Promenade Mall

[TheArtist]

From Tulsa World Article....  https://www.tulsaworld.com/business/promenade-mall-s-mortgage-holder-seeking-foreclosure-on-the-property/article_7a9d7f3b-cf7c-5493-b235-00be8a87a49a.html?fbclid=IwAR2gRdM-LhjfrSl9XpDhD6frGd4dcZCdDkmy5CmmS3kjK4vnoGqkBCBabPA


"The holder of Promenade Mall’s mortgage is seeking to foreclose on the loan, according to documents filed with Tulsa County District Court last month.

Ready Capital Corp., the original lender and current holder of the loan, alleges in court filings that the mall’s owner — a Delaware limited liability company — has defaulted on the loan by failing to make payments from March 2019 forward.

Ready Capital Corp. also alleges that its collateral interest in the property is diminishing as a result of the mall owner’s failure to maintain the property and a suspected failure to direct all rents to the designated “lock box.” Court filings claim the property’s value has seen a three-year plunge from $25.9 million in a 2016 appraisal to $4.5 million per a recent estimation by NAI Farbman...."


I almost wonder if there was something to gain by the Mortgage Holder by loaning the money to these people that are known bad actors and "Mall Killers" ?   Like people who can get a tax write off from devalued property? 

All anyone has to do is look the company up online to find horror story after horror story....
https://en.m.wikipedia.org/wiki/Kohan_Retail_Investment_Group?fbclid=IwAR2GVoqL7jf1C1ChZCPIBaUdobqVM9aP2qjOp_9pYH_w1K_XfsWe_FK0owU


Kohan lost the Jamestown Mall in late 2011 due to foreclosure, but retained some ownership in late 2012.[1][10] The mall had previously declared bankruptcy in August 2011.[1] After purchasing Woodville Mall in 2009, it was closed in December 2011 by court order, and demolished by Northwood, Ohio in March 2014 due to its poor material condition.[32][33] Lincoln Mall suffered from serious material condition issues during Kohan's ownership and in August 2013 went into receivership.[15][34] Matteson, Illinois took over ownership in June 2014 and it closed in January 2015 after running out of money.[35][34][36] At the malls closure, over $10 million in fines and taxes was owed to Matteson by Kohan.[34] Lincoln Mall was demolished starting in May 2017.[37] During a 2013 police drug search, serious issues were discovered in Northland Mall's former Kmart that included mold, roof damage, and other major issues. Ownership also owed $141,081.61 in taxes to Nobles County, Minnesota.[38][39] The mall had serious material condition issues in April 2014 that Worthington, Minnesota took action on.[40][41] Worthington won a court decision about the former Kmart in June 2014, and demolition began in February 2015.[42] The mall was sold to 7&41 LLC in May 2015.[43]

Due to lack of payment on a $300,000 bill, Rotterdam Square Mall lost power on February 12, 2015.[2][44] The mall was later sold to ViaPort USA for $9.25 million.[45] Since its purchase, Berkshire Mall has suffered from serious tax issues with many payments being missed. Kohan has been taken to court several times over these issues and has narrowly avoided Berkshire's seizure.[24][46] Berkshire has also suffered from a series of power outages.[8] Kohan owed $627,789 in property taxes on the Washington Square Mall in 2017, and the mall was put up for tax sale.[21] The malls outstanding taxes were paid off in October 2018 for $1.1 million.[8] VF Factory Outlet Mall closed in October 2017.[33] Indian River Mall almost lost power in December 2017 due to unpaid electric bills and bounced checks totaling $428,175. The bill was paid the day electric was to be shutoff.[47]

Mayberry Mall was almost closed on February 1, 2018 by local government officials due to roof and mold issues. It was sold to WRS Inc. Real Estate Investments in 2019.[48][49] In August 2018, Kohan sued Clay, New York for a reduction in the Great Northern Mall's taxes, while owing $1.53 million to county government.[50] Due to the roofs poor condition, Effingham City declared Village Square Mall unsafe in August 2018.[51] Due to Kohan not paying Lycoming Mall's PPL electric bill, it lost power in late August 2018.[52] In September 2018, Southbridge Mall was sued by Cerro Gordo County for $177,324 in back taxes.[26][53] Those taxes were paid off in December 2018, with three of the previous four checks sent to the county bouncing.[54] Kohan owed around $550,000 on The Orchards Mall in various taxes before its sale in late 2018.[19]

