Despite an ominous federal filing March 3 indicating the North Riverside Park Mall faces imminent foreclosure, officials from the shopping center’s owner, The Feil Organization, say they are confident a deal can be worked out to prevent that from happening.
A March 3 filing with the U.S. Securities and Exchange Commission revealed that North Riverside Park Mall’s indebtedness exceeded its appraised value by millions of dollars and that the loan was considered in default.
“The borrower is seeking an extension of the maturity date,” the filing states. “Legal counsel has been engaged and a formal notice of default has been sent. The lender will dual track foreclosure/receivership proceeding while simultaneously continuing discussions with the borrower until a resolution is reached.”
According to the filing, the value of the North Riverside Park Mall property owned by The Feil Organization was appraised at $48.8 million last November. The company owns 423,826 square feet of the roughly 1 million-square-foot shopping center, because its three anchor spaces – J.C. Penney, Sears and the former Carson Pirie Scott stores — are owned independently.
The last time the property was appraised, it was valued at $129 million, reflecting a decline in value of some 62 percent.
The filing also reveals that North Riverside Park Mall is carrying a $68.7 million mortgage, which matured last October. At that time, The Feil Organization received an extension on the maturity date and the special servicer for the loan, LNR Partners LLC, delayed action.
According to Harvey Ahitow, general manager of North Riverside Park Mall, that extension period ends March 20. Ahitow noted that the Cook County Assessor had placed a 2020 market value of $85.3 million on the property.
“We’ve been negotiating with the lender for the past six to eight months,” Ahitow said in a phone interview with the Landmark. “We have a new proposal in that we’re waiting to see the result of. We’re going to get this done. It’s just a matter of time.”
Brian Ladle, a regional manager with The Feil Organization who serves as the owner’s representative for North Riverside Park Mall and Lakeside Mall in New Orleans, said company officials are proceeding “as if this is going to work out.”
The mall continues to negotiate leases for new tenants and continues to work on a deal to expand the movie theater. Amita Health recently opened a new physicians’ clinic in the lower level of what used to be Sears and Blink Fitness is poised to open later this month in a portion of the former Sears Auto Center building.
“If we weren’t committed to the property, we wouldn’t be doing these things,” Ladle said.
According to Ahitow, the mall will be 98 percent leased within the next three months. In addition, he said, Seritage Growth Properties, which owns the former Sears properties (the two-story anchor space and auto center) at the mall, is pitching a 40,000-square-foot outlot development in the north parking lot.
“Our new leasing activity continues to be very strong,” said Ahitow, who added that retail sales revenues have increased slightly in recent months.
While The Feil Organization continues its efforts to either get another extension on its loan, it’s unclear how patient the lender is likely to be.
An attempt to reach LNR Partners LLC, the special servicer of the North Riverside Park Mall, for comment was not immediately successful.
“There are certain things we can’t control, but we’re actively in negotiations,” Ladle said. “Where this ends up leading, we’ll just have to see.”