Muncie Mall still paying taxes; why mayor is upbeat
Dan Ridenour says the bank is taking steps to sell the mall or already has someone in mind
MUNCIE — The Muncie Mall, facing public auction at a sheriff’s sale, continues to pay its local property taxes, though not as much as it did before being abandoned by its owner.
Meanwhile, Mayor Dan Ridenour is calling the upcoming auction “very good news.”
The reason? He says it’s a signal that the bank that foreclosed on the property “is either ready to sell the mall now to someone else who will come in and revitalize it or they already have somebody in mind.”
Wells Fargo bank filed a complaint for foreclosure of mortgage in 2020 after mall owner Washington Prime Group (WPG) defaulted on its loan and advised it would no longer cover operational shortfalls or make further debt payments.
WPG cited the pandemic and the shift of consumer behavior from shopping in brick-and-mortar retail stores to online channels.
In 2020, the mall was paying about $670,000 in property taxes. This year, it owes only $255,830, of which the mall already has paid $115,842 (the spring installment), county officials say.
According to Delaware County Treasurer Brad Polk, here is the mall’s recent property-tax payment history:
2023 paid $115,842 so far of $255,830 obligation
2022 paid $534,926
2021 paid $642,462
2020 paid $670,067
2019 paid $670,067
2018 paid $643,406
The mall’s tax bill was cut this year after its assessed value was reduced from $17 million in 2021 to $11.5 million in 2022 (compared to $21.6 million in 2018), said Delaware County Assessor James Carmichael.
“They filed an appeal last year based on vacancies and their profit and loss statements,” the assessor said. “Usually when there is a vacancy in a business we reduce their values, predicated on use. If they’re using it for storage or a warehouse that’s different than empty awaiting a lease.”
Fort Worth-based Woodmont Co., the mall’s court-appointed receiver, reported in January of this year that the mall was 58% leased (301,134 square feet) and 42% un-leased (217,358 square feet).
The report listed mall income of $2.8 million, operating expenses of $1.9 million, and net profit after capital expenses of $738,945 for 2022.
“Income is unfavorable due to several tenants filing bankruptcy and vacating the property during the year,” the report said. “Expenses are favorable due to the tax refund that was received in 2022 for multiple years. Capital expenses are favorable due to parking lot seal coat and roof replacement being deferred.”
Delaware County Auditor Ed Carroll said a refund of $76,194 has been issued to the mall in connection with the appeal.
A recent legal notice in The Star Press newspaper announcing the May 10 sheriff’s sale was taken by some in the community as a sign that the mall is on its last legs.
Ridenour says the opposite is true, calling it “some very good news” that the bank is finally taking legal steps to sell it.
The bank has been managing the mall (through Woodmont) for more than two years now, the mayor said in one of his recent online Community Updates.
“I know as a former banker that until those steps are taken and it’s in the name of the bank, they can’t sell it," Ridenour said. “So what’s exciting for me is the fact that the bank has now taken some of those steps to get the title into their name. These are some legal steps they must take … to get it into their name before they can get it to an investor. I feel they either are ready to sell the mall now to someone else who will come in and revitalize it or they already have somebody in mind.”
He estimated the transition to new ownership would take four or five months.
The mall now has 37 tenants, 28 of which are national companies or large regional ones on 10-year leases, the mayor said.
“So it’s not like they can just be kicked out without substantial compensation, and they all want to be here,” he went on. “The other nine are either local or smaller companies on three-year or less leases. So all 37 tenants are looking for those exciting opportunities when new ownership comes in.”
The city tried to help some prospective tenants who wanted smaller space but the bank “was not in a position or unwilling since they technically don’t own the mall to make repairs necessary to divide one space into three, so that fell through,” the mayor continued. “But there are tenants that want to be here. It’s really exciting to me that sometime this year this will either be sold and/or redeveloped, and having a new investor and new, fresh eyes and somebody coming in withe funds to do that revitalization will be very exciting for our city, so this is very good news.”
After his Community Update, the mayor told me, “I do not know of any official buyers at this time.”
In court filings, Woodmont Co. has identified multiple tenants who could move in.
The prospects include the Gabe’s discount chain; Burlington, a national off-price department store; Sky Zone Trampoline Park; Malibu Jack’s indoor fun park; Dunham’s sporting goods; Kohl’s Department Store; Crunch Fitness club; Ross; Daily Thread affordable fashions; and Jo-Ann crafts and fabrics.
The mall has lost anchors JCPenney, Sears, Macy’s and Carson’s, but still had many other tenants in the past year, including Zales Jewelers; Louie's Tux Shop; Shoe Department; Journeys; The Children's Place; Finish Line; American Eagle; Aeropostale; Rue 21; MCL cafeteria; Auntie Anne's; Books-A-Million; Country Charm; Bath & Body Works, and Buyer’s Market discount store, the receiver reported.
Delaware Circuit Court 5 Judge Thomas Cannon Jr. approved the public auction to compensate Wells Fargo, which obtained a $32.2 million judgment against the mall.
Previously, in Greater Muncie:
Muncie Mall to be auctioned at sheriff’s sale