Mortgage lender pushes for sale of DeSoto Square mall after owners miss payments
COVID-19 bought the owners of DeSoto Square mall, 303 301 Blvd. W., a little more time, thanks to an executive order by Gov. Ron DeSantis staying eviction and foreclosure actions during the pandemic.
But lender Romspen U.S. Master Mortgage LP, a Cayman Islands limited partnership, is seeking to set a foreclosure sales date, saying the mall’s owners have failed to make any of the payments on a nearly $30 million debt that they agreed to pay in January.
DeSoto Owners LLC and Meyer Lebovits failed and/or refused to make the required payments and are in default under the terms of the partial settlement agreement, according to the motion filed June 29 to set a foreclosure sales date.
Under the terms of the agreement reached on Jan. 30, the mall owners agreed to pay $1.5 million to the lender within 90 days and another $3 million no later than June 1, with the money going to pay down interest.
If a total of $4.5 million was not paid as agreed, the foreclosure sale would be held June 3. If the $4.5 million was paid according to schedule, the foreclosure sale would have been set for Sept. 30.
That was before the pandemic hit, and DeSantis issued an executive order on April 2, suspending foreclosure actions for 45 days. Subsequently, DeSantis extended the suspension twice more, with the most recent extension coming late Tuesday night, when he set a new deadline of 12:01 a.m. Aug. 1.
In its motion filed June 29, Rompsen says that “it is becoming apparent that the DeSoto Defendants ongoing end-game is to simply delay the inevitable foreclosure sale of the DeSoto Square mall.”
Attorney Ron Gache, representing the mall owners, has argued that Meyer Lebovits has spent more than $8 million of his own money to buy the mall property, $2 million on mortgage payments, more than $4 million for facility improvements, and about $500,000 to architects, planners and vendors for a plan to redevelop the mall.
Immediately after the Jan. 30 settlement, the mall owners set out to get financing to pay Rompsen, and also agreed to sell a portion of the property for $12 million, Gache said during a phone conference in May. Due to the pandemic, they were unable to do either.
In its June 29 filing, Romspen said that the DeSoto Owners “have not tendered any amounts whatsoever of the agreed consideration for the extended sale date and have, through the sheer passage of time, managed to extend the June 3 sale date without paying anything.”
Rompsen said it has not received any payment from the mall owners since April 2018.
“The DeSoto Square Mall is worth significantly less than the underlying $30 million indebtedness, the DeSoto defendants are not maintaining the property and losing tenants, all compounded by the DeSoto defendant’s outrageous reliance and exaggeration of the pandemic’s effects on their investor funding,” the Romspen motion said.
The latest blow to the mall’s bottom line came in early June when JC Penney, which filed for Chapter 11 bankruptcy in May, announced that it had permanently closed its Bradenton store, along with 153 others nationwide.
JCPenney was one of the original anchors of DeSoto Square mall, when it opened in 1973.
The Bradenton JC Penney store closed in March under a governor’s executive order closing retail stores to curb the spread of COVID-19. After DeSantis partially lifted the order in May, the store remained closed.
Romspen now requests the court reject the extensions sought by the mall owners and set a foreclosure sale date immediately.
A dial-in telephone hearing on the request has been set for 2 p.m. July 14.
