Ownership of Park Plaza, the insolvent Little Rock mall, went to its lender at a foreclosure auction Thursday for a lone bid of $100,000.
Before a gaggle of reporters and photographers, Pulaski County Circuit Clerk Terri Hollingsworth and her aide, Kimberly Glover, took little more than three minutes to conduct the weekly noon auction in the rotunda of the courthouse in downtown Little Rock.
It was an exercise that allowed ownership of the property to be transferred to an entity related to Duestch Bank Trust Company Americas, which is the trustee for the holders of the original loan against the mall.
Charles Coleman, a Little Rock lawyer representing the bank, submitted the opening bid ahead of the auction. The auction then was a matter of making the property available to other bidders. There were none.
“Going once, going twice, three times … sold to the plaintiff’s assignee in the amount of $100,000,” Hollingsworth said. “That concludes the sale for today.”
Coleman, a partner with Wright, Lindsey & Jennings law firm, said he wasn’t permitted to speak to reporters.
It’s unclear what now happen to the mall that’s been a Midtown fixture for decades at the intersection of Markham Street and University Avenue.
For now, it is continuing to operate under its court-ordered receiver, the Woodmont Co., which is marketing available space for lease on its website and describing the property as “the premier shopping center in Little Rock.”
The mall covers 547,000 square feet, including two Dillard’s locations that were not part of the sale. Dillard’s owns its stores at the site, which is considered the Little Rock-based national department store chain’s flagship properties.
Other retailers at the mall include Bath & Body Works, H&M, Eddie Bauer, Forever 21, Shoe Dept., Journey’s, American Eagle, The Buckle, PINK, Spencer’s and Talbots
And it will be unencumbered by debt carried by the mall’s previous owner, CBL Properties of Chattanooga, Tenn.
The foreclosure stemmed from a $99.4 million loan that CBL, doing business as Park Plaza Mall CMBS, LLC, obtained from Wells Fargo Bank on March 24, 2011. The loan later was assigned to Deutsche Bank.
Park Plaza CMBS said in court papers that the property didn’t generate enough income to make the required loan payments.
Retail stores in mall and shopping centers have been buffeted by consumer migration to online shopping, a migration aided by the ongoing covid-19 pandemic.
The owner of more than 100 malls in the south-central and southeast United States, CBL filed for bankruptcy reorganization almost a year ago. It recently won approval for its reorganization plan, which takes effect Monday.
It was clear from court papers that Park Plaza wasn’t part of CBL’s future. Company attorneys told Deutsche attorneys it no longer wanted the property. And other than agreeing to a receiver, Fred Meno of the Woodmont Co., CBL didn’t provide a formal response to the foreclosure complaint filed in January.
Pulaski County Circuit Judge Alice Gray granted an $86.2 million judgment on Sept. 8 against CBL and granted immediate possession of the property to Deutsche.
Deutsche Bank assigned its “right, title and interest” in the foreclosure decree against Park Plaza to a limited liability company registered with the state on Sept. 16 and called RSS WFRBS2011-C3-AR PPM, which is the new owner.
The agent for the LLC has the same address as another Little Rock law firm, Eichenbaum Liles. Its officers include Rialto Capital Advisors, LLC, which is listed as its manager; and Sorano Georgescu,who is listed as the incorporator and organizer.
Rialto is a real estate investment and management firm based in Miami. Georgescu is the firm’s associate general counsel, according to her LinkedIn page.
The firm specializes in commercial mortgage backed securities and “distressed/non-performing loans,” among other things.