Los Angeles-based owners will consider purchase offers for ailing mall but portions of mall to be shuttered
A Los Angeles real estate investment partnership that owns Jackson’s Metrocenter Mall says it has caught up on the mall’s tardy debt and will avoid foreclosure.
Meanwhile, Jackson Metrocenter Group, LLC, is willing to consider offers from prospective buyers, said Shervin Mateen, general partner of the group that owns malls in Houston, Illinois, Indiana.
Absent a sale, the owners plan to ride out the recession and intend to close off a portion of the 1.2-million-square-foot retail complex to save on costs.
The investment group, which has 12 million square feet of retail and office space across the United States, bought the struggling mall five years ago. Store space at the three-decade-old mall has been nearly half empty in recent months. “Hard economic times have had a negative effect on retailers not only in Jackson but everywhere else,” Mateen said in an interview shortly after resolving the foreclosure issue.
The investment group’s delinquency on payments led lien holder First Capital Bank to publish a notice of foreclosure the Monday before Thanksgiving. The Los Angeles-based bank had an outstanding loan of about $6.4 million on the Metrocenter, according to Richard Montague, a Jackson lawyer representing First Credit Bank.
Montague said early last week the bank would be among the bidders at the Hinds County Courthouse if the foreclosure occurs. First Credit Bank would have been willing to take on a partner in the acquisition who could put up 35 percent of the purchase cost.
“We’ve had inquiries about a short sale but at this time would consider a full partner.”
If it should acquire the mall, First Credit would be interested in a “serious offer” for it, he said.
Mateen and his partners are interested in any serious offers, as well. He said he has not talked with Jackson’s Watkins Development, which bought the mall’s Belk building and wants to acquire the rest of the mall. “Should they want to be serious about buying the mall we would be interested in talking to them,” said Mateen, who added he was unsure of the property’s current market value.
Jason Goree, vice president of Watkins Development, said earlier this week that he did not expect the property to go to foreclosure. He was hopeful, however, that Watkins could strike a deal with the owner, he said.
“We want to turn it into a mixed-use development,” said Goree, that would include retail, office and residential.
Jackson Mayor Harvey Johnson plans to propose a mixed-use zoning for the mall’s 80 acres as part of the GO-80 strategy to increase the economic vitality of the U.S. 80 corridor.
The city’s mixed-use proposal “meshes well with our plans,” Goree said.
Mateen said his partnership has no immediate plans to change the mall, though it, too, sees a lot of potential in a conversion to mixed use. “We will be looking to develop under the future rules,” he said, “not only with conventional retail but other forms.”
Added Mateen: “We are going to use our resources in order to turn the mall around.”
For now, though, the key is surviving the tough economy, he said.
“We are going to do our best to reconfigure it in the future months,” Mateen said.
The process would essentially involve relocating tenants into one area of the mall and shutting down the part of the mall that would be left vacant, according to Mateen.
“The goal is sustain the property and, hopefully, the economy will make a turnaround and the occupancy of the mall will go up.”
Photos by Ted Carter
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