Muncie Mall to be auctioned at sheriff's sale
'It was good to hear and feel so much life going through our Mall,' but then ...
MUNCIE — The Muncie Mall regional shopping center is scheduled to be sold to the highest bidder at a sheriff’s sale several weeks from now.
Delaware Circuit Court 5 Judge Thomas Cannon Jr. approved the public auction to compensate Wells Fargo Bank, which obtained a $32.2 million judgment against the mall.
The bank filed a complaint for judgment and foreclosure of commercial mortgage in 2020 after the mall defaulted on a loan and advised it would no longer cover operational shortfalls or make further debt payments.
The sheriff’s sale is set for May 10 at 10 a.m. in the Delaware County Justice and Rehabilitation Center.
One-time mall owner Washington Prime Group (WPG), a real-estate investment trust, transferred the mall’s $33.1-million mortgage to a special servicer in 2020, when a receiver was appointed to manage and lease the facility.
The following year, Columbus, Ohio-based WPG filed for chapter 11 reorganization bankruptcy, citing “a resurgence of Covid-19 during fall 2020 and winter 2021 and the shift of consumer behavior from shopping in brick-and-mortar retail stores to online channels.”
Muncie Mall was built in 1970 on a 53-acre site.
WPG, a shopping center real estate investment trust, was spun off by Simon Property Group in 2014, when WPG borrowed $37 million to acquire the Muncie Mall.
Fort Worth-based Woodmont Co., the mall’s court-appointed receiver, reported to Judge Cannon 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.”
A tenant delinquency report identified 18 delinquent tenants, attributed to factors including prior year reconciliation, a tenant’s rent check returned for non-sufficient funds, a late payment, a tenant short-paying resulting in a default notice being sent, audits, and working with a new contact.
When Christmas came in 2022, “the stores and center filled with the buzz of hustling and bustling of shoppers,” the report went on. “Each passing day that drew us closer to Christmas brought with it an increase of excitement from everyone; tenants and customers alike. It was good to hear and feel so much life going through our Mall.
“Then came the last couple days before Christmas when sub-zero temperatures hit our region. Shoppers attention became distracted from preparing for Christmas to preparing for ice, wind and snow. We had to close the Mall early, and had a late opening on Christmas eve due to bad weather.
“Despite the setback from the Wintry Blast, some of our shops saw significant increases of sales. This was especially true with Aeropostale . . . “
Tenants whose sales surpassed $1 million for the year were Zales Jewelers, Shoe Department, Finish Line, MCL Cafeteria, Books-a-Million, and Bath & Body Works, according to the report.
Bankruptcies affecting the mall in recent years included CJ Banks, Christopher & Banks, Francesca’s, JC Penney, Justice, Lane Bryant, Pink, and Sears.
At the sheriff’s sale, Wells Fargo will be permitted to bid up to the amount due under the loan documents, with the proceeds to be applied to the cost of the sale, and then to the amount due to the bank.
Previously in Greater Muncie:
I am saddened by this news.
The Muncie mall was a so call hang out for so many of us back in the 90’s. Some of my lifelong memories were spent there in my youth and even more as an adult shopping with/ for my children. Christmas was the best for us because we we’re getting our holiday shopping done within one building Safe from the cold weather and taking in all the beautiful decorations that filled the halls for our enjoyment as well as the special feeling that comes during the Christmas season. My kids and grandchildren have visited Santa and the good ole Easter bunny in this beautiful mall. Such good times were had for us all! Im saddened to think that those days could be over for generations to come. So many memories and happiness lost for so many !
Online shopping is killing the in person experience for so many and keeping everyone at home instead of going out and socializing and enjoying being off of devices and engaging in activities with family and friends!!
We need to FIX THIS! 😭
I fear the Muncie Mall will soon look like the empty, decaying Anderson Mall, Indy's Lafayette Square Mall and others. In reference to your recent excellent article on Marta Moody, whose visionary efforts for a sane approach to developing McGalliard Road were largely ignored, the Muncie Mall will be the largest visible and financial scar on the city's northeast side. Will any lessons be learned here?