The owner of the Boulevard Mall and a firm handling the shopping center's $92 million loan are keeping mum as Monday's deadline passed for repaying the debt.
Forest City, the Cleveland-based owner of the mall, and LNR Partners, the Miami-based special servicer that is handling the loan, did not respond to messages seeking comment on whether Forest City made the payment due Monday.
Forest City has three options: Make the full payment; work out a negotiated, structured plan to repay part of the $92.4 million due on the loan; or default on the loan, leaving LNR Partners to begin foreclosing on the property, said Peter Allen Weinmann, an attorney who works on eminent domain and tax assessment challenge cases.
Making the full payment and working out a negotiated payment are unlikely, leaving default the likelier of the three options, said Weinmann, who is not involved in the Boulevard Mall debt situation. That's in large part because Forest City has had the mall for sale since last summer and the amount owed on the property is far greater than the value Forest City assigns to the property, $65.6 million.
Defaulting would set off a lengthy foreclosure process that would wend its way through State Supreme Court. A court-appointed receiver would oversee that process to ensure every step, including any eventual sale, is handled neutrally and independently, Weinmann said.
The Boulevard Mall's general manager declined comment beyond a statement saying the financial uncertainty would not affect operations at the mall. The mall has seen retailers depart, or announce their departure, in recent months. Sears, an anchor tenant, said in December it would be leaving by April.
“Boulevard Mall is open for business and operating on our usual hours for all of our guests, as well as for tenants and their employees," said Brian Calvert, the general manager. "Ongoing discussions between the mall’s owner and its lenders are not expected to have any impact on the mall’s operations, hours, tenants or guests in the foreseeable future. In short, it is business-as-usual and Boulevard Mall remains a key retail destination for Greater Buffalo and an asset for the community.”
Go! Games, Toys & Books, located in the former Gap store, was the latest to close over the weekend. Last week, as store operator Vincent Pagano packed up boxes, he said he would stay in the mall past Saturday's planned exit date if he could. But his corporate headquarters made a decision to leave the mall after the holiday season. Sales at the store have remained strong, and he said he will return in the fall if he can.