Tuesday, March 24, 2009

Re: Financing, Shitty Urban Mall

There was a day when Parkway Center Mall had "Gold Circle," "David Weiss," "CompUSA," and no carpet. My have times changed:

The developer of the long-struggling Parkway Center Mall has opted to transfer a majority interest to Pittsburgh’s Urban Redevelopment Authority as opposed to paying off the $6.2 million loan in full.

Green Tree-based Kossman Development Co. faced full payment of the loan on June 1 but opted to grant the URA, the city’s economic development arm, a 60 percent interest in the project, said Megan Stearman, a spokesperson for the URA.

Stearman said under the new agreement Kossman will pay 60 percent of the mall’s net proceeds annually toward the remaining debt.
Sounds like the URA is looking at the chance to try to get something out of this deal rather than get nothing. Of course, if the Mall goes totally pear shaped, than this 60% stake is worth 60% of nothing.

And National City Bank isn't around anymore to take over this vacant urban mall.

That being said, "Shakey" mall, is an awesome metaphor for today's real estate/financial market.

5 comments:

Bram Reichbaum said...

"The developer of the long-struggling Parkway Center Mall has opted to transfer a majority interest to Pittsburgh’s Urban Redevelopment Authority as opposed to paying off the $6.2 million loan in full."

Um. Interesting. So as I read this, the assets will revert to the URA. As I recall, due to the recent legislative action, that loan money would otherwise be repaid to the City of Pittsburgh.

Even setting aside the whole "whose money is it" fandango, what would you rather have: a bunch of cash, or Parkway Center Mall?

EdHeath said...

Parkway Center Mall had Dino kingdom or Dino something or other (a play area for small children) on the lower level. When it closed, the Mall or Dino- something’s owners put up these posters in the windows showing cute cartoon dinosaurs standing shivering on ice floes in the middle of water. “Dino-Kingdom had to close” (or words to that effect) the posters read. The clear implication was that the cute dinosaurs were dying (damn evolution), which I thought was screaming funny since any small child seeing the poster would demand to know (from its parent) what was happening to the cute dinosaurs.

The irony here, especially for the larger issue of the mall itself, is pretty clear. Parkway Center Mall is actually in a pretty good location. If downtown dwellers could go there in minutes (outside of rush hour) to shop at the Giant Eagle or …The stores and restaurants that used to be there were all really poplar once: David Weiss, Pharmor, Chi-Chi’s and the only Pittsburgh location for CompUSA for a while. Now all gone. Somehow I think the City or the URA or whoever should have just foreclosed or driven Kossman into bankruptcy or whatever to put them out of our misery. Otherwise we are just tossing shivering Dinosaurs a sweater, to stave off temporarily the inevitable. Perhaps Bram’s question should have really been, which would you rather have, 60% of a failed mall, or complete possession of the failed property, now yours to do whatever with.

Paz said...

Parkway Center is in a very good location. But it's already too far behind the mall at Robinson to catch up. I google mapped it to get some sense- a drive from downtown to Parkway Center is 8 minutes. It's an additional 8 to get to Robinson. These times are generous, but you get the point. Who wouldn't take the extra ten minutes for the hundreds more options available at Robinson? The mall is in a bad place of being not urban enough to be trendy, but being too urban to get any bigger.

Matt H said...

PWC mall used to be great!

EdHeath said...

The URA should use it's unlimited governmental power to only allow people to shop at Robinson Town Center (and the satellite malls) if they are driving Yugos. They could then rent Yugos from Parkway Center Mall, solving the problem of PWC making enough money to pay off their debt ... Among other things, that would put the eight minute trip from PWC to RTC in clear perspective (you would have to factor in the time spent pushing the Yugo up a couple of hills).