Lycoming County Water and Sewer Authority placed Lycoming Mall on the February 2019 sheriff's sale list due to unpaid bills.[55] Kohan made a partial payment to stop the auction.[8][22] Chapel Hill Mall almost had power disconnected by Ohio Edison due to unpaid bills in April 2019.[7]




So what gives?  If I were the court I would say "Heck no, you knew what you were getting into and you knew what was likely to happen to the mall, how it could damage the area it is in, the jobs of the people who worked there, etc. and you didn't care!" thats immoral. If I could I would seize the mall, sell it to a reputable company, and turn around and fine the company that made the loan on top of what they are losing in order to teach them a lesson.

[DTowner]

The only surprise in any of this is that the property was appraised for $25.9 million in 2016.  That is absurd, particularly when you consider that the Dillard’s and Macy’s buildings and the southside parking garage have separate ownership.

Unfortunately, this day has been obvious in coming for years.  Prying this property out of the hands of the current owner is the only way to have any hope that this dying mall can be repurposed into a modern use.  However, even if the receiver gets appointed and the foreclosure occurs quickly, I wouldn’t get any hopes up that anything meaningful will happen in the foreseeable future.  It sounds like the capital for just the deferred maintenance will eat up all the revenues for years and a new buyer with a plan and a lot of money will have to be found.

Maybe now that the folks that transformed the old Eastland Mall have sold it, they are interested in tackling another Tulsa project….

[DTowner]

So what gives?  If I were the court I would say "Heck no, you knew what you were getting into and you knew what was likely to happen to the mall, how it could damage the area it is in, the jobs of the people who worked there, etc. and you didn't care!" thats immoral. If I could I would seize the mall, sell it to a reputable company, and turn around and fine the company that made the loan on top of what they are losing in order to teach them a lesson.

I’m not sure I follow your point or your solution.  It appears that the owner of Promenade is a real estate bottom feeder - buying distressed or struggling properties and attempting to squeeze whatever profit is left out of them.  Ready Capital loaned them money to do so and knowingly took a risk with such an operator.  Ready will likely take a hit and not recover all it’s owed - which is its just deserts for loaning money to such a company in the first place.  Neither should get a Rotarian award for contributions to the Tulsa community, but both were doing what they do - trying to make a buck in a turbid niche real estate market.

The sooner the foreclosure process plays out, the sooner this property can be put on the market and start looking for a new owner.  Again, it’s unlikely anything will happen fast, but up to now this property has been stuck in limbo with an owner that isn’t going to invest in it to turn it around.  This is actually good news for Tulsa, even if it comes disguised as bad.

[SXSW]

I’m just hoping a local investment group can gain control that has the long-term vision of repurposing the mall into a mixed use development.  Unlike Eastland Mall this site is on two main arterial streets, within a half mile of I-44 and across the street from OU-Tulsa.  Some of the highest income neighborhoods in the city are to the northwest. 

It’s a drain on that area now but could be a catalyst to revitalizing the whole area around 41st & Yale.  Look no further than OKC to what they have planned for the 50 Penn site, mixed-use retail with office and housing.  That’s what is needed here.

[swake]

I’m just hoping a local investment group can gain control that has the long-term vision of repurposing the mall into a mixed use development.  Unlike Eastland Mall this site is on two main arterial streets, within a half mile of I-44 and across the street from OU-Tulsa.  Some of the highest income neighborhoods in the city are to the northwest. 

It’s a drain on that area now but could be a catalyst to revitalizing the whole area around 41st & Yale.  Look no further than OKC to what they have planned for the 50 Penn site, mixed-use retail with office and housing.  That’s what is needed here.

A major medical research facility?

