At this point, continuing negotiations is only option

It’s time for Martin Graff and Martin Goldman, the owners behind Oak Park Mall Ltd. Partnership, to do what’s right for Austin.

After months of negotiations and planning, the deal for the Austin Port Authority to buy the mall to eventually turn it over to Hy-Vee to build a 60,000- to 90,000-square-foot grocery store collapsed Tuesday.

The Austin Port Authority backed out of a general purchase agreement first announced last October after it failed to reach amended lease agreements with Younkers, CineMagic 7 and Anytime Fitness or an amended occupancy agreement with Shopko, which owns its own building, by a deadline to finalize the talks. One of those legal contracts calls for the property to remain a mall, which goes against all the city and Hy-Vee’s plans to tear down the mall and build the grocery store.

Rather than assume a daunting amount of legal risk, the city hit the brakes — and also avoided being placed in a position where it had no leverage and likely could have been forced to choose between breaching contracts or accepting unfavorable terms. At this point, it was the city’s only option.

Though disappointing for the community, the fact that a deal as complex as this hit a snag isn’t the most surprising part of this story.

The stunning and maddening part of the story is that Graff and Goldman denied the port authority’s request to extend the deadline and give them more time to negotiate with the tenants, according to a statement by City Attorney Craig Byram.

This makes zero sense, unless there is some glaring and important fact or bit of news yet to be made public.

We don’t know how far apart the port authority and tenants were in their negotiations, but the city’s termination would seem to indicate that a deal couldn’t be reached unless someone or everyone made significant concessions. That, however, does not indicate the deal is dead. City and Hy-Vee officials have made clear their willingness to keep talks going and move ahead with the project. Common sense would say Shopko, CineMagic 7, Anytime Fitness and Younkers officials would also want to continue talks. Along with Goldman and Graff, those tenants have the most to lose from this deal’s demise. And, what good does an empty building do for business?

The blame game is easy. It’d be easy to point a wagging, accusing finger at the city of Austin/port authority and the tenants that failed to reach an agreement. However, few concrete details about those negotiations have been made public. Without knowing specifically what tripped up these discussions, it’s impossible to fairly place blame on one side or the other. Such agreements are anything but simple. Each party involved brings a different, unique set of goals and needs to the table during discussions like this. Most of the time, the parties involved don’t want the same thing.

It is, however, stunning that Graff and Goldman wouldn’t extend the deal. They should give this deal every chance to succeed, for their own sake as well as the sake of the community and everyone involved. It’s hard to conceive of anything they could gain by letting the deal die.

There are few other conceivable future options for the mall property:

Option 1: This deal — or some semblance of it — is resurrected. This makes the most sense for everyone involved.

Option 2: Graff and Goldman find another buyer for the property. This seems highly unlikely for a variety of reasons: The property is aging; the mall owes thousands in property taxes, which a buyer could inherit; any reclamation or demolition would be costly; and there’s another available space across the street in the former Target location — meaning retail space isn’t a hot enough commodity to make a bidding war likely.

Option 3: Graff and Goldman reopen the mall. This is the least likely and, perhaps, least appealing option. After most tenants were forced to leave the mall late last year and with the mall’s history of tax issues, few tenants are likely to bite on a reopened mall. It would be bound for failure.

Option 4: The property is left vacant and forfeits to the county. While unsavory, this almost happened in summer 2013. That’s when the mall came within days of forfeiting to the county, but Graff and Goldman eventually paid off more than $370,000 in property taxes. While not an appealing option, this could be the default if all other bets are off. But a large retail space sitting empty for years is probably the least appealing option for all parties. The mall again owes more than $344,000 in unpaid taxes and would forfeit to the state in May 2017 if it doesn’t pay up or enter a confession of judgment payment plan. Shopko and Hy-Vee are current on their property taxes.

Austin residents can argue all day long about whether the initial mall deal was a good idea, but such arguments are moot now. Hindsight is 20/20, as the saying goes. At this point in the game — when the mall is largely empty and devoid of tenants — it’s in the best interest of all remaining parties involved to move ahead with the deal to build a new Hy-Vee.