A South Florida firm that initiated foreclosure proceedings in February against the owners of the Gateway Town Center has agreed to take over the Northside mall, according to court documents.
The mall’s owner, Gateway Center Economic Development Partnership Ltd., agreed to “surrender” the property to Gateway Retail Center LLC of Miami Beach, according to documents filed in U.S. Bankruptcy Court in Jacksonville.
Gateway Retail Center filed a foreclosure suit in Duval County Circuit Court in February against the mall’s ownership group after acquiring the mortgage note on the property from Wells Fargo Bank.
With that case still pending, the Gateway Center partnership filed for Chapter 11 bankruptcy on May 3. The partnership said in court filings that it filed for bankruptcy because of an “impasse” with Gateway Retail Center over its mortgage debt of $15.1 million.
Two firms controlled by developer Carlton Jones own about 70.7 percent of the Gateway Center partnership, court documents show. There are 21 limited partners.
Frank Keasler, an attorney representing Jones’ firms, said Jones agreed to the settlement to avoid a long legal battle over the property.
“It’s in the long-term best interests of the city of Jacksonville and particularly the Northwest community,” Keasler said.
The court documents do not give much information about Gateway Retail Center but state records show that the firm has the same Miami Beach address as Terranova Corp., a South Florida commercial real estate advisory firm.
Officials of Terranova did not respond to phone and email messages Tuesday.
Richard Thames, an attorney with Stutsman Thames & Markey who represented Gateway Retail Center in the bankruptcy case, said his client had no comment on the case.
Keasler said the new owners have not indicated their plans for Gateway, but they have deep pockets and will be able to further develop the property when the economy picks up.
“They have the means to weather the storm from today until then,” he said.
“They have acquired the asset, I believe, with a long-term view of carrying it to its ultimate fruition,” Keasler said.
The 577,000-square-foot shopping center, on 55 acres at 5000-7 Norwood Ave., was acquired by the Gateway Center partnership in 1997, the court filings said.
The mall had gross receipts of $2.62 million last year, according to the filings.
Attorneys for the Gateway Center partners announced the agreement to surrender the property at a May 16 bankruptcy court hearing and asked to dismiss the case. U.S. Bankruptcy Judge Paul Glenn agreed to the dismissal on that day.
Keasler said Jones deserves credit for keeping the mall going.
“Mr. Jones for the last two years has poured his life, his time and his finances to try to keep Gateway alive,” he said.
“A lot of developers would have called it a day,” Keasler said. “He did not want Gateway to go the way of a ghost town.”
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