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Well, this certainly adds a wrinkle to the situation...
Based on everything that has come out, I would find that a very disingenuous statement. Cafaro very much wanted the mall and now that it has been outed just what sort of scheme was going on, it is better for them to call off the deal. They have every reason to want the mall, they took 45 million off the top before the walked away - just pure profit. The reset button has been pushed and the mall can be scalped again. I think they very much wanted it.
I am hearing conflicting things about the Macy's Department store. I fear the worst but I am assured by someone inside their organization that this location will not close. Looking around the store the last time I was there, it felt like it was closing. I did notice they had removed all of those stupid price mark ups from the past. At least what they sell is a reasonable price for as long as it lasts.
Is Jones full of it, Cafaro or both? Somehow I think Charleston would be better off with neither of those two round town. Whole thing stinks to high heavens. If not Cafaro then does anyone even buy it?
Is Jones full of it, Cafaro or both? Somehow I think Charleston would be better off with neither of those two round town. Whole thing stinks to high heavens. If not Cafaro then does anyone even buy it?
that's the problem for CBRE-Cafaro now, the cat is out of the bag. The mall can be sold for its debt amount, not its tangible asset value, much less a combination of both. At this point CTC is a very attractive acquisition. $100 million for an urban surrounded by millions of dollars of current development is a real estate dream - location, location, location. But, it takes time to file all the paper work, some of which has a minimum passage of time before coming into life as well grooming backers for the dime. I am not sure who will trot in now, 20 to 25 million is not out of the question even though that is a drop in the 100 million dollar bucket. The restructure will require them to still pay off the balance if they do not pay it up front.
I know Ron Butlin and I do not think he will give away the garage or the land. He may sell the garages as part of the total deal, but the CURA is 50% based on the garage receipts. He has to have that money to run CURA.
So was Jones smart enough to torpedo this or was it a complete bumbling accident. I don’t know what to make of him. He talks out of both sides of his mouth basically as any politician does. It’s probably hard to tell. But if not Cafaro who else could possibly be interested? And as much as that Macy’s store sucks unless they are going to replace it with another tier two level store and not with a tier 3 then I hope it can be kept.
So was Jones smart enough to torpedo this or was it a complete bumbling accident. I don’t know what to make of him. He talks out of both sides of his mouth basically as any politician does. It’s probably hard to tell. But if not Cafaro who else could possibly be interested? And as much as that Macy’s store sucks unless they are going to replace it with another tier two level store and not with a tier 3 then I hope it can be kept.
One of the interesting takeaways in this is that former Mayor Danny Jones 'should' have talked like this when he was in office and when he could do something. Odd, that only now that his 4 terms/16 years have ended, does he find his critical voice.
No one has to buy the mall at auction and it will not change status. But, if there is another buyer out there and they are on the up and up, we would have been told their name by this very late date. If they are something more in-line with the Cafaro+ForestCity+QIC scheme, then they would not want their name until the deal was struck. Of those mentioned to date only QIC can effectively step in. They nearly bought the mall as part of the old deal, but balked on the debt, that debt is no longer a concern since the mall is being given away for the amount of the debt.
As for Macy's. I will be honest, I do not care if they stay or go. They aren't something special in the department store world like they used to be, more or less an upscale Sears and the darkness that entails. It would bother me much to see JC Penny exit the mall.
I would like to hope that Macy's would stay, but there are others out there that can fill the void. It is a shame the old Diamond Company went out of business, this location would have been perfect for them. But, I believe the only 2 chains doing any expansion in this region Belk's and Boscov's. In any case, I do not like the idea of sticking a hotel on the mall and I wish that Brickstreet had never taken over the Montgomery Ward location.
No matter who buys the mall, it needs a refurbishment and not the peel and stick type we got last time - a real going over on the order 30 to 50 million dollars. Now that the mall is coming out from under the debt, that is feasible, unless we get another snake-oil company coming in to give the mall another hair cut.
Here’s some food for thought that I’m choking on. If Macy’s leaves and is not replaced or is replaced with a tier 3 anchor then The Crossroads Mall in Beckley will technically offer a higher end anchor store there in having Belk. This would have been unfathomable 20 years ago that Charleston retail is at this level.
Of course a tier 3 anchor might fit the local population and economy better. But at the same time another segment that wants a little more higher end will have been totally shifted to Barboursville at that point.
Here’s some food for thought that I’m choking on. If Macy’s leaves and is not replaced or is replaced with a tier 3 anchor then The Crossroads Mall in Beckley will technically offer a higher end anchor store there in having Belk. This would have been unfathomable 20 years ago that Charleston retail is at this level.
Of course a tier 3 anchor might fit the local population and economy better. But at the same time another segment that wants a little more higher end will have been totally shifted to Barboursville at that point.
If Macy's is not replaced, that opens up a huge can of worms. All of the lease agreements in the mall are technically void. I am sure there is a window of exposure for such reactions but it is probably not long. Most of the retailers left in the mall want to be there but if their traffic dies they will have no reason to stay. Losing an anchor has a profound effect on a mall, but I am not sure losing Macy's is all that crucial. I do not see Macy's patrons actually going anywhere in the Mall except to Macy's. JC Penney shoppers on the other hand seem to shop in the mall as well as Penny's.
While I am not pleased with the prospect of a downgrade in department stores, I have to ask myself, what would I prefer? I could live with a mall that had JC Penney's, Belk's, Boscov's and even a Khol's. it is not glamorous but people are shopping in all of those stores and CTC needs shoppers. More so, people shopping in those stores shop in the mall in general and it desperately needs that. Obviously, I would prefer Dillard's to replace Macy's and in time hopefully the KM Hotel would fall through and something more retail orientated would take place at the Sear's location. Even better would be BrickStreet moving out - God, but I do hate their presence.
The good thing working for Charleston and the CTC is that we have turned the corner on so many things. It is hard to see when you are going through these transitional periods but the city and mall have passed their darkest points. The city has bounced back - officially - from the population drop. The US census still lists the city at 51,400 residents, which is a bit higher than the figures ranging on guesstimate sites that show a band of 48,000 to 49,000. We will know more in a couple of years when the next census takes place, but it looks to be holding, even though the county is dropping about 1% per year.
As much as we wrung our hands over these events regarding CTC, moving the mall out of receivership and into the black is a good thing. The CC-CC is a huge boost to making CTC credible again, but it is going to take someone that see the future and hold the course through the next couple of years of decision making. A plan needs to be enacted that involves all parties, private and public.
Here’s some food for thought that I’m choking on. If Macy’s leaves and is not replaced or is replaced with a tier 3 anchor then The Crossroads Mall in Beckley will technically offer a higher end anchor store there in having Belk. This would have been unfathomable 20 years ago that Charleston retail is at this level.
Of course a tier 3 anchor might fit the local population and economy better. But at the same time another segment that wants a little more higher end will have been totally shifted to Barboursville at that point.
Something else I thought I would that I missed in my reply is that a Court Auction is not an instant sale. I believe West State Law says that such a transaction is a lien sale, meaning the original owner has 18 months to clear the debt before it is finalized. If that is the case then we would not see a true hand over until July 2020, assuming the original note holder - CBRE - wished to contest the sale. I do not think that is likely to happen however, since the biggest hurdle for the mall has been the debt load and now that is being cleared by essentially giving the mall away.
We will know more in tomorrow's news when the court rules on the parking garage fees.
Macy's just announced the are closing 8 locations. Charleston is not on the list. A lot of big name cities are though.......Tysons Galleria in DC WOW!
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