Judge rules Northland Center will close

By: Kayla Dimick | Southfield Sun | Published February 25, 2015

 A judge has ruled that Northland Center will close.

A judge has ruled that Northland Center will close.

Photo by Deb Jacques

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Judge Wendy Potts approved the shutdown of Northland Center, 21500 Northwestern Highway, according to Oakland County court documents.

In a hearing at Oakland County Circuit Court, Potts granted a court appointed receiver the power to shut down the historic mall, citing the loss of nearly $250,000 each month. Mall tenants will have 30 days to move out, Potts ruled.

The mall entered into receivership in September 2014, and defaulted on a $31 million securitized loan, in addition to missing several monthly payments, according to a report by real estate firm Trepp.

Officials from the city of Southfield and the Southfield Downtown Development Authority held a press conference Feb. 25 in the City Council chambers to discuss the closure.

Acting Mayor Donald Fracassi said he was saddened to hear of the closure, but all hope is not lost for the area.

“We are deeply disappointed that Northland Center will soon be closing,” Fracassi said. “However, we are very optimistic that this important area of the city will be revitalized by new development or redevelopment efforts in the near future.”

Crime in the area will not be an issue after the mall closes, Fracassi said. Police Chief Eric Hawkins addressed safety concerns as well.

“We’re not concerned at all about the crime recently or the crime going forward in that area,” Hawkins said. 

The Police Department has anticipated the closure, Hawkins said, and will be changing its patrol patterns to accommodate the change. The closure will not put a stress on any of the department’s resources, he said.

“The city will take all necessary steps and precautions to ensure that the site remains safe and secure once it is finally shuttered,” Fracassi said.

There are currently three unnamed parties interested in purchasing the mall, Fracassi said.

Recently, the mall has gone through a tumultuous turn of events, as Target announced plans in late 2014 to close its doors there and Macy’s announced plans to close in January.

According to Farbman Group Senior Vice President Ron Goldstone, the reason for the closure most likely lies not only in the number customers heading out to the mall, but the rent retailers pay.

“Unfortunately, it’s a situation where the rental income and the cost to operate would not allow the asset to maintain operations,” Goldstone said in an earlier report. “It’s a function of the financial basis of the asset and the market value, and that’s predicated on income the assets are able to generate and the expenses involved in running it.”

Built in 1954, Northland Center was one of the nation’s first suburban malls, and is currently owned by New York-based real estate firm Ashkenazy Acquisition, which also owns Eastland Center, in 2008. The mall is managed currently by Spinoso Real Estate Group.

Fracassi said the mall will be completely shut down by late April.

Attorney John Polderman, who represents the receiver, declined to comment on the matter. Attorneys James Allen and Heather Olsen from Miller Canfield, who represent the mall’s lenders, could not be reached for comment at press time. Robert O’Brien and John Piggens from Miller Johnson, attorneys representing Ashkenzy Acquisition, also could not be reached for comment at press time.

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