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$2.00/AUGUST 27 - SEPTEMBER 2, 2012
VOL. 33, NO. 33
“I’m really excited about the future. If you stick around long enough in this industry, it will turn.” – Rick Puzzitiello (left), CEO, Parkview Homes
Cincinnati firm likely suitor for Parmatown Mall Phillips Edison may add to Parma holdings with eye to a makeover of troubled property By STAN BULLARD sbullard@crain.com
MCKINLEY WILEY
FEELING MORE AT HOME Potential buyers’ interest in new construction is bouncing back By STAN BULLARD sbullard@crain.com
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s the key summer home sales season comes to an end, Rick Puzzitiello, CEO of Strongsville-based Parkview Homes, says this already is the company’s best year in the last six. He counts 42 sales this year through last Thursday, Aug. 23, compared with 24 sales for all of last year. He just upped his sales forecast to 60 homes this year from 50. “I’m really excited about the future. If you stick around long enough in this industry, it will turn,” Mr. Puzzitiello said.
But is it back to normal? Not quite. “We’ll be there if we can maintain this pace for two to three more years,” he said. Feeling good and being busy are sensations some Northeast Ohio home builders are starting to experience again, though the boom times of the previous decade are history. The difference this year is that builders say some consumers are regaining their taste for new homes. In the Northeast Ohio move-up market for housing, more would-be buyers either have sold their homes amid the pickup in existing home sales or believe they can. See HOME Page 21
BY THE NUMBERS Strongsville-based Parkview Homes is seeing increased sales these days; here’s a look at other trends in the housing market here: ■ Dinallo and Wittrup Homes: Sold five homes costing upwards of $600,000 in Bainbridge; may try again on 24-home site in Solon. ■ K. Hovnanian: Acquired 67 North Ridgeville home sites, with land to install 700 more. ■ The Home Builders Association of Akron’s members think new developments soon will be needed, after the inventory of distressed lots is gone.
Like locomotives that once roared into America’s towns to transform them decades ago, a well-heeled suitor is steaming toward acquisition of troubled Parmatown Mall and Shopping Center in Parma. Using a name reeking of revival — Parmatown Station LLC — the Cincinnati-based Phillips Edison & Co. retail real estate concern has emerged as the likely buyer of the massive property, according to a settlement agreement in Parmatown’s receivership case in Cuyahoga County Common Pleas Court. Phillips Edison owns a portfolio of more than 25 millon square feet of retail space. It’s engaged in the creation of mixed-use properties,
which is a likely next step for the high-vacancy Parmatown property dating from the 1960s. Moreover, Phillips Edison already knows the marketplace in Parma, Ohio’s seventh-largest with a population of more than 80,000. A real estate investment trust the firm operates, called Phillips EdisonARC Shopping Center REIT, owns the 100,000-square-foot Snow View Plaza shopping center in Parma. The firm’s website says Phillips Edison since 2011 has raised more than $120 million in a “Strategic Investment Fund” that targets redevelopment of troubled shopping centers as mixed-use properties. A mixed-use makeover would seem ideal for Parmatown. The property had vacancy of more than See MALL Page 22
INSIDE Crain’s publishes first MBA guide Find details on 42 MBA programs in this week’s Ohio MBA Guide 2012. PAGES 13-19 PLUS: ■ Armed with new capital, Central Federal Corp. eyes wider footprint. PAGE 6 ■ Drought eats into area food manufacturers’ bottom lines. PAGE 7
Legislators sneak in more tax loopholes despite added scrutiny Study shows breaks keep piling up even as Columbus talks of reducing them By JAY MILLER jmiller@crain.com
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At the same time politicians, including Gov. John Kasich, verbally are jumping on the bandwagon to close state tax loopholes, more tax breaks continue to be added.
According to a study released this month by Policy Matters Ohio, a labor-backed think tank, state legislators and Gov. Kasich in the last year have approved at least nine new or expanded tax expenditures — government-speak for tax exemptions, deductions and credits.
Beneficiaries of the new loopholes are companies that employ people who work at home, financial institutions, two convention centers and firms that work for direct marketers. In addition, the tax credit for movie makers was raised. That move alone could cost the state $20
million over two years, though a Cleveland State University study contends that money and more comes back to the state. The CSU study offered hard evidence, if not irrefutable proof, that convinced the governor and Legislature to expand the film industry credit. But most tax exemptions — the other 126 followed by the Ohio Department of Taxation — lack that
scrutiny and level of analysis. Yet they remain on the books, some for decades, without any clear picture of their role in tax policy. Zach Schiller, Policy Matters Ohio’s research director, said he could not put a dollar figure on the annual cost of all the new exemptions, but estimated the cost in the tens of millions of dollars. And while See LOOPHOLES Page 21