Georgetown Mall deadline passes; foreclosure in effect but 'pending litigation' raises questions
Few answers have emerged about the future of Ann Arbor's Georgetown Mall after the tax foreclosure deadline passed at 4 p.m. Wednesday.
The mall's owner - Harbor Georgetown LLC - didn't make the $512,000 payment required to stop the foreclosure of the shuttered shopping center on Packard Road.
Georgetown Mall on Tuesday morning.
Paula Gardner | AnnArbor.com
However, it's unclear whether there is a new deadline in effect for the property or other negotiations are under way.
Representatives in county Treasurer Catherine McClary's office confirmed the payment wasn't made. However, McClary wouldn't answer specific questions about the future of the property Thursday or today. In an email, she said "there is additional pending litigation."
Craig Schubiner, managing partner of Harbor Georgetown LLC, declined requests for interviews. In an email, he said, "We anticipate the property taxes will be paid by May 21."
McClary has said her office sought the tax forfeiture on the property based on unpaid taxes dating back to 2006 and 2007.
The property is valued at $4.6 million, based on its 2010 state equalized value.
A search of federal courts show lenders for the mall appear to be tied in a complex legal tangle dating back to 2007 and involving several lawsuits, countersuits and appeals in a Nevada courtroom.
No recent filing for Harbor Georgetown turned up in a search of Washtenaw County Circuit Court records.
Comments
Chase Ingersoll
Thu, Apr 15, 2010 : 3:51 p.m.
Is anyone with knowledge of any of the environmental issues remaining from the dry cleaning plant that was operated at the Mall for all of those years? Might that be a factor in why there seems not to be much interest in the property?
eastsider
Tue, Apr 6, 2010 : 1:48 p.m.
I'd like to see more information about this property. There was the proposed "auction" of the property years ago that never came to pass. There are the repeated promises by Schubiner that the taxes would be paid (how many promises is that now?) AA.com should put together a history of this property since the tax/legal/no maintenance trouble began, and we would all have a much better picture of this neglected area.
Brad
Sun, Apr 4, 2010 : 9:06 a.m.
Bring in the bulldozers and grass seed! What an eyesore!!
Stephen Lange Ranzini
Sat, Apr 3, 2010 : 1:44 p.m.
@logo selectively quotes one statistic and ignores the main point of my post which was that my bank had to waste $30,000 to get an initial assessment dropped on a property we bought for $1.7mm from $2.7mm to $2.0mm despite providing a certified commercial appraisal with all appropriate comparable sales indicating a value of $2.0mm. The assessor justified overcharging us $700,000 on the assessment by the fact that there was substantial RETAIL development going on down Washtenaw Avenue at the Whole Foods and at the site of the empty lot across the street from Whole Foods that never did get built on. Of note is the fact that our building is commercial office (not retail), so why was he citing retail comparables to me??? My point is that anything remotely related to retail he was over-assessing and the citizens charged to be his watchdogs to keep the process honest were asleep. I hear many similar stories around town; I'm only using our own case as an example to discuss this problem publicly. I'd like AnnArbor.com to research how many tax appeals are currently pending in Ann Arbor in the Michigan Tax Tribunal. Obviously, the property purchased by Harbor Georgetown had a long term anchor lease from Kroger when purchased in 2001 and so a major decline in value would occur once Kroger walked out and no replacement tenant stepped up. If the decline in value were only 23% to $4.7mm, the property wouldn't be tax foreclosed. As noted by several posters, the property may now be worth only land value and there is very little market for development land today.
thurber
Sat, Apr 3, 2010 : 12:27 p.m.
Tip of the iceberg. But at least our government officials can go right on drawing pay and benefits packages, with AVERAGE city employee compensation in excess of $100,000. Not just salaries and pensions, even now the city pays top dollar for greenbelt properties, the county can put up a $1 million skate park.
logo
Sat, Apr 3, 2010 : 12:27 p.m.
The numbers quoted by Mr. Ranzini actually dispel the notion that commercial properties are over-valued by the assessor. The property was purchased in 2001 for $6.1 million and it is now valued at $4.7 million by the assessor. That's a drop of 23% and unless there are supporting comparable property sales showing a larger drop in values for commercial properties in that area, I don't recall any sales, it appears the assessor is doing his job correctly.
