By David J. Harvey
The Shops at Atlas Park was sold at auction on January 28 at Queens County Supreme Court, and the buyer will soon take ownership. The winning $53.7 million bid for the property was submitted by a newly-formed group called WMAP, LLC.
Little is yet known about WMAP, apparently formed for the purchase, except that Walton Street Capital, a Chicago based investment firm, is a member. Walton Street Managing Principal Eric Mogentale said the company does not publicly comment on its investments. Macerich, the owners of Queens Center Mall, will be in charge of managing the shops at Atlas Park after the sale is complete on February 28.
Atlas Park, formerly owned by the Hemmerdinger family, had been under foreclosure for nearly two years. The financier, Société Générale, was still owed $119 million at the time of the sale. The Hemmerdingers had created Atlas Park, LLC for the original property purchase and can’t be held person- ally liable for the balance of the debt owed on the mall.
The sale is expected to close within 30 days of the auction and will leave Société Générale at a significant loss. Société Générale spokesperson Jim Galvin did not return a request for comment.
According to auction referee Denis Cap- pello, the opening bid of $50 million came from a group that had partnered with the bank, which had revealed Société Générale’s willingness to sell for much lower than the debt owed.
“If the bank was going to say listen, we want $119 million or we’re just going to take it over ourselves a lot of people would probably just walk away,” he said. “When they started at $50 million, I was somewhat surprised that they were willing to go that low.”
Cappello said he had expected the bidding to reach up to $70 million, and that there would be more bidders. After the opening bid, Capello set the bidding increment at $250,000 and only two parties—the one partnered with the bank and WMAP—went back and forth up to $53.7 million.
“When we got past $53 million and I had to start closing the bidding, I was surprised,” he said.
While there remains uncertainty about the future of the Glendale shopping center, the
involvement of Macerich was seen as a promising sign.
Additionally, Walton Street has been heavily investing in mall properties. In June 2010, Walton Street set up a $300 million refinancing for a mall property in Colorado it originally invested in back in 1999, The Streets at SouthGlenn, an open-air town square-style mall with joint residential properties. In December, Walton Street purchased the Simi Valley Town Center in California, which came with a $112 million mortgage.
Walton Street Managing Principal Neil G. Bluhm told the New York Times in 2009 that his firm was prepared to begin heavy investment in the Northeast and in California. He said the recession had caused a lull in real-estate speculation, but that he planned to spend $1.5 billion over the next few years on property in Boston, New York, Los Angeles and San Francisco. Bluhm said he hopes for annual returns of 20 percent.
Currently, the struggling Atlas Park has no such potential. Kathy Masi of the Glendale Civic Association said the community is thrilled that Atlas Park finally has an owner, and welcomes the connections to the more successful Queens Center Mall. Masi said she hopes the success of Queens Center will come to Atlas Park under dual management. Councilwoman Elizabeth Crowley, who has worked to bring new life to Atlas Park for years, said she is looking forward to revitalizing Glendale’s shopping mall.
“The community welcomes the new leadership with open arms and is eager to help Atlas become an engine for economic growth. I will be meeting with Macerich this week and other stakeholders including civic groups in the coming weeks and months to make sure this shopping center works with the community and the residents I represent."
Cappello also said he is eager to see Atlas Park transformed. He said his wife often shops at Atlas Park, and the night before the auction, they ate at the mall’s California Pizza Kitchen.
“In this business we get caught up in the numbers, but when I see a closed store over there and that the people who worked there lost their jobs, it’s a concern. Living in the area, I would like to see it move along and see better times.”