Starting bid is $7 million
Half of the troubled Burnsville Center will go on the auction block Oct. 26.
The starting bid will be $7 million for the 522,088 square feet that were owned by Tennessee-based CBL Properties, the mall’s longtime part-owner and manager.
The outstanding debt is $64.2 million, according to Ten-X Commercial, which will conduct the online auction Oct. 26-28.
Attempts by CBL to restructure its debt failed, and a special servicer holding it “is looking to sell the existing note as soon as possible,” said Burnsville Mayor Elizabeth Kautz, who has been in touch with CBL officials.
CBL says it’s out of the picture now, according to Kautz. New York-based Spinoso Real Estate Group is managing and leasing the mall and has hired some CBL employees, she said.
The portions of the 1.1 million-square-foot regional mall owned by Seritage Growth Properties (the vacant Sears space), Macy’s and J.C. Penney are not part of the auction.
For the city, years of work to support redevelopment of the mall and surrounding retail area north and south of County Road 42 will continue, Kautz said.
“Whoever’s going to purchase will know when they do their due diligence that this site is targeted for redevelopment,” the mayor said. “The regulatory tools have already been adopted and approved, and the economic tools have already been put together. And the last piece of that toolbox is the tax-increment financing.”
The city will make a third attempt next year at asking state lawmakers for special legislation allowing TIF authority to raise funds for street and infrastructure projects and development incentives for Center Village. The area isn’t blighted, which would qualify it for TIF under state law, but is harmed by changing shopping habits, officials say.
“We’ll get there,” Kautz said. “I don’t give up.”
CBL announced in August it would cooperate with foreclosure proceedings for Burnsville Center and three malls it owns in Arkansas, Illinois and Ohio.
Two weeks later the company announced a debt restructuring and pending bankruptcy filing that would allow it to continue operating all its properties.
The auction is another “pivot on the road,” Kautz said.
In addition to tenant spaces and common areas, the portion for sale includes four outlots occupied by five tenants, including Jared Galleria of Jewelry and Verizon Wireless, according to Ten-X Commercial’s auction notice. Dick’s Sporting Goods, one of the mall’s anchor tenants, is also part of the former CBL property.
The mall is 87% occupied, according to the auction notice. It was built in 1977.
The notice alerts would-be bidders that the mall is part of a “redevelopment zone” slated to change from “purely commercial to mixed uses, which would include hotel, office, multifamily, education and medical uses.”