published Wednesday, September 14th, 2011

Northgate Mall up for auction

Patrons enter Hixson's Northgate Mall in this file photo.
Patrons enter Hixson's Northgate Mall in this file photo.
Photo by Tim Barber.

ABOUT NORTHGATE MALL

Opened: 1972

Size: 823,014 square feet

Occupants: About 60 specialty shops and restaurants

Renovations: 1991, 1997

Leased space: 91 percent (includes outparcels)

Source: Auction.com

Northgate Mall's owner is trying to sell the nearly 40-year-old shopping center in a three-day online auction starting Monday.

The starting bid is $9 million for the mall and the surrounding properties owned by Chicago-based General Growth Properties, according to Auction.com.

Joe Janosko, the mall's senior general manager, said the shopping center isn't closing.

He said that putting the property up for sale is "part of the life cycle of a retail asset."

GGP, one of the largest mall owners in the United States, emerged from bankruptcy last November. In April 2009, the company had filed for bankruptcy in one of the biggest commercial real estate collapses in U.S. history.

Last month, GGP said it would spin off 30 mall properties totaling 21.1 million square feet into a newly formed company, Rouse Properties Inc., as it reduced its holdings to only large premier malls. Northgate was not one of the 30 properties.

David Keating, vice president of corporate communications for GGP, declined to comment on why the company wants to sell the Hixson mall.

"Other than confirming we are in the process of selling Northgate Mall, there's not much else I am in the position to discuss at this time," he said in an email statement.

The mall is listed by Auction.com as having 823,014 square feet, but minus the space held by department stores Belk, JCPenney and Sears, GGP has 380,393 square feet including outparcels such as five restaurants and the Carmike Cinema.

If the property sold for the $9 million starting bid, that would equal about $23.65 per square foot.

Some managers of stores in the mall said they'd like to see it upgraded.

"Most definitely," said Pam Beeler of Amy's Hallmark. "We need to play catch-up with Hamilton Place."

Jake Rolleston, manager of the Pac Sun store, said someone needs to invest in the mall and put a new face on it.

He said he hopes that the mall doesn't became like the former Eastgate Mall, which was turned into a combination of office and retail space.

Katie Reinsmidt of Hamilton Place mall owner CBL & Associates Properties Inc. said CBL will look at Northgate as it does most mall properties that come up for sale.

"I can't say we'd bid on it or not," she said. "We'd review the financials and prospects out there."

Some people at the nearby Hixson post office said Tuesday that they didn't care who owned the mall, but it was important it stay open.

"As long as they keep it open and keep the jobs there," said Michael Blevins of Chattanooga.

Susan Ross of Hixson said she'd like to see the mall remodeled and more eateries added.

The mall opened in 1972 and was developed by Arlen Shopping Center, a division of Arlen Realty and Development Corp., according to newspaper archives. Arlen was a firm from which CBL drew its founding group. GGP has held the mall for more than a decade.

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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nucanuck said...

With the middle class squeezed like never before, the US will need substantially less retail space. That translates into a wave of store and mall closures over this decade. The owners are smart to try to off-load Northgate Mall before their occupancy numbers get any lower.

September 14, 2011 at 7:22 p.m.
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