away at Polaris Centers of Commerce.

Jacobs said the malls aren't in good enough shape to be sold anyway.

"They're not for sale because they're not salable," he said.

Jacobs has waged a public battle against the developers of the proposed Polaris Fashion Place mall that he says would kill Northland by drawing away its anchor stores. Jacobs' allies collected enough signatures on petitions to force the issue onto the November ballot ...

One mall analyst questioned whether the news conference helped Jacobs restore his credibility with Northland supporters who believed the mall was going to be sold.

"He looks bad in Columbus now," Richard Moore of McDonald Investments in Cleveland told The Columbus Dispatch for a story today. "I don't know that this makes him look better. He is clearly exiting the business."

Analyst John Roberts of Hilliard Lyons in Louisville, Ky., said keeping the local malls probably isn't viable if Columbus developer Herbert Glimcher moves forward with his Polaris mall.

"He's doing this to spite Herb," Roberts said.

Annie Hall, lobbyist for Bank One, the largest employer at the 1,125-acre park, said it is hard to believe Jacobs.

"We think that the malls were on the block two days ago and were not on the block a day ago and probably will be on the block as soon as Mr. Jacobs finds a buyer," she said.

"To put it succinctly, we do not think you can take Mr. Jacobs' word to the bank.""

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NEWS ARTICLE from THE MORNING JOURNAL, By SARAH FENSKE, 8-20-99, Morning Journal Writer

"Avon's Graczyk won't run again

AVON -- Council President Ted Graczyk decided not to seek re-election in November ... but former mayor Tom Wearsch said he is ready to be council president again ...

Graczyk has served three two-year terms as an at-large City Council member, including time as council president after Ed Krystowski's resignation in May 1998 ...

The only other current member of City Council not seeking re-election is at-large member Mike McDonough.

The departure of McDonough and Graczyk leaves four residents running for three at-large seats. The at-large member with the highest number of votes automatically becomes council president, according to the city's charter.

Those vying for the at-large seats are incumbent Councilman at-large Shaun Brady, president of Brady Homes; Jo Anne Easterday, who had covered local politics for several years for a community newspaper until she resigned recently; and two political veterans, David Mast and Wearsch.

Mast, an attorney, chaired the city's most recent charter review panel and currently serves on the Parks and Recreation Committee ...

Wearsch, a former postal carrier and lifelong Avon resident, is a member of the city's planning commission. He served as council president for four years before his tenure as mayor, from 1980 to 1986.

Wearsch said he is prepared to be a member of City Council again and possibly council president, citing his consensus-building ability.

'From the positions I've held, I have good knowledge of where we were, where we are and where we want to head,' Wearsch said. 'I understand the issues.'

Mrs. Easterday, a resident for nine years, said that her time observing council has given her similar understanding ...

Incumbents Niels Jensen, David Kaiser, Jack Kilroy and Shirley Piazza Doss will all seek re-election for ward council seats. The only one facing a challenger is Mrs. Doss in Ward 3.

Timothy Nickum, a 28-year Avon resident and currently a member of the city's Zoning Board of Appeals, said he is challenging Mrs. Doss as 'new blood and a fresh face.'

'I feel the turmoil we've had needs to come to an end,' Nickum said, citing his work as a businessman. 'With my background, I can bring stability to City Council.'

Nickum praised Mrs. Doss, but said, 'I think there needs to be a change. Everyone I've talked to so far has said it's long overdue."

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NEWS ARTICLE from THE MORNING JOURNAL, By SARAH FENSKE, 8-21-99, Morning Journal Writer

"Vista isn't up for sale

AVON -- The Jacobs Group does not plan to sell its 500-acre Vista project in Avon, company officials. As proof, they said, a traffic study to facilitate the project's development is now under way ...

'We are evaluating the disposition of our assets,' said Thomas Henneberry, executive vice president of the Jacobs Group. 'Some will be sold, and several will be retained. All the development projects will be retained.'

The company intends to come before the Avon's Planning Commission in September, Henneberry said.

'We have engaged a traffic consultant and started that work,' Henneberry said. 'We'll be sharing with them what traffic study information we have at that point.'