[BKDotCom]

It's past time to stick a fork in the Mall
https://www.businessinsider.com/jcpenney-closing-stores-list-addresses-2020-1

El Chico's closed earlier this month / now they're loosing JC-Penney

[swake]

It's past time to stick a fork in the Mall
https://www.businessinsider.com/jcpenney-closing-stores-list-addresses-2020-1

El Chico's closed earlier this month / now they're loosing JC-Penney

I wonder if Dillards would like to move back to Utica.

[shavethewhales]

Every time news breaks of another shop in Promenade closing I am reminded that it is still actually open in some capacity. I really should stop in sometime for old time's sake just to see it one last time.

I feel like everyone has discussed it's demise for years now. Just turn it into offices already.

[DTowner]

The Hallmark store also closed at the first of the year.

The Dillard’s building isn’t owned by the mall (same with the former Macy’s building), which would make relocating the store difficult and expensive.  The ever declining foot traffic through the rest of the mall has to be killing Dillard’s.

[BKDotCom]

The ever declining foot traffic through the rest of the mall has to be killing Dillard’s.

The Dillards and mall crowds have been mutually exclusive for a while

[SXSW]

The Dillards and mall crowds have been mutually exclusive for a while

Agree, it's almost like a stand-alone store.  I think if the rest of the mall was redeveloped there would still be a place for Dillard's and their adjacent garage along 43rd St. 

[TulsaGoldenHurriCAN]

Tulsa Promenade mall losing another store this month

The Hallmark store, a longtime tenant, is scheduled to shut its doors for good at the close of business Feb. 29, a store representative said Thursday. The Hallmark news follows the recent closure of Foot Locker and the impending exit of JCPenney, which announced in January that it would close its Promenade location in the spring.

https://www.tulsaworld.com/business/tulsa-promenade-mall-losing-another-store-this-month/article_b8f03b7b-8821-5286-a3e8-64184a949669.html

[SXSW]

Reminds me of the final years of the Westminster Mall in Colorado.  It was purchased by the city and demolished to be redeveloped by individual developers as a mixed-use downtown area.  From Wikipedia:

Between 1997 and 2009, the mall would lose three of its six department stores as well as major tenant Fashion Bar, which closed in 1997.  Wards closed in 2001 with the demise of the chain, followed by Mervyn's closing in 2005. Mervyn's departed from the Colorado market in 2006.  Macy's closed in early 2009.  With the loss of these anchor stores, the mall has also become increasingly vacant, and is only half occupied as of 2009.  In June 2009, the mall's owners purchased the vacant Mervyn's as part of a redevelopment plan.

In May 2011, the City of Westminster purchased the mall for redevelopment. Plans called for the 34-year-old mall to be demolished by the end of the year with hopes that the anchor stores would remain open.  On May 13, 2011, Dillard's reported that it would close its location at the mall during its second quarter of business in 2011. Demolition of the mall began on June 23, 2011, starting off with the demolition of Macy's.

On January 20, 2012, it was announced that Sears would also be closing in June 2012 as part of a plan to close 81 stores nationwide which left JCPenney as the only remaining anchor. On January 24, 2012, it was further confirmed that the City of Westminster would purchase the 7.9 acre parcel from Sears Holding Corp. for $4.2 million.

By the spring of 2012, three anchors, Macy's, Mervyn's, and Montgomery Ward, two restaurants, Trail Dust Steakhouse and Steak & Ale, the cinema and remaining mall corridor had been demolished. The demolition of Dillard's began that spring. The demolition of Sears started in August 2012.

Plans for the former Westminster Mall location were revealed August 27, 2013. Westminster's plans for a new downtown on the site of the former Westminster Mall took another step forward during an Aug. 26 presentation that outlined a development that includes multi-story office and residential buildings, unique public spaces and vibrant shopping areas.

[Daniel Wright]

I am not in Tulsa right now but I assume the Promenade is shut down like most every thing else.  Who else thinks this is going to be the last nail in their coffin? I doubt it will reopen in its current form. 

[shavethewhales]

Probably, but the Promenade is probably the last place I am worried about at this time. So many businesses are going to be shuttered. This is still the beginning of the beginning as far as economic impacts are concerned.