As misleading as it may sound, "foreclosure" does not necessarily mean the mall will close.
Although Auburn's University Village Mall is technically in foreclosure, it is still making a profit and is even expecting new developments.
"The City of Auburn has been informed that the current owners of the Village Mall and Wells Fargo Bank were unable to come to terms in regards to the current financing facility in place for the property," according to a press release from City Manager Charles Duggan's office. "This has resulted in the bank placing the mall in foreclosure. The mall itself is financially stable."
The mall had been making regular payments on the property loan, but for some reason, the bank demanded the remaining balance on the loan, Duggan said. The mall was unable to pay the large sum, resulting in foreclosure.
"It could be that the bank regulators were requiring additional capital," Duggan said. "The key is that they were making their payments--the mall is completely solvent in other respects. What the foreclosure does is the bank takes over the property and markets the property to a new buyer."
Because of the foreclosure, the mall's ownership will change.
Previously owned by Babcock & Brown and GPT Group, the mall will now be managed and leased under CBL & Associates Properties Inc., said John Stanley, Village Mall general manager.
"The foreclosure is not a reflection of the condition of the mall," Stanley said. "It is a reflection of the bank and owner and the lending environment. It is strictly about the inability of the lender and borrower to come to terms with refinancing. We are not in bankruptcy."
Even though the mall has not dealt with a situation like this before, it apparently is not an uncommon occurrence. Many shopping centers have faced similar problems when they transfer ownership, Stanley said.
"This is just business as usual for the mall," Stanley said.
Stanley said the mall remains in good condition thanks to major stores, such as Dillard's, Belk, JC Penney and Sears.
Referred to by Stanley as the mall's "anchors," these popular stores ensure the mall will maintain a steady influx of shoppers for years to come.
Business seems to be booming for other shops and restaurants located throughout the mall as well.
Bath & Body Works is finishing remodeling and is scheduled to re-open soon. Restaurant TeppanYaki and the Rainbow USA store opened a few weeks ago. Additionally, a new restaurant is under construction.
"We are doing just fine," said Sam Andress, Sears manager. "Business has been great for us, and we have absolutely no complaints."
For shoe department manager William Brand, business has been equally good. Brand said the foreclosure does not mean there is anything wrong with any of the stores.
"Business now is better than it was last year," Brand said. "I see it trending up and up."
Stanley remains optimistic about the current condition of the mall and does not believe the foreclosure will affect its customers or any of its stores.
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