Michael Staenberg, the St. Louis, Missouri-based developer known in Charleston for developing nearly two million square feet of Corridor G real estate, said he tried in May to buy Charleston Town Center mall.
CBRE — the real estate firm in charge of managing the facility after it went bankrupt — was obliged to take the highest offer for the property, which was purchased by The Hull Group of Augusta, Georgia, for $7.5 million. Staenberg said he offered $4 million.
“I wanted to redevelop it, tear parts of it down,” Staenberg said. “I wanted to tear down half of it, maybe put a park in, a bowling alley, indoor pickleball, maybe a Dave and Buster’s.”
Though Staenberg got outbid, it is still interesting to imagine the mall property going in another direction, eschewing retail pursuit. The Southridge area of Corridor G seems to have plenty of stores, restaurants and anything else a town of 47,000 could want.
“The reason I offered $4 million was because I knew I had to take care of the parking garages,” Staenberg said. “[Hull] didn’t take anything into consideration for the garages.”
That’s where the rub starts rubbing.
Sources close to the matter say Hull contends it has legally maneuvered its way out of that agreement, negotiating its way out of the garage upkeep before buying the mall. Using Hull as the operative search word, no such document could be found on file at the Kanawha County Courthouse.
Garage bondholders are not being paid despite their initial investment and are expected to argue that original owner Forest City Enterprise’s Joint Development Agreement, or JDA, extends to future mall owners. Any money collected from customers currently goes to address current maintenance needs, not the $5 million in deferred maintenance.
The April 30, 1982, Joint Development Agreement put the onus on Forest City to maintain the garages. The agreement stated that Forest City shall “at no expense to the [urban renewal] authority operate and maintain to the satisfaction of the Authority the Parking Facility, subject to mutually agreed upon controls and conditions to assure the availability of said Facility for short term parking for patrons and the public.” That document is on file at the Kanawha County Courthouse.
Hull’s deed of sale from May of this year includes a list of “permitted encumbrances,” two of which maintain the terms and conditions of the original 1982 agreement. Encumbrances are commonly defined as any claim against a property that restricts the ability to transfer property to another, or claims that burden or constrain an asset.
Another permitted encumbrance is adherence to the REA, or reciprocal easement agreement. According to the original REA, the easement agreement will provide for “the operation, maintenance and use of such parking facilities to provide parking for the Retail Center.”
The Hull Group did not comment on the parking garage issue.
In the meantime, safety concerns exist. In October 2012, a 20-foot by 30-foot concrete slab fell from the Quarrier Street garage’s sixth floor to the fifth floor. A piece of construction equipment fell with it. There were no injuries.
City officials said crews had been power washing the sixth floor for resurfacing, according to news accounts. The area had been weakened by water pressure used to remove the old surface, they said, and gave completely away with the weight of an 8,000-pound machine.
Staenberg said the parking issue aside, he doesn’t believe Hull has any particular plan for the mall. Hull owns 33 malls, largely in the Southeast. The Town Center appears to be its largest mall with a listed 66 occupants.
“They just don’t have [a plan],” he said. “I have watched them. You gotta have a plan, what’s going to benefit the city. They are now long-term holders of real estate.”
“It’s a tough piece of property,” Staenberg added. “I don’t know. I wish them well.”