The traffic study, part of Jacobs' proposal to partially pay for an I-90 interchange at Nagel Road, is still the company's starting point for the proposed 500-acre planned unit development, Henneberry said.

The company hopes to put shopping, entertainment and hotels on 222 acres north of I-90, with office complexes, buffered by residential developments, to the south.

Jacobs Group officials have said THEY CAN DO THE PROJECT WITH OR WITHOUT THE NEW INTERCHANGE, [when did they say this?] but stress that the interchange is becoming increasingly necessary, and getting it with their funding will be in the city's best interest. [In the City's best interest? -- nice spin]

Planning Commission Chairman Jim Piazza said the commission would look at the study.

The announcement that the Jacobs Group is selling numerous developments had Avon Mayor Jim Smith unsure of where the proposed Avon project fits. He said Jacobs' hold on the property may not be permanent, suggesting the company might increase the property's value by obtaining a zoning change, and then selling.

'That leaves the people of Avon and the planning commission in quite a bit of a quandary,' he said. 'There's a lot of question marks here that weren't here before.' ...

The matter may be out of the planning commission's hands, anyway, Smith said ... 'It's up to the people,' ... [But doesn't Jacobs still want the Planning Commission, or the Council, or the Mayor to request an intercahnge study from NOACA? Why doesn't Jacobs present an initiative petition by the voters to request the interchange study?]

Smith and Piazza said they have not heard from Jacobs officials since the news of Jacobs' intention to sell his vast holdings."

NEWS ARTICLE from The PRESS, By Kim T. Dudek, The Press, 8-25-99

"Vista still a go; Avon official leery

Avon Mayor Jim Smith remains leery this week, despite the fact that Jacobs Group Vice-President Thomas Henneberry told The PRESS on Friday that the group is continuing with efforts to develop 500 acres of land in Avon.

The Jacobs Group had announced on Aug. 16 that it had hired The Goldman Sachs Group, Inc., to "explore the potential disposition of the majority of its assets."

Friday, as questions continued to arise regarding the future of Vista, the multi-use master-planned development in Avon, Henneberry said that the group is still committed to the project. In fact, he said, he hoped to address Avon Planning Commission with traffic study results in September [1999] ...

Henneberry said that a traffic consultant had been hired and a traffic study was underway, in an effort to have a presentation ready by the September planning commission meeting. In July, Henneberry said he planned to address planning commission in August.

While Henneberry stressed the fact that Jacobs did not intend to back out of the Vista project, Smith questions what the future of Vista might actually be.

"They (Jacobs) said they are going to 'enhance the value of remaining properties.' I honestly don't know where we stand, but when you enhance the value of property, that usually means you're going to sell it. It is going to be for sale at some time or another," Smith said.

Vista plans called for putting shopping, entertainment and hotels on 222 acres north of I-90, with office complexes and residential development to the south of the freeway. Part of the traffic study would hopefully support the need for, and Jacob's desire for, a new interchange on Lear Road.

Smith said that when the Jacobs Group originally talked to him about the possibility of developing in Avon, he met with Chairman and CEO Richard E. Jacobs personally, and was assured by Jacobs that the corporation would have a presence in Avon forever.

"How long is forever?" Smith said. "When all of a sudden Mr. Jacobs says that he's getting rid of the majority of his properties, the ones he can make the most money on, and keeping the others for enhanced value, that tells me that once it's zoned, it's going to sell.

"There are a lot of important questions that need to be answered about a very, very big development which could affect Avon, Avon Lake and our other neighbors. And I think they are legitimate questions. Who's going to own this?" Smith said.

Once Jacob's plans have been approved and the necessary zoning changes have been made, the developer or whomever he would sell the re-zoned land to, could actually build any kind of structure they want.

"When they come to you after the zoning changes have been made, and claim they have to change their plans because of monetary constraints or being a 'market-driven organization', then you know what's coming," Smith said. "This is a 15-year project. If they sell it in the first year of development, you don't know what kind of direction it might take." ..."

Newspaper Record of XXXXX/Jacobs in Avon

More Documents Relating to the June 8, 1998, Decision Against Avon

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