Park Plaza mall in Little Rock under foreclosure order

Park Plaza mall in Little Rock is shown in this 2013 file photo.
Park Plaza mall in Little Rock is shown in this 2013 file photo.

A foreclosure decree has been entered against the financially ailing Park Plaza mall.

Under the decree issued Sept. 8, Pulaski County Circuit Judge Alice Gray granted an $86.2 million judgment against the mall owner and granted immediate possession of the property to Deutsche Bank Trust Company Americas, the trustee of the holders of the original loan against the mall.

The 13-page order also said that if the judgment wasn't satisfied within 10 days, Deutsche Bank is entitled to sell the property in a judicial sale.

The foreclosure decree, first reported by Arkansas Business, came one month after the mall's owner, CBL Properties of Chattanooga, Tenn., had won approval of its bankruptcy reorganization plan, effective Nov. 1., one year after the regional mall owner filed for bankruptcy protection.

At the time of the approval, the company's top executive, Stephen D. Lebovitz, said "It's business as usual at CBL's properties."

Park Plaza might have been an exception. The mall, which was one of 107 owned CBL at one time, no longer is listed on the company website. CBL as much as told Deutsche Bank attorneys it no longer wanted the property and except for agreeing to a receiver, Fred Meno of the Woodmont Co., didn't provide a formal response to the foreclosure complaint filed in January.

"I have checked with Justin Jones to see if he intended to respond to the motion for default judgment on behalf of the defendant and he indicated he did not intend to respond," a Little Rock attorney representing Deutsche, Charles Coleman, told Gray in a letter.

Jones represented Park Plaza Mall CMBS.

The foreclosure stemmed from a $99.4 million loan the mall owner, doing business as Park Plaza Mall CMBS, LLC, obtained from Wells Fargo Bank on March 24, 2011. The loan later was assigned to Deutsche.

Park Plaza said in court papers that the property didn't generate enough income to make the required loan payments.

Woodmont, as part of its receiver responsibilities, is marketing available space for lease at Park Plaza on its website, describing the property as "the premier shopping center in Little Rock."

The decree was issued the same day a mall tenant, LensCrafters, indicated it plans to vacate the premises. The prescription-eyewear chain obtained a city permit to remodel existing tenant space across North University Avenue in the Midtowne Shopping Center at a cost of $300,000.

The mall covers 547,000 square feet, including two Dillard's locations that were not part of the sale. Dillard's owns its stores at the site, which is considered the Little Rock department store chain's flagship properties.

In a statement, Dillard's said it looks forward to working with the new owners, whoever they might be.

"We have a long, successful history at Park Plaza, and we are looking forward to working with the new owner to make it an even better destination," said Julie Johnson Guymon, the chain's investor relations director.

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