CHARLESTON, W.Va. — The financially struggling Charleston Town Center Mall has been placed in receivership.
Under a settlement okayed by Kanawha County Circuit Judge Joanna Tabit Friday, the national real estate firm CBRE Group will take the day-to-day operation and management from the mall’s owners, Forest City Enterprises
“Beginning midnight on Sunday they will take over operation of the Town Center,” Charleston City Attorney Paul Ellis told reporters after Friday’s hearing.
The mall owners defaulted on the $93 million owed on a loan from U.S. Bank Association. The bank filed a lawsuit to put the mall into receivership. The parties agreed to a settlement before Friday’s court hearing. Judge Tabit signed off on the deal and also agreed to allow the City of Charleston and the Charleston Urban Renewal Authority to become full parties in the lawsuit.
Ellis said the city and CURA have an ongoing interest in the future of the Town Center. CURA owns the property the mall’s parking garages sit on. The mall pays CURA $300,000 a year for its use of the property, which comes in $75,000 quarterly payments. Because of the mall’s current debt issues, it’s possible CURA won’t receive its next quarterly payment.
“This issue means a lot to the City of Charleston obviously and to CURA,” Ellis said. “CURA has an interest in the parking buildings and both the city and CURA have an interest in the continued success of the Town Center.”
The agreement gives CBRE the authority to make management decisions concerning mall staff, leases, recruitment and other operational issues.
“The receiver will come in and essentially take over the full operation of the Town Center. They’ll manage everything,” Ellis said.
The Charleston Town Center opened in 1983 as the largest downtown shopping mall located east of the Mississippi River but it, along with other retail malls, have fallen on hard times in recent years with a struggling economy and the major increase in online shopping. Sears closed its Town Center anchor store last year while Macy’s had to be convinced by city leaders to stay. The empty storefronts have been increasing in the mall in the last several months.
Ellis said while the future remains unclear, the receivership decision is the right step for now.
“Good news would have been that the Town Center’s debts would have been paid and it would have been operating and that stores would stay in there and want to be there and people wouldn’t have issues about security—but under the circumstances I think it’s very good news,” Ellis said.
The future could include a group coming forward to purchase the mall from the lending institutions involved at a cheaper price than the $93 million currently owed.
–It’s possible the CBRE could come to an agreement with Charleston area real estate consultant Andy Boyd to help with the mall property.The city is urging the parties to consider that move.
–All parties have also agreed to have a discussion on mall security in the near future, Ellis said.
“The Town Center folks agreed to take a look into that. We’re going to take a look into that and also the receiver is open to having discussions about that. There may be a need for more private security or more off-duty police officers in the evenings and on the weekends,” Ellis said.
–The agreement requires Judge Tabit to receive financial reports from the receiver in the form of a budget. The first report will come in about 30 days and after that every 60 days.