A judge has extended the foreclosure sale deadline for Southridge Mall to give the shopping center’s owner, its mortgage holder, and the village of Greendale more time to remove or alter decades-old covenants that could prevent the redevelopment of the former Boston Store site and other parts of the mall.
In a 2021 foreclosure judgment related to the 560,000-square-foot mall itself – a parcel that does not include the separately owned JCPenney, Macy’s, and former Sears and Boston Store properties – receiver Spinoso Real Estate Group had until mid-December 2023 to market the mall property to potential buyers or schedule it for a sheriff’s sale.
On Friday, at the behest of mortgage holder and trustee, Wells Fargo Bank, and the mall’s current owner Southridge Limited Partnership, Milwaukee County Circuit Court Judge William Sosnay agreed to extend that deadline to Dec. 16, 2024.
Explaining the need for the extension, an attorney for Wells Fargo, which brought the foreclose action in December 2020, said that the bank, Spinosa, and impacted anchor store owners had been in negotiations for the better part of two years, and had been close to executing a revised restrictive covenant agreement, when the former Sears property was
sold in February.
The new buyer – Texas-based Fidelis Realty Partners – had a “a somewhat materially different view on the village’s plans and how it affected the parcel they just purchased, versus everyone else who thought they were more or less in agreement,” Wells Fargo’s attorney David Gold told Sosnay.
“I can’t say everything went back to the drawing board, but this spring negotiations took quite a few steps back,” Gold said.
The uncertainty as to whether the village can come up with a mutually agreeable development plan is creating uncertainty that would make it hard to effectively market the mall, located 5300 S. 76th St., Gold said, and could also impact its sale value.
Extending the deadline to sell the property will give the village more time to negotiate a deal that all impacted properties can agree on, Gold said. “The village is working with its developer to find mutually agreeable development plans that work for the village as well as the new owner of the former Sears property,” he said.
Max Meckstroth, an attorney for mall owner, Southridge Limited Partnership, said the request for the extension was fairly straightforward, noting when the December 2021 agreement was reached all parties thought it would probably take two years to market the property. Now they all realize they need more time.
“We find ourselves here today in agreement about extending that time period to sell the property by alternative means,” Meckstroth said.
Shuttered in 2017, the two-story Sears store has been redeveloped as the Shoppes at Southridge and includes 133,835 square feet of space. Most of that space is occupied by retailers, including T.J. Maxx, Dick’s Sporting Goods, Golf Galaxy, and Round 1, a bowling and amusement center that takes up more than 45,000 square feet on the second floor.
As for the former Boston Store property, Greendale officials still appear to be prepared to
sell the redevelopment site to Barrett Lo Visionary development, which has plans to raze the store itself and replace it and its surrounding parking lots with up to 790 apartment units and underground parking, as well as 50,000 square feet of retail and commercial space. The village purchased the 219,800-square-foot department store building in July 2022 for $3.3 million.
