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Foreclosed shopping center sells for $6.3 million
(by Joan Demirjian - August 18, 2010)
Foreclosed shopping center sells for $6.3 million
By JOAN DEMIRJIAN
A sheriff's sale Aug. 12 of the Shops at Marketplace shopping center in Bainbridge was the largest sale in Geauga County in foreclosure history, according to Geauga County Treasurer Christopher Hitchcock.
"The crowd filled the courtroom, and there was standing room only," Mr. Hitchcock said.
The winning bidder for the Aurora Road (Route 43) property was V&V Lakeshore Ltd., of Youngstown. The center sold for $6.3 million.
While the buyer has shopping centers and real estate in Ohio and other states, it is new to Geauga County. The company owns 20 other properties, and a majority are in Ohio.
V&V Lakeshore is a family-run business, according to owner Vincent Fond Jr. The company also is involved with V&V Real Estate Investment, which has been in the real-estate business, development and investing for 30 years.
Mr. Fond said the company will go over maintenance needs at the shopping center, which is about 3 years old, and getting additional tenants.
There is one small vacant store space, and the owner will be looking at an additional 150,000 square feet of store space to be built.
"It draws from a wide area, and it is a very attractive and well-laid-out center," Mr. Fond said, although it needs some fine-tuning.
At this time, he said, the company is not interested in the vacant former Geauga Lake Park land, which is adjacent to the shopping center.
The Shops at Marketplace, on the north side of Aurora Road, was the second phase of the Marketplace at Four Corners, which is on the south side. The property includes 59.54 acres and is made up of eight parcels. Three parcels are still vacant. Currently, there is 110,000 square feet of roof space.
US Bank National Association had filed a foreclosure on the property.
The shopping center had over $30 million in liens filed against the property, according to Mr. Hitchcock. However, back real-estate taxes had been paid up prior to the sale, he said.
Bidding started at a minimum of $4,533,334 on the property that had been appraised at $6.8 million by the Geauga County Sheriff's Office. The sheriff hires an outside appraisal firm, Mr. Hitchcock said.
"The property sold for close to its value," he said. The only other bidder was the bank, Mr. Hitchcock said.
He said he had expected the foreclosure to be withdrawn at the last minute. "Normally, with this value, it ends up being withdrawn," Mr. Hitchcock said. "I was surprised it went through.
"It's very good for the county," Mr. Hitchcock said. "It's no longer in litigation, and the new owner can move forward with developing the property and marketing his investment."
Former owner John McGill, of MPG Property Group, of Florida, said the shopping center "will be fine. The foreclosure had nothing to do with the viability of the center.
"The foreclosure had to do with the construction loan maturing. The bank did not want to extend it and decided it wanted to cash out the property," Mr. McGill said.
When developing a shopping center, land is bought up front, he said. "We had to put in roads, signaling, extend the utilities and put in parking lots."
The company also had to buy land in Solon to meet Bainbridge Township's requirement to remain at a specific lot coverage for the development.
Target and Home Depot own their own parcels at the center, as does the Steak and Shake restaurant, so they were not part of the sale. A Chick-Fil-A restaurant has yet to be built on its own property.
"I can't fault the banks," Mr. McGill said. "They acted within their rights to cash out of the project. I never fought the foreclosure, and it had nothing to do with the viability of the center."
On the south side of Aurora Road, Marketplace at Four Corners is doing well, he said. "We are leasing, and the sales are good."
Bainbridge Shopping Center II LLC, which oversees the shopping center, is now based in Florida.
"That center is doing well, and sales are good," Mr. McGill said. A Five Below store is opening where the former Linens and Things store closed. Another 27,000 square feet of that space is to be occupied by another business, he said. At another store strip in the center, AT&T is expanding into the former Ink Stop space, and a 4,000-square-foot restaurant is preparing to open in the same building.
"The viability speaks for itself," Mr. McGill said. "Everybody on the south and north sides are on solid ground. It's a positive thing and a great mecca for shopping."
The shopping center sold on the north side is included in a joint economic development district involving Solon and Bainbridge.
Taxes are collected on wages of employees at the businesses and shared by the two communities.
Bainbridge Trustee Jeff Markley said the JEDD is generating income to the township, "and hopefully that will continue."
When the shopping center was built, there was an agreement that the developer would provide office space for the Bainbridge Police Department to process arrests made in the area.
That has not come to fruition. A space provided did not meet the needs of the police department, Mr. Markley said. It will be up to the police department now to work out those issues, he said.
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