By JIM ROSS
The State Journal
CHARLESTON, W.Va. — The owners of West Virginia’s second-largest mall have defaulted on a loan as a way of negotiating more favorable terms.
Earlier this month, Forest City Enterprises of Cleveland, which operates the mall, defaulted on a loan package with several lenders.
“The mall’s not going out of business,” said Jeff Litton, spokesman for Forest City Enterprises.
Forest City did not make a payment this month and went into default on the loan. When that happened, a mediator was appointed to handle negotiations on behalf of the lenders, Litton said.
“We’re negotiating with that person. We expect to successfully negotiate a new payment schedule,” Litton said. “We need to find out the best approach to refinancing the mortgage on the property.”
There is “no threat of bankruptcy,” Litton said.
At one time, CMBSs were a common and popular way to finance real estate, Litton said.
“That vehicle is not as accessible as it was back then. You just can’t run out and replace it with a new mortgage,” he said.
“The mall is open for business. It doesn’t impact mall hours or store hours.”
The closing of the Sears store, one of the mall’s anchors, earlier this year did not play a role in the default, Litton said.
However, having an empty anchor space does make it more difficult to work with lenders, he said.
Forest City is a national real estate company engaged in the ownership, development, management and acquisition of commercial, residential and mixed-use real estate in key urban markets in the United States. As of June 30, it had $8.2 billion in consolidated assets and 10 projects under construction at a total cost of $1.2 billion, or $489.4 million as the company’s share. It stock is traded on the New York Stock Exchange under the symbol FCEA.
The company reported net income of $56.8 million in the second quarter, up from $26.6 million in the second quarter of 2016. The increase was driven primarily by significant first-quarter 2016 gains on dispositions and joint ventures that did not recur in 2017.
The Charleston Town Center is a three-story shopping center in downtown Charleston with two attached parking garages. It has about 934,000 square feet of retail space. In West Virginia, only the Huntington Mall in Barboursville has more, with about 1.5 million square feet.
“The mall is in good hands and good shape,” Charleston Mayor Danny Jones said.
Jones said the mall has good traffic and its restaurants are doing well.
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