Val Losse
Sat, Apr 3, 2010 : 10:46 a.m.
Property taxes do not represent the ability to pay them. If a developer buys the property he will first have to pay the property taxes. Will that be the nearly 1.5 million dollars owed over three years or will there be additional taxes? So what do you think? Why would any developer in his right mind buy this property when he is in the hole for 1.5 mil to 2 mil to start out. We need a park in that area sigh z nice fountain the middle.
CycloChemist
Sat, Apr 3, 2010 : 10:43 a.m.
Neighborhood residents are just fed up with this whole deal. We feel powerless and we feel like victims. This mall wasn't so bad 10 years ago, and 20 years ago it was an amenity to the neighborhood. When I moved here it was on the way down, and to me it looked like neglect. The remaining few shops were effectively chased out by Schubiner, and now the carcass of the dead mall is rotting in our backyards. We'd like to see some creative entrepreneur take over this property and bring it back to life! But right now we feel powerless and victimized. This is a real chance for government officials to step in and show how responsive, good government can work. So, Ms Treasurer McClary, while you have to protect your legal position, please don't neglect your constituency.
Stephen Lange Ranzini
Sat, Apr 3, 2010 : 10:16 a.m.
I agree 100% with John Alan's comment! I just checked the online assessment of the property and it is valued by the city assessor at $4.7mm with an SEV of half that. Who in their right mind would pay $4.7mm for that property? According to an Ann Arbor News archive article at http://blog.mlive.com/annarbornews/2008/07/georgetown_mall_site_moves_int.html : "According to county records, Harbor bought the property in 2001 for $6.1 million. Its 2008 state equalized value is $3.5 million, meaning assessors peg its market value around $7 million. Washtenaw County Treasurer Catherine McClary said a total of $484,798 is also due in 2006 and 2007 taxes." In my experience the City Assessor has a history of assessing commercial properties (particularly what he considers retail properties) too high and the citizens on the review board don't stand up to him. This results in a huge number of lawsuits to the Michigan Tax Tribunal. In University Bank's case we wasted $30,000 on legal fees in the Michigan Tax Tribunal before the assessor was willing to properly assess the property in dispute and the assessed value of the property was reduced from $2.7 million to $2.0 million, same as the commercial appraisal we give him and the review board before the dispute started. I do believe that investment is chased out of Ann Arbor by this type of negative experience. When Ann Arbor was wealthy our leaders could afford to be arrogant in this way, but not any longer!!
Diagenes
Sat, Apr 3, 2010 : 9:21 a.m.
Unfortunately this property will remain as is, for many years. It will be very expensive to raise the buildings and reduce the slope of the property. Ann Arbor's high property taxes and planning process will scare developers. Until the city and state create a climate that encourages private developers to invest their own money in projects that will turn a profit, Georgetown Mall and others like it will remain empty.
Richard C
Sat, Apr 3, 2010 : 9:18 a.m.
Don't hesitate to foreclose. Fear of foreclosure only lets legal tricks and delays grind the property and surrounding area into the dust. Detroit took decades to decide to foreclose and demolish, when taking care of the situation promptly might have let the city recover. Ann Arbor and Washtenaw County don't owe anything to absentee landlords tied up in foolishness in Nevada. We're not going to get anything out of them, and we're better off cutting our ties to their implosion.
AAJoker
Sat, Apr 3, 2010 : 8:45 a.m.
This mall has long been unattractive and unmarketed. It's closure has nothing to due with taxes, instead it's the fact that you could drive by and not even notice it's there! It would truly benefit from leveling and starting over or planting trees as suggested above. What we cannot have is the inaction for years as seen at Michigan Inn.
John Alan
Sat, Apr 3, 2010 : 7:39 a.m.
The way that city of AA taxes commercial properties way too high, Michigan Inns are going to be all over the town.... There is no point of doing much since property tax for commercial buildings are totally un-realistic and out of hand.. I guess this is just TIP OF THE ICEBERG!!!
Henry P.
Fri, Apr 2, 2010 : 7:51 p.m.
This shopping mall just CANNOT become another Michigan Inn/Wall Street Restaurant... I hope that it gets leveled to the ground, and that someone builds something new and attractive, or at least plant trees like they did for the Michigan Inn...