Eastland Center assigned receiver after financial woes

By: April Lehmbeck | Advertiser Times | Published July 23, 2015

HARPER WOODS — Harper Woods City Manager Randolph Skotarczyk is concerned about the current situation at Eastland Center, but he also sees the potential for positive changes.

Eastland Center is now in receivership. The U.S. District Court’s Eastern District of Michigan assigned Spinoso Management Group as receiver after the mall’s ownership missed multiple payments on a loan.

“The borrower last made a payment on the loan on (March 11), meaning they’ve missed April, May, June, and July’s payments,” Sean Barrie, of Trepp LLC, a company that tracks financial data for commercial real estate, said in an email.

When asked if that places the mall in significant financial danger, Barrie said he wouldn’t say they’ve reached that level yet.

“There is still time to find more stable tenants and make up the payments,” he said. “The thing they’re most concerned about (is) not missed payments; rather, the overall stabilization of the property.”

That is on the mind of city officials, as well.

“Eastland is our single largest taxpayer, so it’s a concern,” Skotarczyk said.

The city has been meeting with mall representatives. He said there are some positive signs, such as new management that wants to make changes in the mall.

“We had a lot of meetings,” he said.

“I still am of the opinion that any movement right now would be positive for the city,” he said.

He said that improvements do need to be made at the center.

“There was no doubt that the property needs reinvestment,” Skotarczyk said.

Because the city is staying proactive in the process and hopes to see some reinvestment, Skotarczyk said he’s been talking with city planners to consider a study for the market in that area. That way, they can connect with the owners or any new owners down the line to see how the city can help with positive development.

“We’re spending a lot of time talking,” he said.

According to information from Trepp LLC, the loan was taken out in 2006.

The mall had experienced a decline in rental income from fewer occupants, according to data from Trepp, but the mall also is dealing with an increase in taxes, janitorial expenses and other fees.

The mall is owned by the same company that owned Northland Center, which shuttered its doors due to overwhelming financial issues.

“I think it’s considerably different than Northland,” Skotarczyk said.

Eastland has a number of national chains and successful anchor stores, such as Macy’s and Target, though the mall did lose Sears a few years ago.

There are a number of successful businesses around the mall, such as Lowe’s, Home Depot and Chili’s, city officials have said.

Representatives from the firm that owns the mall could not be reached by press time.