Regional Report Charlotte June 2010

 In 2010-06

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Mall tells tenants: Everything must go 

Behind the scenes, a high-stakes game of chicken unfolded for nearly three years. The city of Charlotte calculated that the owners of Eastland Mall (cover story, October 2009) would swerve and take $7.4 million for what was once the state’s premier enclosed mall, now less than half full and bereft of its anchors. The owners, on the hook for a $42 million mortgage, bet that harried city politicians were so desperate to pump up the city’s sagging east side that they would veer and increase their offering by millions.

Neither side gave, and in late April, lender-turned-owner LNR Partners Inc. abruptly steered the mall into foreclosure. “Now, we’ll just have to let them go bankrupt and see what happens,” says Susan Burgess, a City Council member and chairman of its Economic Development Committee. “Obviously, we made them an insulting offer. Nobody bit.” A spokeswoman for Miami Beach, Fla.-based LNR declined to comment.

The company notified tenants — about 50, most of them mom-and-pop shops — they have until June 30 to vacate and warned them not to expect another reprieve. Owners had hinted since 2005 that they might close the mall, but many interpreted the threats merely as pressure on the city — with good reason.

Burgess says more was at stake than the fading, 1.1 million-square-foot, 35-year-old mall, once the state’s largest and the first to feature a food court and ice-skating rink. The city had proposed tearing it down and using the 100 acres beneath it for a mix of retail, residential and business uses. It would have become the terminus of an eight-mile streetcar line from downtown, triggering hundreds of millions of dollars of development along the way.

Council member John Lassiter came up with the $7.4 million offer, expecting LNR to negotiate. Real-estate sources say LNR’s bargaining position might have been strengthened by a slowly rebounding economy and commercial-properties market. It might have been a bluff, says Bob Finley, a finance professor at Queens University and a consultant. But maybe LNR is hoping some developers outbid the city.

In that scenario, the mall could end up with a more agreeable owner than LNR — and that owner might end up dealing with a more agreeable council. An improving economy could boost the chances that the site is redeveloped in partnership with the city, as planned all along. Burgess is still hopeful it will happen. “But it’s going to be a while.”

Charlotte-based Bank of America continued its makeover by filling key positions with a newcomer and an outsider. Former DuPont CEO Chad Holliday took over as chairman from Walter Massey, who retired from the board. Holliday has been a BofA director only since September. Charles Noski, former chief financial officer at defense contractor Northrop Grumman and telecom giant AT&T, became CFO. He replaced Joe Price, now president of consumer, small-business and card banking.

CHARLOTTEBelk returned to profitability in the fiscal year ended Jan. 30, reporting net income of $67.1 million compared with a $213 million loss the previous year. Tim Belk, chairman and CEO of the department-store chain, received total compensation of $1.7 million, up from $1.4 million.

CHARLOTTE — The state Supreme Court barred former Mecklenburg District Judge Bill Belk from returning to the bench. Belk, cousin of the department-store chain’s CEO, resigned in November after being accused of violating state judicial rules by remaining on the board of Charlotte-based car dealer Sonic Automotive.

HUNTERSVILLE — TPG Capital, based in Fort Worth, Texas, agreed to buy American Tire Distributors from Investcorp, Berkshire Partners and Greenbriar Equity Group for $1.3 billion. American Tire is the country’s largest independent tire distributor.

MONROEGreiner Bio-One North America will spend $21 million to expand its plant and add as many as 85 jobs within five years. The company, part of Austria-based Greiner Bio-One International, employs about 186 here making plastic test tubes and sample-collection products.

CHARLOTTENorth American Financial Holdings received its federal charter and plans to buy troubled banks. The company has raised $900 million and is led by CEO Gene Taylor, a former Bank of America vice chairman, and several BofA veterans.

NORWOOD — France-based Michelin plans to expand its factory and add 74 jobs by 2012, for a total of 400. The local plant will retread aircraft tires, in addition to making them.

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