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Aporkalypse

The "dead" University Mall

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Apparently the proposers of the Envy nightclub at University Mall are appealing their denial of an alcohol permit by the ABC.

I thought we probably needed a new thread for University as it has been stealing space on other threads, especially the Midtowne Little Rock shopping center thread.

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Todays Democrat Gazette talked about a witness that the owners brought in saying that the repairs are not complete. He said there was still exposed wiring and mold in some places. He also said the bathrooms have been gutted but fictures have not been put in place yet.

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Todays Democrat Gazette talked about a witness that the owners brought in saying that the repairs are not complete. He said there was still exposed wiring and mold in some places. He also said the bathrooms have been gutted but fictures have not been put in place yet.

Todays' ADG article was VERY revealing.

The fact multiple e-mails between Simon execs were obtained and admitted as evidence by the plaintiffs was interesting as was the fact that Sears looked at opening an auto store at one of the abandoned sites and the site's condition was so poor as to convince them not to do so. I would love to see these e-mails but based on the hints contained in the article it seems that the property owners have a very strong case for breaking the lease.

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Todays' ADG article was VERY revealing.

The fact multiple e-mails between Simon execs were obtained and admitted as evidence by the plaintiffs was interesting as was the fact that Sears looked at opening an auto store at one of the abandoned sites and the site's condition was so poor as to convince them not to do so. I would love to see these e-mails but based on the hints contained in the article it seems that the property owners have a very strong case for breaking the lease.

I don't think Sears had any intention of opening an auto store at University Mall. They have one a block away. I think they took out the lease to keep anyone else from opening up one.

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Todays' ADG article was VERY revealing.

The fact multiple e-mails between Simon execs were obtained and admitted as evidence by the plaintiffs was interesting as was the fact that Sears looked at opening an auto store at one of the abandoned sites and the site's condition was so poor as to convince them not to do so. I would love to see these e-mails but based on the hints contained in the article it seems that the property owners have a very strong case for breaking the lease.

I read the article too. I hope the judge will be forced to act instead of leaving the case in legal limbo. Simon says it has plans for the site, but doesn't want to make them public until after the trial is over. The only positive steps are steps that reduce the uncertainty/speculation about this important Midtown property.

I believe it is unlikely that the property owners would do anything to break the lease agreement. If the property owners do something to break the lease, they would be sued.

In the ongoing case, the property owners are seeking monetary compensation arguing that Simon has already broken the lease agreement through its mismanagment of the property. Assuming Simon loses, Simon will either be forced to invest in improvements to University Mall or pay the property owners for their loss. With this case, I don't think one can conclude that a propery owner victory gives them the ability to throw Simon Properties to the curb. I might be wrong, but I am betting that divorcing the two entities will require either a lot more litigation or a mutual agreement.

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I don't think Sears had any intention of opening an auto store at University Mall. They have one a block away. I think they took out the lease to keep anyone else from opening up one.

Then why did they try to break said lease because of the awful condition of the property?

I thought perhaps this was done when Sears was looking to move there main dept store to West LR.

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I read the article too. I hope the judge will be forced to act instead of leaving the case in legal limbo. Simon says it has plans for the site, but doesn't want to make them public until after the trial is over. The only positive steps are steps that reduce the uncertainty/speculation about this important Midtown property.

I believe it is unlikely that the property owners would do anything to break the lease agreement. If the property owners do something to break the lease, they would be sued.

In the ongoing case, the property owners are seeking monetary compensation arguing that Simon has already broken the lease agreement through its mismanagment of the property. Assuming Simon loses, Simon will either be forced to invest in improvements to University Mall or pay the property owners for their loss. With this case, I don't think one can conclude that a propery owner victory gives them the ability to throw Simon Properties to the curb. I might be wrong, but I am betting that divorcing the two entities will require either a lot more litigation or a mutual agreement.

I would assume they will ultimately settle, it's just a matter of seeing who has the upper hand. Simon's not going to make massive concessions without seeing what cards the prosecution is holding.

If Simon really doesn't believe in the location and admits that in any case of an extended lease they will be tearing the mall down anyway, is it really such a leap to assume they would want to cut out of Little Rock instead of rebuilding on property they don't own with hostile owners holding some of the cards?

