Shenango Mall Defaults, Owes $3.43M on Mortgage
HERMITAGE, Pa. – The Shenango Valley Mall – absent big box retailers Sears and Macy’s since last March – is now being operated under receivership after defaulting on a $3.43 million commercial loan.
The mall is owned by JSMN Shenango Valley Mall LLC of Paramus, N.J. It has not made a payment to its lender, Iowa Square Realty LLC of Great Neck, N.Y., since December 2016, according to court documents.
Iowa Square Realty filed a foreclosure claim against JSMN last April. Earlier this month, U.S. Magistrate Cynthia Reed appointed Philadelphia-based Metro Commercial Real Estate Inc. as the receiver. The appointment was agreed to by JSMN in a joint stipulation filed with U.S. District Court for Western Pennsylvania and the foreclosure case was closed.
States the foreclosure complaint, the commercial mortgage in default was executed in June 2012 with Paradigm Credit Corp., the original lender. It was assigned in December 2014 to Iowa Square Realty and was to mature in June 2013. Instead, the maturity date was “extended on multiple occasions by successive loan extension agreements,” the most recent of which was dated Jan. 1, 2017 and extended the maturity deal to June 30, 2017.
As part of the extension, JSMN agreed to make two separate monthly payments beginning in January of last year and continuing through June. Interest payments in the amount of $29,166.28 were due on the first day of the month. A separate “monthly extension fee in the amount of $38,461 was due on the 15th day of each month,” court documents state. “By its own admission, for each and every month beginning in January 2017, borrower did not make the two monthly payments required,” documents say
Last year the nation’s retailers announced nearly 7,000 store closings, according Fung Global Retail & Technology. In identifying retail trends for 2018, the research company said the mall landscape in the United States will “evolve to incorporate traffic drivers such as food halls, flexible spaces and more diverse, mixed use anchors.”
But not all malls will survive.
While the receiver now manages the Shenango Valley Mall for Iowa Square Realty, preserving its assets, bankruptcy remains the next legal step.
And should JSMN file for Chapter 11 protection or Chapter 7 liquidation during the receivership, Magistrate Reed ordered that the court must be notified immediately and Iowa Square must be preference to stake its legal claim on the property.
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