After hearing arguments Wednesday regarding the future management of the Gateway Town Center, Circuit Judge Frederick Tygart is expected to rule next week on whether an outside agent is needed to ensure a creditor receives payment.
Gateway Retail Center LLC, the owner of the promissory notes associated with the property at 5238 Norwood Ave., filed a foreclosure suit against the owners of the Gateway Town Center Feb. 9 in Duval County Circuit Court.
Gateway Retail Center followed with a motion Feb. 16 requesting the appointment of a receiver to assist in the recovery of loans made to Gateway Center Economic Development Partnership Ltd. totaling more than $15 million.
The Gateway Town Center is a shopping center on 56 acres and includes 14 buildings.
“I didn’t hear about the foreclosure filing until Feb. 17 and as a result of the media coverage WC Investments got really nervous, as any lender would,” said Carlton Jones, developer of the Gateway Town Center.
“It took me a week to get them to say ‘let’s start talking again.’ The new date of closing on the sale is March 15. Closings are very difficult, but it is moving forward,” he said at the hearing.
WC Investments lists its business address as 2323 Oak St. in Jacksonville. Fernando Acosta-Rua is listed as the manager.
The plaintiff has named Gateway Center Economic Development Partnership Ltd., Colbyco Enterprises Inc., Renaissance Design Build Group of Duval County Inc., Carlton D. Jones, Cal Development Inc., War on Poverty-Florida Inc., Gateway to Heaven Christian Center Inc., Colbyco Realty Inc., Wilson & Company Inc. and the City of Jacksonville in the suit.
Gateway Retail Center LLC claims that all three loans have been in default since July 19, 2011, and that it hasn’t received any payment from the defendants even though, it claims, the Gateway Center Economic Development Partnership has been collecting about $200,000 a month in rent.
The plaintiff also claims it is being harmed because of the partnership’s “failure to adequately maintain and market the property in a satisfactory or commercially reasonable way.”
The plaintiff also said that 125,000 square feet of property is vacant with no evidence of an effort to market the space.
It said the parking lot is in need of repairs and that trash and other forms of litter were noticed throughout the property. “Overall, the property is unsightly and in poor condition,” it said.
Jones’s son, Chris Jones, is responsible for marketing and sales at the Gateway Center. He explained why the buildings seem empty.
“The mall can no longer function as a retail destination,” said Jones, referring to the main building at the center.
“About three years ago we decided to change its use. Convert it into medical offices inside and move the retail tenants outside of the mall to the strip centers. That’s the reason it looks vacant,” he said.
The redevelopment has included tenants from the City of Jacksonville, including the Supervisor of Elections and Tax Collector offices.
Attorney Thomas Bishop of Tanner Bishop represented the plaintiffs at Wednesday’s hearing and was pursuing a receivership for his client, but was not against a sale of the notes to satisfy his client’s financial needs.
“If they have lined up a white knight that wants to negotiate in good faith and buy this property, I’m sure the white knight can do it,” said Bishop.
“We are here seeking receivership because they are not conveying the rents, they are not managing the property and the collateral of the loan is threatened.”
The plaintiff has requested that Heyward Cantrell be appointed as receiver of the property. His experience includes being appointed by the Circuit Court for 30 properties which have been the subject of foreclosure or bankruptcy proceedings.
The defense pointed to ongoing negotiations for a buyer of the notes to illustrate how well the property is being managed.
“There has been evidence heard by this court today that there is an offer to buy this paper that is being negotiated directly with the plaintiff in this case,” said Jeffery Wilkins, of the law firm of Wilkins/von Mertz of Tampa.
“That is a good indication of whether or not the plaintiff is properly secured,” he said.
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