Downtown mall was put up for sale in January
Norfolk City Council will discuss acquiring the struggling downtown MacArthur Center mall for $18 million during a special meeting in June 2023.
The mall is owned by Wells Fargo & Co., which holds the mall following a loan default by the mall’s previous owner, Connecticut-based Starwood Property Trust.
The mall was listed for sale in January by JLL, though no price was listed at the time and no buyers materialized.
The agenda for the special meeting includes an ordinance ratifying an operating agreement between MacArthur Center Acquisition LLC and the city. It also seeks approval from the council to ratify a consulting agreement between the city and GEI Advisors Inc., a consulting engineering and environmental firm.
A sale price for the mall is not listed, but the agenda also includes an item seeking council’s approval to appropriate a total of $18 million for the purchase: $12 million from the city’s unassigned general fund balance reserve, up to $3 million from its capital improvement fund and up to $3 million from the land acquisition fund.
The most recent assessment of the mall was about $25 million — about $20.7 million in land value and $4.2 million in improvement value, according to city records. That’s down significantly from its July 2022 assessment, when it was valued at $51.8 million, including $24.8 million for the land, according to city records.
The mall is now 62% vacant, according to JLL. Starwood Property Trust bought the mall in 2014 for $265.5 million from Michigan-based Taubman Centers Inc., as part of the $1.4 billion purchase of seven shopping malls. However, Starwood defaulted on a $750 million loan in 2019, and MacArthur Center is now owned by Wells Fargo & Co. and managed by Syracuse, New York-based Spinoso Real Estate Group. The city owns the land the mall sits on at 300 Monticello Ave. and has a leasehold interest.
The 23-acre mall property includes 914,751 square feet of leasable area. Current mall anchors are Dillard’s Inc., with 253,616 square feet, and Regal Cinemas, with 80,210 square feet. Another 160,000-square-foot anchor spot is vacant. Those three anchor spaces account for 493,826 square feet, or about 54% of the total space at the mall, which also has a multistory parking garage with about 4,000 spaces.
Built in 1999, the mall has lost many of its tenants, including anchor Nordstrom in April 2019, after 20 years. An Apple Store left in 2021 and more recently, restaurants Texas de Brazil and California Pizza Kitchen departed.
Virginia Business – Published June 6, 2023 by Robyn Sidersky