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U.S. Bank to pay $10.3M for mall

SOLD — The U.S. Bank, serving as a trustee for the lenders who held the mortgage for the Fort Steuben Mall, was the sole bidder Thursday afternoon for the property at a foreclosure auction in U.S. District Court in Columbus. The bank bought the mall for $10,333,333.34 or two-thirds of the most recently appraised value of the property. - Dave Gossett

STEUBENVILLE — Local officials were optimistic Thursday the new owner of the Fort Steuben Mall will breathe new life into the facility that opened for business in 1974.

The U.S. Bank, as a trustee for the lenders who held the mortgage note for the mall, was the only bidder at the foreclosure auction Thursday afternoon in U.S. District Court in Columbus and will pay $10,333,333.34 for the mall.

The Jefferson County auditor’s office reported the mall has a valuation of $39 million, generating $730,000 in property taxes a year. The mall was sold in May 2006 for $49.6 million and is among the highest taxpayers in the county. The mall encompasses 69 acres of land. The foreclosure sale was ordered in early February.

Attorney Richard O’Halloran said the bank “will now go through a confirmation process with the federal court to confirm the sale and the court will then issue a deed to our client.”

City Manager Jim Mavromatis and Law Director S. Gary Repella attended the auction along with Jefferson County Port Authority Executive Director Evan Scurti and several store tenants in the mall.

“The attorney who represented U.S. Bank made a bid offer and left as soon as the auction was concluded. I see the sale of the mall as a plus. The bank will have to do something with the positive and will probably look at several options for the future of the businesses,” reported Mavromatis.

“I believe we still have people looking at the mall. There is an opportunity there for businesses,” Mavromatis added.

“I introduced myself to the attorney representing the bank and said the port authority is very willing to work with the bank and its management team as far as a marketing strategy. We obviously hope we will see tenants moving into the mall,” said Scurti.

Mayor Domenick Mucci said he has been told the bank trustee management group will be seeking more tenants to fill the empty stores in the mall.

“They will analyze the mall and its needs and are committed to keeping the mall open. But part of the solution will be for local residents to shop local. We need to think about the local stores before we go elsewhere to shop for items that are available in Steubenville,” Mucci commented.

Jefferson County Chamber of Commerce Executive Director Trisha Maple-Damewood said the Steubenville community “is not alone in the country facing the reinvention of retail. It is happening across the country.

“I am happy the auction went the way it did and I hope the new management team that will be operating the mall can be creative, aggressive and willing to think outside of the box in order to keep the Fort Steuben Mall open and operating,” Maple-Damewood noted.

“The chamber of commerce has taken a great interest in retail during the past year. Any support we can offer to the mall will be very positive and supportive in any way we can make it,” she remarked.

The mall has faced financial strains in recent months with Sears, an original tenant, closing its store last June.

The Macy’s Corp. announced in January that 68 stores, including the Macy’s store at the Fort Steuben Mall, will close this spring.

According to Jefferson County property records, the Macy’s store property and adjacent parking lot is owned by the Macy’s corporation.

A financial website reported in May that the Fort Steuben Mall went into foreclosure in February 2016 and was being prepared for sale.

According to Trepp Talk, “the $37 million Fort Steuben Mall went into foreclosure on the heels of a transfer to special servicing in January. The loan is backed by a 821,996-square-foot mall that lists Wal-Mart, Macy’s and Sears as its main tenants combining for nearly 67 percent of the mall’s square footage.

The website said the mall’s loan was transferred to special servicing in January, “due to the borrower stating they will no longer fund shortfalls to cover debt service. The mall lost several tenants due to corporate bankruptcies causing the property’s occupancy to drop to 62 percent.”

(Gossett can be contacted at dgossett@heraldstaronline.com.)

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