Meeting on mall purchase scheduled for Monday
Published 12:00 am Friday, December 6, 2013
As more details fall into place — and more come to light — the chairman of the Rowan County Board of Commissioners has called a special meeting Monday to take a final vote on buying Salisbury Mall.
A recently completed Phase II environmental study raised no red flags. And many of the mall’s remaining tenants “seem to be satisfied” with the situation, according to County Manager Gary Page.
Among the businesses he includes in that group are Badcock Furniture. Books-A-Million, Dollar Tree and K&W.
Thelma’s restaurant also plans to stay and is negotiating to use the space formerly occupied by a steakhouse, Page said.
Commissioners voted last month to buy the mall and were expected to close on the $3.45 million purchase earlier this week. Instead, they delayed the closing until Dec. 16. Page said at the time financial issues had arisen that could affect commissioners’ decision.
One surprise the county encountered involves the Salisbury Cinemas, which shut down in early November because of sewage backups, said to have started in July. Namdar Realty Group of New York, which owns the mall and cinema, did not make repairs.
The cinema lease was generating $72,000 a year for the mall owner, and commissioners had hoped it could reopen soon.
According to Page, when county officials were meeting with the mall manager to assess the sewage problem recently, two trucks pulled up to the cinema. An earlier agreement with cinema operator stipulated that he could take the new seats he had installed, once he reached the end of his lease, Page said. But in addition to unbolting and carrying out the seats, the truck crews took the theater’s sound equipment, popcorn machine and other equipment.
“Technically, that’s one of the issues,” Page said.
Namdar, through its limited liability corporation North Salisbury Realty, bought the mall property in foreclosure in March 2012 for $2.5 million. That included the mall, cinema, K&W land and the Bojangles at 1939 Jake Alexander Blvd.
The county’s $3.45 million purchase would not include all that property, however. Namdar separated Bojangles from the rest when he put the property up for auction in September. North Salisbury Realty sold the Bojangles building and property last month for $1.2 million.
The buyer listed on documents in the Register of Deeds’ office is Jean M. Mayer, trustee of the Jean Mayer Charitable Remainder Trust, of 43888 N. Fork Drive, Kaweah, Calif.
Page said the Bojangles parcel was never included in Rowan County’s deal and its sale had no impact on the county’s bid.
In the purchase agreement, the county is allowing the transaction to be treated as a “gift sale.” Namdar will be able to declare any difference between the $3.45 million sale price and the property’s appraised value as a donation for tax purposes. The county has assessed the value of the mall parcel alone at more than $6 million; the cinema and K&W land add another $1.1 million. Appraisals may come in higher.
Namdar also will be allowed to treat the transaction as a ”1031 exchange,” another tax-deferment tool that sellers of commercial property use.
Page says the purchase itself will not cost county taxpayers anything, since lease income is expected to cover overhead. Costs will arise only as the county retrofits the 320,000-square-foot building for new uses. Commissioners have talked about moving a few offices to the mall soon, such as the Board of Elections and the Veterans Service Office. The county would also build fences on the property to contain the county’s transportation department and new Sheriff’s Office lot for impounded vehicles, Page has said. The sheriff currently leases space to store the vehicles.
With Belk and JCPenney moving out of the mall earlier this year, large spaces remain empty.
Page calls the purchase a “leap of faith,” with the county buying the property at a fair price and systematically developing it over 15 to 20 years. That could cost $10 million to $15 million, he said.
Once the sale is official, the county will develop a long-range plan. Page said he doesn’t see the Justice Center figuring into the plan in the immediate future, since the county has invested millions in the courthouse and jail, including the recent completion of space for 48 inmates and two courtrooms.
“That justice center will meet the needs of the county for the next 20-plus years,” he said. “…In my opinion, the jail downtown is the anchor that you just can’t walk away from.”
He recently signed a three-year lease for office space downtown for probation officers. It would not make sense, he said, to put those offices at the mall when they’re so closely tied to the courthouse and jail.
One part of the county’s due diligence on the mall purchase was environmental testing. A Phase I study found a 50-gallon, above-ground diesel tank on the property, installed to fuel an emergency generator. For a Phase II study, ESP Associates took borings of the soil near the tank and tested them for petroleum hydrocarbons, diesel and gasoline range organics. ESP’s report, released Wednesday, said “all analytes were reported to be below laboratory reporting limits.”
Commissioners will meet 1 p.m. Monday on the second floor of the J. Newton Cohen Sr. Rowan County Administration Building, 130 W. Innes St. The agenda calls for them first to consider accepting a grant from the Salisbury Community Foundation for the Department of Social Services. Then they’ll go into closed session to discuss the mall purchase.
After that, Page says commissioners will go back into open session and “vote to stay the course or to stop.”