New owner in store for Creekside

Posted by Becky Whittington on February 22, 2012

City and business leaders are about to welcome Strathmore Development Co., a Michigan-based company poised to become the new Creekside owner about a year after it went into foreclosure.

Court-appointed receiver Ohio Equities LLC filed a motion in Franklin County Common Pleas Court last week, recommending that the court approve the $10.5-million sale of the three-building, 360,000-square-foot project to the East Lansing-based Strathmore.

The pending sale, requiring court approval, would give Strathmore ownership of three buildings on the site.

The $60-million mixed-use development includes 71 upscale condominiums, only 11 of which have been sold.

Creekside Park, the plaza and the garage are owned by the city and are not part of the deal, said Brian Hoyt, the city’s public-information manager.

“The city’s investment is sound,” Hoyt said. “We are excited that the process is moving forward and look forward to working with the new owners of the Creekside development.”

Amy Evans, director of the Olde Gahanna Community Partnership, told ThisWeek that local businesses and groups are excited about a new Creekside owner.

“This is our backyard, and it’s more than a development project; it’s a big part of our community,” she said. “So we want to welcome them as a new business, but we primarily want to welcome them as new neighbors. And we look forward to meeting the new tenants they bring to our neighborhood.”

Evans said it has been nerve-racking to see vacant space after vacant space and hear that people have been interested in the spaces, but that it’s all waiting on the new ownership.

“We hope there may now be someone proactively looking to fill those spaces,” she said. “The current businesses in Olde Gahanna have worked so hard over the past few years. It will be nice to inject some more energy and excitement into the area.”

Alleging a default of more than $30 million worth of loans on the Creekside property, lender Huntington Bank in late February 2011 filed suit against Columbus development firm Stonehenge Co. and its affiliate, Gahanna-Creekside Investments LLC.

Huntington agreed to advance funds to Mark S. Froehlich, director of asset restructuring services for Ohio Equities, as the court-appointed receiver in the foreclosure proceeding.

The three privately owned portions of the project were put up for bid in late June, leading to nine serious offers, Froehlich said.

Four of the offers were from local entities, and five were from outside central Ohio, according to court documents. Seven of the nine submitted best and final offers by July 11.

The purchase price of $10.5 million is $1.5 million more than the next-highest offer of the seven, according to documents.

Froehlich told ThisWeek his main goal is to get the best price possible and to get the deal completed expeditiously for the benefit of the community.

According to Strathmore’s website, the development company is involved in all aspects of both commercial and residential projects and has completed several complex brownfield redevelopments, retail and office centers, residential communities and historic renovations.

In addition to its base in Michigan, Strathmore also has an office in Fort Myers, Fla. Its current development projects are in various Michigan and Florida locations.

Gahanna Mayor Becky Stinchcomb said she’s looking forward to working with the new Creekside owner, saying Strathmore would bring new funding, energy and retailers to the area.

“I will encourage the new owners to also work hard with the existing tenants to establish new leases and create the critical mass of businesses needed to truly make Creekside a destination location, as was originally planned,” she said.

Stinchcomb said the new owner has said he plans to complete not only the unfinished retail space but also all of the condos within the next year.

That would bring more permanent residents downtown and more foot traffic and would help all of the retailers there, she said.

Creekside opened in June 2008.

Situated on the 3.5 acres along the Big Walnut Creek, the 240,000-square-foot Creekside development includes 59,710 square feet of office space, 49,350 square feet of retail space and 71 luxury condominiums.

Site amenities include 10,000 square feet of public plaza, seven ornate water features, a conference and events center with a 6,000-square-foot ballroom, a public park with waterfront access and a below-street-level lagoon.

The development included a $45-million private-sector investment and $16.7-million public-sector contribution.

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