Safe you Finance

Struggling Northwest Plaza in St. Ann is scheduled to absorb another blow when it is expected to enter foreclosure Sept. 1.

St. Ann City Administrator Matt Conley said Thursday that the city hopes the mall will remain open and will be redeveloped in the vision proposed by its owners when they bought Northwest Plaza in 2006.

The foreclosure notice filed this week is against NW Plaza Owner LLC, which was formed by Somera Capital Management, of Santa Barbara, Calif., and Zelman Development Co., of Los Angeles. Efforts to reach representatives of both companies were unsuccessful. Tim Just, the mall’s manager, declined to comment.

Conley said he anticipates the foreclosure will result in the lenders assuming ownership of the mall. Such an outcome, common in foreclosures of commercial property, typically leads to the lender’s effort to find another buyer for the property.

The meltdown last year in the financial industry "has really put a crimp on redevelopment projects" such as Northwest Plaza, Conley said. The lender is a group of about 17 investment and pension funds, he said.

"There’s no money to do these projects," he said. "All the money from Washington, D.C., has not trickled down to the local street level."

St. Louis County records show that NW Plaza Owner LLC paid $45 million for the mall, once billed as the world’s largest shopping center, in June 2006. The mall has since declined in value. Northwest Plaza’s appraised value of nearly $44.3 million in 2008 fell to $31.8 million this year, according to county assessment records.

At the end of March, the 1.8-million-square-foot mall was 40 percent occupied, according to Fitch Ratings. Contributing to the skid were the closings of Dillard’s and Steve and Barry’s. The anchor stores remaining are Macy’s and Sears.

The trouble at Northwest Plaza is far from unique among older, enclosed malls. General Growth Properties, the Chicago company that owns the St. Louis Galleria, is in bankruptcy. General Growth also manages Northwest Plaza and has stakes in other malls nationwide.

Crestwood Court, which lost its Macy’s last year and was once a competitive St no fax payday loans. Louis County mall, is trying to remake itself as a center for arts groups. Downtown’s St. Louis Centre, now closed and awaiting redevelopment, went through foreclosure in 2004.

Retail analysts say shoppers’ preference for newer, outdoor "lifestyle" centers hurt enclosed malls. Those not close to major highways also tend to suffer even more, the analysts say.

Northwest Plaza’s current owner put the mall up for sale in 2008. At the time, the owner and the city said a $250 million redevelopment plan, including $96 million in public funding, would proceed. The plan was to return the mall to its open-air format. Retail space was to be reduced, and up to 450,000 square feet of office space was to be added. But that plan, including the addition of a Wal-Mart Supercenter, never materialized.

Salespeople at mall stores said Thursday they had heard nothing about the foreclosure. One clerk, who did not want to be identified, said there have been rumors that developers were unable to get financing to convert the property back into an open-air mall.

NW Plaza Owner LLC bought Northwest Plaza from Australia-based Westfield Group, which had owned the mall for about nine years. Westfield at one point owned six St. Louis-area malls, renaming them with variations of the name "Shoppingtown." The company sold the last of its St. Louis malls last year.

Westfield bought Northwest Plaza in 1997. New York-based Paramount Group bought the mall in 1984 from its original owners, Saul Brodsky and brothers Louis I. and Milton L. Zorensky, who built the mall in the 1960s.

Conley said the structure of the public assistance for mall redevelopment remains. He noted that city officials hope for an eventual revival of St. Ann’s largest commercial property.

"I don’t think there’s anybody who would disagree that something needs to be done up there," he said.

Gail Appleson of the Post-Dispatch contributed to this report.

Source