Date set for DeSoto Square mall foreclosure sale. COVID-19 could force a delay
Once again, DeSoto Square mall, 303 301 Blvd. W., has a foreclosure sales date.
Circuit Court Judge Charles Sniffen set Aug. 26 as the sales date, during a dial-in telephone hearing Tuesday afternoon with Murray Silverstein, attorney for lender Romspen, and Ron Gache, the attorney representing the shopping mall’s owners.
COVID-19 and possible future executive orders by Gov. Ron DeSantis could cast a cloud over whether the sale actually takes place on Aug. 26.
In January, the mall’s owners and the lender reached a settlement that until now has staved off a foreclosure trial. Under the January settlement, the mall owners agreed to pay $4.5 million no later than June 1. If the $4.5 million was not paid as agreed, the foreclosure sale would have been set for Sept. 30.
The COVID-19 pandemic and executive orders by DeSantis intervened, putting foreclosure actions and evictions on hold until Aug. 1.
April of 2018 is the last time that the lender received any payment from the mall’s owners, with about $30 million still owed on the property, including principal and interest, Silverstein said.
The lender even had to step forward to pay $300,000 on a liability insurance premium for the building, Silverstein said.
“The mere passage of time has allowed the DeSoto Square defendants to get what they wanted without paying anything,” Silverstein said. “We are asking for a sales date any time after Aug. 1.”
Gache, attorney for the mall’s owners, responded that his clients attempted to secure financing and sell off a portion of the property after the January settlement had been reached, but that the pandemic thwarted those efforts.
Gache disputed Silverstein’s claim that mall owners were allowing the property to go to ruin by saying that they have spent hundreds of thousands of dollars on redevelopment plans now awaiting county approval.
“Nobody could foresee the future. To say that we breached our promise is unfair. We aren’t leading you on,” Gache said.
Mall owners don’t have the ability to pay the $4.5 million now, and it will probably be late October or early November before Manatee County government approves the redevelopment plans for the mall, Gache said.
Silverstein responded that the mall owners are essentially staving off the inevitable with “pie-in-the-sky” plans.
“We just want to get paid,” Silverstein said.
In setting the Aug. 26 foreclosure sales date, Sniffen said that he was not looking to violate any order from the governor or chief judge, acknowledging that the pandemic could continue to upset the best-laid plans.
The redevelopment plans proposed by mall owners would take place over a 10-year period, and would include demolishing most of the existing buildings. In their place would be 128,514 square-feet of retail-lifestyle space, a 40,000 square-foot grocery, 90,000-square-feet of office space and three retail outparcels totaling 16,250-square feet. Also planned are about 900 residences of different types.
The owners of the mall purchased the property in April 2017 for $22,850,000 and still owe $21,789,102, according to the foreclosure suit filed by Rompsen in 2018.
