Parmatown’s Lender Files for Receivership
- Jul 22, 2011
Parmatown Mall’s mortgage lender has filed for the appointment of a receiver in Cuyahoga County Common Pleas Court. That means the lender, Midland Loan Services, will take control of the property, list it for sale and recruit a company to redevelop it.
Parmatown Mall is one of the region’s largest shopping centers. The mall is located approximately 10 miles south of Cleveland, at the southwest corner of State Route 3 and Ridgewood Drive, in Cuyahoga County. It opened in 1956 as a shopping plaza and was renovated in the early 2000s. Its anchor stores include JCPenney, Dick’s Sporting Goods, Macy’s and Walmart. The mall carries about $63 million in debt, the remaining principal on a $69 million mortgage, but the property is worth only between $29.7 million and $42 million. In the past seven years, it lost half its value.
The property’s owner is Parmatown One L.L.C., a company consisting of members of the Ratner, Miller and Shafran families, founders of Forest City Enterprises Inc. Parmatown is separate from the public company’s multibillion-dollar real estate portfolio.
RMS Investment Corp., another Miller, Ratner and Shafran-family company, taking its name from the initials of the founders, manages the 83-acre property, which includes a mall, a strip shopping center and two office buildings. It is estimated that the mall is 70 to 75 percent occupied. However, the property isn’t generating enough money to cover its operating costs and Parmatown One’s mortgage payments.
On July 6, 2011, Parmatown’s lender filed for receivership. David Browning, managing director of CB Richard Ellis Group Inc. in Cleveland, is the receiver appointed by Cuyahoga County Common Pleas Judge John O’Donnell to manage, maintain and sell the property. Parmatown One consented to the receivership after the loss of such tenants as The Gap, the Disney Store, Lane Bryant and even McDonald’s, as it was unable to replace those national retailers with comparable tenants.
Parmatown’s future is still uncertain. However, there are still hopes that, with new owners, new opportunities will also present themselves.