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The "dead" University Mall

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Aporkalypse City

Aporkalypse

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I'm sure everyone saw the article in the paper last week about the court case. Simon totally lost, has to pay for multiple million dollar repairs supervised by the judge and the court liason. I imagine they will appeal and lose again. This will drag out another few years.
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turboturtle Hamlet

turboturtle

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I went to Penney's and Cohns today too.

Penney's will open in its new location in October. I'm not sure how much the closing of the old store is tied to the opening of the new store. The lease on the old store could be paid till the end of the year or longer so that they staff it for their 'Store Closing Blow Out sale for a little while'.

Simon has to be hemorrhaging money, hopefully they'll cut bait in the fall and settle with the owners.
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Aporkalypse City

Aporkalypse

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I went to Penney's and Cohns today too.

Penney's will open in its new location in October. I'm not sure how much the closing of the old store is tied to the opening of the new store. The lease on the old store could be paid till the end of the year or longer so that they staff it for their 'Store Closing Blow Out sale for a little while'.

What do you mean by 'settle'? The lawsuit is over. Simon lost. There is nothing to settle. Do you mean announce a decision not to appeal?

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Aporkalypse City

Aporkalypse

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Is this your opinion or do you have insider information of what the owners want?

Simon has not appealed the decision, so there is not an appeal to drop. The status is that Simon is reading the ruling and considering their option for an appeal.

The question of who pays legal fees was decide by Judge Bill Wilson when he ruled for the plaintiff and said that the defendants need to be pay legal fees.

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turboturtle Hamlet

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First, let me back up a minute cause I just came across an article that I missed from July 7, 2007 in the ARDEMGAZ.

Simon appeals decision on mall By Laura Stevens

LITTLE ROCK — Simon Property Group Inc. on Friday filed a notice of appeal, stating it will ask the U.S. Court of Appeals for the 8th Circuit to overturn a ruling that requires the firm to make more than $7 million in repairs to the University Mall in Little Rock.

U.S. District Judge Bill Wilson Jr. ruled late last month that Indianapolis-based Simon broke its lease by allowing University Mall to fall into “untenantable” condition. Property owners William L. Patton Jr. Family Limited Partnership of Arkansas and Southern Real Estate and Financial Co. of Missouri sued Simon in November 2004, alleging that the mall needed $15 million in repairs.

S. Porter Brownlee, a court-appointed inspector, came to the conclusion that the mall needed more than $7 million in repairs to bring it into compliance with the lease. That amount does not include costs for architects and engineers, as well as mold, asbestos and hazardous material removal.

Do you really think the owners want Simon to spend all of these millions on repairs and the mall continue to sit empty with no revenue coming in?
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Aporkalypse City

Aporkalypse

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I was aware of all of this but I understood that it would be difficult for the owners to force Simon to break the lease when they own the building. Therefore the owners sought the repairs to make Simon compliant with the lease agreement because they clearly had the legal right to do so and it would force Simon to spend money and give the owners leverage.

Here's the bottom line - right now the owners own a expensive piece of property that could be easily sold or redeveloped. They are paying property taxes on this property based on its location and potential. Meanwhile the steady stream of revenue that it generated has dwindled by more than half, probably 2/3, and after Cohn's and Penney's close will be negligible. They have a multimillion dollar investment getting no returns and are locked into more than a 20-year lease in which they will lose money.

Before this lawsuit Simon had little incentive to improve things for the owners. They wanted to find third tier tenants to keep a marginal profit until the lease was up without spending any on upkeep. They do this all the time and I can point to several properties in other states I know of where this has happened. Now Simon has an incentive to negotiate out of the lease - they don't want to pay that much to maintain a dead mall. They won't be able to recoup that money.

I know the Cellas live in St Louis (they also own Oaklawn) but I thought the Pattersons live in LR. Is that incorrect?

Simon already offered a compromise, the redevelopment plan that was so publicized. That would guarantee the owners positive cash flow again for at least 2-3 decades. The owners didn't agree which means they want out of the lease altogether. Why else would they turn it down? Do you think they don't like money? The minor repairs to the mall dictated by the courts wouldn't produce the same kind of cash flow that would've. I doubt occupancy will improve at all.

The owners may very well turn around and sell the land to someone else to get this whole monkey off their back indefinitely if they get out of the lease. I'm not naive enough to think they are purely altruistic or "care about Midtown". Neither did Strode. Developers are in this for the money, make no mistake. All of them aren't are ruthless about causing blight and urban decay as Simon, though. Regardless, the owners can't afford to let the mall sit idle for two decades - it isn't about "caring about Midtown", it's about money. They get a piece of University Mall's revenue and that piece has dwindled to nothing. They want something there that will generate revenue or to get rid of it altogether for a big sum of cash, I'm not sure which.

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Aporkalypse City

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These Patterson's haven't lived in Arkansas since before 2000. I'm not sure when they moved away from Arkansas. As reported in the newspaper, they reside in Ohio. I believe around Cleveland. This is where Mayor Dailey and Stacy Hurst traveled a while back.

Simon's appeal means there will be no UM improvements ordered by Judge Wilson anytime soon. Without intervention, University Mall will be status quo for the foreseeable future, another year or more. One thing that would change the status quo is for Simon to change (I'm not going to hold my breath). If Simon senses that they are headed for another loss during the appeals process, that might incite an attempt to settle the appeal.

Personally, I'd like to see LR grow some cojones and form the Midtown Redevelopment Authority, which should include the power of eminent domain. This gets discussed, but the City is gun shy about redevelopment authorities. While it wouldn't be without controversy, a redevelopment authority could really help Midtown march to the same beat and potentially accelerate progress. I don't think a judge would let a third-party exercise such power while a trial is ongoing, but the threat of that power being used may get the parties to see things differently.

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ArkansasTraveler Whistle-Stop

ArkansasTraveler

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It's surprising no one had mentioned this here yet, but amid the freefall University Mall is undergoing, the Army and Navy recruiting offices are relocating to Ashley Square at the Rodney Parham/Reservoir intersection. The service branches will share an office near Blockbuster, and a short distance from the Coast Guard recruiting office facing Reservoir Road.

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LRU1967 Whistle-Stop

LRU1967

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These Patterson's haven't lived in Arkansas since before 2000. I'm not sure when they moved away from Arkansas. As reported in the newspaper, they reside in Ohio. I believe around Cleveland. This is where Mayor Dailey and Stacy Hurst traveled a while back.

It's the Patton family, not Patterson, that are the co-owners, with Charles Cella, in University Mall. William L. Patton is a senior partner with the Friday Law Firm. The firm represents Cella's Oaklawn Race Track.

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Architect Town

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It's surprising no one had mentioned this here yet, but amid the freefall University Mall is undergoing, the Army and Navy recruiting offices are relocating to Ashley Square at the Rodney Parham/Reservoir intersection. The service branches will share an office near Blockbuster, and a short distance from the Coast Guard recruiting office facing Reservoir Road.
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LRguy21 Whistle-Stop

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That Article was very very good. Its kinda sad how far its fallen. i think its the last piece of the puzzel known as midtown. Does anyone know about some ides for the spot? Whats left in the mall. i pass it almost everyday and its always dead. Now that Pennys is gone and MM Cohn is dead, whats left in there. Anything?

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jcaruth Whistle-Stop

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That Article was very very good. Its kinda sad how far its fallen. i think its the last piece of the puzzel known as midtown. Does anyone know about some ides for the spot? Whats left in the mall. i pass it almost everyday and its always dead. Now that Pennys is gone and MM Cohn is dead, whats left in there. Anything?
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