Northland Center is in danger of being shut down as its losses of $250000 per month continue.
Northland was opened during 1954 and was one of the first major suburban malls in the country. During last year, it defaulted on a $31m loan and the courts are now asking for permission to shut it down.
If permission is granted, the existing tenants will be served 30-day notices to vacate the premises, which means the mall could be empty by April or May. An attorney representing the court-appointed receiver, John Polderman, said the mall is insolvent and is not able to pay its basic expenses to operate the venue. He said that there are possible buyers for the property who may well keep it open. One of the potential buyers has been named as the City of Southfield. No comment was made by Southfield.
The center has been on a downward spiral for several years and the court filings indicate that it was losing almost $250000 per month. It will cost in excess of $6m to restore the center to a fully functioning mall. This figure excludes the $3m in unpaid bills that the center has amassed.
The owners of the property, a subsidiary of Ashkenazy Acquisition, New York, have been blamed for the demise of the center. They have not bothered to maintain the property adequately or committed to any investment in the property.
Ashkenazy’s legal representatives have objected to closing down the mall. They believe that this action will divest the community of a landmark and create job losses.
The main problems with the mall have been described as:
- No anchor tenants as they will all have moved out by next month
- High monthly expenses
- Failure to pay rent on time by the existing tenants
- Maintenance and repairs required by Northland Center run into millions of dollars