Circuit Judge Frederick Tygart issued a decision Tuesday on the management of Gateway Town Center, denying the plaintiff’s request for receivership but ordering that rents be paid into an account to pay reasonable expenses.
The plaintiff, Gateway Retail Centers LLC, owns the three bank notes that represent about $15.1 million in loans made to Gateway Center Economic Development Partnership Ltd. for improvements to the Gateway Town Center.
The shopping center sits on 56 acres and includes 14 buildings off Interstate 95, north of Downtown along Norwood Avenue.
The loans defaulted in July 2011 and Gateway Retail Centers LLC filed a motion Feb. 16 for the appointment of a receiver in an attempt to collect the money owed on the loans.
“From the evidence the Court finds that the subject property is challenged by the present economic climate and demographics which has resulted in a high vacancy rate, particularly on the interior of the mall,” stated Tygart in his response to the request for a receiver.
“In order to meet these challenges the defendants have instituted a marketing strategy to move retailers from the interior of the mall to the exterior so that the interior mall may be marketed for use as medical facilities,” he wrote.
Tygart also recognized the investment the tenants were making in the new marketing plan.
“In fact several retailers have moved from the interior of the mall to the exterior and have invested substantial sums of money to complete necessary build-outs,” wrote Tygart.
He found that the case did not “justify the extraordinary remedy of receivership,” but did agree that the assignment of rents clause in the loan documents did support sequestration of rents into an escrow account to pay “the reasonable expenses to protect, preserve and operate the subject real property, including, real estate taxes and insurance.”
Property taxes haven’t been paid since 2008.
Carlton Jones, the developer of the property, is hopeful that a sale of the property will close soon and satisfy the notes.
“Our main focus is closing on the property at this point,” said Jones.
That sale could help address concerns of tenants from the City of Jacksonville, which are the Supervisor of Elections and Tax Collector.
“We are waiting to hear if that ‘white knight’ is going to come in and buy the property,” said Jerry Holland, Duval County elections supervisor.
Jones stated during a March 7 hearing in Tygart’s chambers that he was working with WC Investments on the sale of the property and was hopeful for a closing in March.
356-2466