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What's Simon got to lose by just walking away. Surely the land owners would welcome this as the land is more valuable than the mall. I don't know what the tax implications are if Simon abandoned the property. If they could offset the mall loss against profits from other ventures they'd come out ahead. As it stands they're going to be out a lot of money if they hang on and even if they get a favorable ruling from the judge they still have hostle owners to deal with.

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What's Simon got to lose by just walking away. Surely the land owners would welcome this as the land is more valuable than the mall. I don't know what the tax implications are if Simon abandoned the property. If they could offset the mall loss against profits from other ventures they'd come out ahead. As it stands they're going to be out a lot of money if they hang on and even if they get a favorable ruling from the judge they still have hostle owners to deal with.

The mall structure is worthless at this point and they admit as much. If JC Penney's leaves will they be making enough to cover their overhead? Now the mall's oly 36% occupied and after Penney's leaves you would think that would knock it down to 25%ish. Will that cover the costs of continued repair, utilities, payroll, and property taxes?

I think the best scenario would be for the owners to recover the land and sell it to the highest bidder for a large mixed use development or do so themselves (Cella has plenty of money). However, Simon sure does seem to be trying to sell the idea that they want to redevelop it themselves with a mix of offices, residential, and retail and demolish the existing structure. It just seems like a matter of when instead of what will happen.

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More interesting developments yesterday in the case:

Simon president and COO Richard Sokolov was on the stand yesterday. He admitted he didn't know the condition of the mall and said "We will make this building right

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I'd just like to see Simon thrown out of Little Rock all together. If they let University get to the point it's at now, who's to say they wouldn't allow it to happen again. Am I just dreaming this up, or don't they also own McCain Mall? That's another mall that needs some serious work.

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I'd just like to see Simon thrown out of Little Rock all together. If they let University get to the point it's at now, who's to say they wouldn't allow it to happen again. Am I just dreaming this up, or don't they also own McCain Mall? That's another mall that needs some serious work.

They do. Simon really lets their properties across the country get run down unless they face competition stiff enough to reduce their occupancy. That's not the case in McCain, so why renovate?

McCain and NWA mall were very similar in both size and offerings until the NWA Mall renovated and updated. I don't think McCain's been renovated in the last 20 years. I remember them changing out some fountains and stuff at one time but that's been years.

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They do. Simon really lets their properties across the country get run down unless they face competition stiff enough to reduce their occupancy. That's not the case in McCain, so why renovate?

I see your point, and I guess I don't fully understand where all of Simons' revenue comes from. Do they only make it from charging rent to tenants inside the mall? If so, I would think that renovating the mall would make it more appealing to better tenants who in return would pay a higher rent.

Now obviously I don't know how much they charge tenants right now, how much upgrades would cost, and how much more they could charge for rent after upgrades were made, but most of the people I know in NLR will drive three times the distance to go to Park Plaza and avoid McCain. Surely some of the larger tenants realize this is money they're losing and can apply some pressure to Simon. From the outside looking in, it looks like there could be scenario's that would make an upgrade a win/win situation for everyone involved. Especially the folks who have to drive past the giant square turd everyday

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I see your point, and I guess I don't fully understand where all of Simons' revenue comes from. Do they only make it from charging rent to tenants inside the mall? If so, I would think that renovating the mall would make it more appealing to better tenants who in return would pay a higher rent.

Now obviously I don't know how much they charge tenants right now, how much upgrades would cost, and how much more they could charge for rent after upgrades were made, but most of the people I know in NLR will drive three times the distance to go to Park Plaza and avoid McCain. Surely some of the larger tenants realize this is money they're losing and can apply some pressure to Simon. From the outside looking in, it looks like there could be scenario's that would make an upgrade a win/win situation for everyone involved. Especially the folks who have to drive past the giant square turd everyday

Just remember Park Plaza is spending 18 million on their renovations. McCain would have to spend that much at least, and that takes a long time to recoup in just revenue from rent. Who knows when the'll renovate.

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Yesterday's lawsuit news:

Simon and Target discussed Target coming in with a 50-year lease in 2004 and the owners declined to talk about it and severed business relations with Simon. I believfe this as this was shortly before Target tried to get the city to let them build on War Memorial Park land across the street.

