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Fashion Square continues leasing in wake of Home Depot purchase

Even though Home Depot has signed agreements to purchase Fashion Square Mall, you won’t be buying two-by-fours or washing machines there any time soon.

Fashion Square is still doing business as usual, continuing with new tenants and leases, according to documents filed with the Albemarle County Planning Department. Mall officials have said retailers currently in the mall will continue with their leases.

Court documents obtained by Sean Tubbs, of Town Crier Productions, and shared with The Daily Progress show that the mall has new tenants slated to come into the shopping center while others may leave.

Among those coming into the mall is the Jefferson Area Board for Aging, which plans to open a 2,500 square-foot Medicare Insurance Counseling office in the mall’s south wing, next to the Eddie Bauer store.

“We’re glad to be able to offer in-person counseling for this open enrollment season and [we’re] grateful to the new landlord for working with us,” said Randy Rodgers, JABA’s insurance counseling program manager. “To be able to provide more people this important service, we needed a bigger space. And having this site at Fashion Square Mall, along with Zoom and phone appointments, we hope to be able to help several thousand people.”

Mall officials confirmed this week that Home Depot, the Georgia-based home improvement big box retailer with more than $150 billion in revenue, purchased the mall, with the exception of the women’s Belk store and the former JCPenney storefront. The mens’ Belk storefront, which is separate from the women’s store, is included in the purchase.

Home Depot’s national competitor, Lowe’s, has a retail outlet about a mile away from the mall.

Attempts to reach Home Depot for comment on the sale or plans for the mall have been unsuccessful. The purchase price has not been announced.

Home Depot and the local holding company that purchased the mall at a July 2021 foreclosure auction on the county courthouse steps entered into a sale agreement on July 8 of this year with a July 31 effective date, according to Tubbs.

Tubbs has been a reporter for local news organizations for 30 years. He now produces the Charlottesville Community Engagement newsletter and podcast.

On Sept. 2, the Charlottesville Circuit Court recorded three documents between Home Depot USA and Charlottesville JP 2014-CP, the holding company that previously owned it.

One of the documents is a Deed of Bargain and Sale with no clear sale price, and another is a detailed list of parcels affected. Another document releases Home Depot from a ground lease and sublease that governs the property.

That document references the bankruptcy of Sears, Roebuck and Company, which anchored one end of the mall and was part of the original operating agreement for the shopping center.

Sears declared Chapter 11 in U.S. Bankruptcy Court in 2018 and closed the Albemarle County store early the next year.

Online records at Albemarle County do not show an updated ownership of the mall. Those records often lag behind, however.

County assessor records show the land on which the mall sits is assessed at $8,796,000 as of Jan. 1. The building and improvements on the site are assessed at $7,329,900 for a total assessed valuation of $16,125,900.

The assessed value is what the county uses to determine tax bills.

In a separate transaction, Fashion Square Assets LLC, a company associated with developer Richard Hewitt, purchased the former JCPenney space on Sept. 10, 2020.

Earlier this summer, Albemarle County agreed to rent a portion of the space for use as a public safety center, including vehicle parking and bays for maintenance.

Albemarle County Fire Rescue maintenance crews would be at the site, and Albemarle County police will station the department’s traffic unit there.

The county will pay $3.1 million to refit the site and $558,000 for the first year’s rent.

The sale is the latest in a series of ownership changes for the once-bustling 570,000-square-foot indoor shopping center that has struggled for relevance in the wake of online sales and the pandemic.

Built in the early 1980s, the mall was once the moving force in retail sales in Central Virginia. Like other indoor malls across the country, its popularity faded as people switched to online purchases and many retailers left or went bankrupt between 2015 and 2021.

The mall was purchased by Simon Property Group in 1997. It was assigned to Simon’s spin-off company, Washington Prime Group, in 2014. The spin-off company held Simon’s strip center business and smaller enclosed malls. It merged with Glimcher Realty Trust in January 2015 and became WP Glimcher.

In late 2019, the mortgage loan secured by Fashion Square was transferred to special servicing after the borrower notified the lender that future projected cash flows will be insufficient to ensure future compliance with the mortgage loan.

After a request by Midland Loan Services, the special servicer for Fashion Square, a judge in March 2020 approved the appointment of a special servicer. In 2021, the mall was sold at auction back to the lender after defaulting on the loan.

Source: www.dailyprogress.com

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