Citadel Mall going to foreclosure auction with $69M in debt, court documents show

By Ashley Barker
abarker@scbiznews.com
Published Jan. 6, 2014

Two Charleston shopping centers are scheduled to be auctioned to the highest bidder on Tuesday.

Citadel Mall, located at 2070 Sam Rittenberg Blvd. in West Ashley, has a judgment of more than $69 million, according to Charleston County’s Master-in-Equity auction list. Its neighbor West Ashley Shoppes is more than $24 million in debt.

Wachovia Bank National Association loaned $75.2 million to Citadel Mall CMBS LLC in March 2007 with an annual interest rate of 5.68%, according to court documents. The mall didn’t pay the full monthly payments from May through July 2013, the documents said, and the company filed a mortgage foreclosure complaint July 31.

Court documents indicated the mall’s total debt through Nov. 5 was $69,479,172.52 based on the following information:

Debt:

Principal balance

Interest at the rate from May 1-Nov. 5

Additional 4% interest from July 29-Nov. 5

Late fees

Master servicer, special servicer expenses

Attorney’s fees and costs

Minus the following items:

Amounts held in escrow

Amounts held in reserves

 

$68,169,308.87

$2,025,384.51

$563,323.34

$78,391.53

$16,380.18

$30,000

 

$575,220.03

$828,395.88

Source: Charleston County court documents

Interest accruing at the default rate of 8.68%, equaling $16,463.46 per day, will be added to the debt, the court reported.

Tenants behind on rent

On Aug. 30, a Charleston County court appointed New York limited liability company Spinoso Real Estate Group to manage and operate the property.

Spinoso provided the court an executive summary of key financials at the end of November for Citadel Mall, which has more than 70 retailers including anchors Belk, Dillard’s, JCPenney, Sears and Target.

At the time, the 1,077,242-square-foot regional shopping center had six tenants past due on rent by at least 90 days and in excess of $10,000. Palmetto Moon owed $138,988, and Lacy School of Cosmetology owed $85,247. Welcome China was behind $57,079, China Master was $16,665 past due, and Van Buren Academy was listed as owing $11,734 in rent. Gold Valley, a kiosk, also owed $17,205, citing “slow sales,” according to Spinoso.

Small tenants continued to “complain about sales” during the month, Spinoso reported, and in-line national tenants appeared to be “up and down across the spectrum.”

As of Nov. 30, Spinoso listed Citadel Mall’s total assets as $58,771,262. On Dec. 31, 2012, the mall’s assets were listed as $77,917,289.

Buying a mall

The property will be sold at public auction at the Charleston County Judicial Center, located at 100 Broad St. Master-in-Equity Mikell R. Scarborough will require a 5% deposit on the amount of the bid, and interest on the bid must be paid to the day of compliance.

Proceeds of the sale will be used first to pay for the auction. Then it will pay the debt due on the date of compliance or as much as the purchase money will pay. Anything left will be held pending a court order.

If Citadel Mall CMBS does not win the property during the auction, the court has ordered the Charleston County sheriff to remove any members, managers, representatives and agents of the borrower from the property.

West Ashley Shoppes debt

West Ashley Shoppes, across from Citadel Mall on Orleans Road, is also scheduled to be auctioned.

Court documents report that on Oct. 26, 2006, CIBC Inc. made a $20,500,000 loan to WA Shoppes LLC with an interest of 5.93%. The company was expected to pay $121,986.79 each month. WA Shoppes stopped making the full payment on May 1, 2013 and each month thereafter, the documents said.

With a principal balance of $20,158,625.65 on Nov. 5, WA Shoppes was $24,381,935.88 in debt once interest and late fees were added, and $123,398 held in escrow and reserves of $118,425 were subtracted. The total debt is accruing interest at the default rate, equating to $5,560.43 per day.

For both properties, bidding will remain open for 30 days, until Feb. 6, and the attorney on file is Charlotte-based David H. Simpkins of Kilpatrick Townsend & Stockton LLP. Simpkins did not immediately respond to requests for comment.

Reach Ashley Barker at 843-849-3144 or @AshleyNBarker.

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