Simon offered to let the owners buy out the lease that year for $10 million and no counteroffer from the owners was ever made.

Sounds like the owners weren't exactly doing their part, either...

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The federal judge toured the site yesterday with attorneys and consultants from both sides as well a neutral court-appointed consultant. The consultant has two weeks to make his report.

What is the owners win and demand Simon make the $18 million in repairs they feel are necessary? What's the point when it needs to be torn down to be useful?

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With B of A and Bennigan's closed, has anyone heard anything new on University Mall? I keep hearing a rumor that Target or another big anchor would like to move in if Simon can get lease extended after its trial.

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With B of A and Bennigan's closed, has anyone heard anything new on University Mall? I keep hearing a rumor that Target or another big anchor would like to move in if Simon can get lease extended after its trial.

I'm not sure if anyone else has reported this here, but the ArkTimes Insider page reveals that Simon has met with city officials with 3 proposals for the property-- all 3 of which involve tearing down completely and replacing it with some combination of retail, residential, and medical space. Has anyone else heard anything on this? :huh:

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I'm not sure if anyone else has reported this here, but the ArkTimes Insider page reveals that Simon has met with city officials with 3 proposals for the property-- all 3 of which involve tearing down completely and replacing it with some combination of retail, residential, and medical space. Has anyone else heard anything on this? :huh:

That is what the Urban Land Institute Study recommended back in 2000. That cost the City $100K, but I think it has proven to be a sound exchange of tax payer dollars for strategic planning.

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I'm not sure if anyone else has reported this here, but the ArkTimes Insider page reveals that Simon has met with city officials with 3 proposals for the property-- all 3 of which involve tearing down completely and replacing it with some combination of retail, residential, and medical space. Has anyone else heard anything on this? :huh:

I posted this during the case when there was an article about it in the ADG. The drawings are new - Simon paid for them, not the city. When the city sent its delegation up there Simon reimbursed them for the costs of the previous study and showed Stacy Hurst and the others 3 designs for mixed use development including offices, residential, and retail that they had come up with and were willing to develop under a new lease. The owners aren't interested in a new lease, however, and with 25 years left on the current one there's little incentive for Simon to spend much money otherwise. It's a real pickle and I hope the stalemate doesn't last.

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Anyone want to wager whether we hear anything about the progress of the lawsuit this week?

Well, we heard a little last week. The consultant the judge appointed says that $8 million of work still needs to be done and Simon's lawyers are upset with that. I'm sure the judge is trying to get them to settle.

Simon offered to break the lease and leave for $10 million a couple of years ago. Rather than doing an additional $8 million of work and other numerous repairs that will be needed over the next two decades will they be willing to break the lease and call it even? It would probably save them money in the long run.

I just hope this thing gets settled soon and doesn't drag out for years.

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Well, we heard a little last week. The consultant the judge appointed says that $8 million of work still needs to be done and Simon's lawyers are upset with that. I'm sure the judge is trying to get them to settle.

Simon offered to break the lease and leave for $10 million a couple of years ago. Rather than doing an additional $8 million of work and other numerous repairs that will be needed over the next two decades will they be willing to break the lease and call it even? It would probably save them money in the long run.

I just hope this thing gets settled soon and doesn't drag out for years.

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I don't think Simon will just break the lease. Firstly, if the landowners were willing to let them walk away with anything less than substantial, they wouldn't be sueing. Second, the landowners will prob file another suit if the lease is broken. They still have many years left and it's easy to see the landowners want change, but not change that will involve Simon getting away easy. Simon, to me, looks like they could have done a much better job pulling stores in after Ward's left. Cmon, they had years and years. Someone had to have been interested after all this time.

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I don't think Simon will just break the lease. Firstly, if the landowners were willing to let them walk away with anything less than substantial, they wouldn't be sueing. Second, the landowners will prob file another suit if the lease is broken. They still have many years left and it's easy to see the landowners want change, but not change that will involve Simon getting away easy. Simon, to me, looks like they could have done a much better job pulling stores in after Ward's left. Cmon, they had years and years. Someone had to have been interested after all this time.

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