Path of Destruction

The Med Mart’s parent company has a history of unfinished business

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Citing substantial savings from replacing the old mortgage with the much cheaper one, Vornado promised again to turn the languishing mall into a vibrant community asset. To capitalize on the momentum, Fairfax County officials pushed through permits so construction could start at the beginning of the year. So far, nothing has happened.

"I expected to see bulldozers on the site by now," Fairfax County Supervisor Jeffery McKay said in a recent newsletter. "I haven't seen any signs that Vornado is backing away from the project, but I'm now at the 'show me' point."

As Fairfax County awaits its show-me moment, there is nothing more it can do. Meanwhile, the mall continues to draw crime and deteriorate, says a spokesperson for McKay.

But to the Port Authority of New York and New Jersey, Boston and Fairfax County must appear unreasonably antsy about getting their projects done. Both were initiated not long before the recession hit, after all. New York, meanwhile, has waited more than a decade for Vornado to build a promised office tower above the port authority bus terminal in Manhattan.

In 2000, the port authority gave Vornado and a partner the rights to develop the tower, which would also add bus parking and loading areas to the woefully congested hub.

Both The Wall Street Journal and Crain's New York Business have reported on the start-stop nature of the pact, which existed long before the 2008 recession. According to the papers, the deal has been called off at least once for unknown reasons, and at other times, economic conditions have not been quite right for Vornado to actually start the project. Meanwhile, many of the 6,000 buses bringing commuters to New York each morning must return to New Jersey for the day because the anticipated parking spots still don't exist at the New York terminal.

When contacted by Scene for this story, Vornado spokesman Mark Semer quickly responded to a request for an interview and asked for a list of questions to be forwarded to company officials. After receiving the list, which included questions on stalled Vornado projects as well as the nature of Vornado's involvement with the Med Mart project, Semer told Scene that company officials decided not to comment.


Joseph P. Kennedy bought Chicago's massive Merchandise Mart in 1945 because the idea of a one-stop-shop for designers intrigued him. MMPI was born as another Kennedy family business specifically to manage Merchandise Mart trade shows. While cultivating a specialty in managing mart-style facilities, MMPI expanded to include a few other design and apparel marts in Chicago, New York, and Washington, D.C.

When Vornado bought the Merchandise Mart and MMPI in 1998, MMPI's business grew.

Under Vornado, MMPI acquired vast furniture-mart spaces in North Carolina. These showrooms followed the Merchandise Mart model, allowing furniture buyers to see virtually all styles from a large number of manufacturers. MMPI's expertise in managing mart-style businesses sold Cleveland and Cuyahoga County officials on the company. Former County Commissioner Tim Hagan is reportedly a close Kennedy family friend, and he was instrumental in convincing his fellow commissioners to take on the Med Mart project.

Since talks began in Cleveland, Vornado has divested MMPI of all its North Carolina furniture mart holdings. Last July, Vornado defaulted on a $191 million loan and walked away from the largest of these: the 2 million square foot High Point Furniture Mart.

Since 1986, MMPI and the Chicago Merchandise Mart have been headed by Chris Kennedy, the son of Robert Kennedy. But after weathering his family business' sale to Vornado and staying on to spearhead the Med Mart project, Kennedy is also walking away. He will step down as President of MMPI on July 23.

Until recently, Kennedy provided oversight in Cleveland, where there was little evidence of Vornado's presence. Insiders say that has changed; in the last month, Vornado representatives have been a fixture at the Med Mart's regular closed-door construction-review sessions. MMPI did not respond to emails or phone calls seeking to confirm Vornado's involvement.

A call last week to Vornado's New York-based VP of design and construction revealed he was out of town. "He's in Cleveland," said the woman who answered the phone.

A complicated operating agreement dictates that the county pay MMPI $40 million each year in rent, while MMPI returns $36 million a year in lease payments to the county. According to the agreement, if MMPI fails to fill the Med Mart and convention center or defaults on its payment to the county, MMPI can basically be fired.

But given Vornado's recent history, the more pertinent question may be whether MMPI and Vornado will make enough money to stay in the game. In either case, Cleveland would be left with a $465 million complex that attracts no crowds and has nobody to run it.

"They are going to have to be prepared to run a convention center," Sanders says of Cuyahoga County, "and whatever operating losses there are with it."

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