Clark County commissioners have agreed to back a $3 million loan to the Clark County land bank for future real estate purchases, possibly at the Upper Valley Mall.
No specific redevelopment plans are secured yet, Commissioner Rick Lohnes said, but they want to some make sure options are open to the Clark County Land Reutilization Corp in the mall area.
“There are no purchase agreements floating around but there are options,” Lohnes said. “We want to make sure if we get the chance to do the right thing out there, the land bank needs the capability to do that.”
If the land bank were to default on the loan, the guaranty will be drawn from the county’s general fund, according to the legislation approved last week.
The land bank is a nonprofit organization set up by Clark County that can take foreclosed properties and either demolish structures or rehabilitate them to make them reusable.
Clark County will back the loan allowing the land bank to potentially purchase property in the future and will be repaid once a buyer is found, Lohnes said.
A similar guaranty was made in December of 2016 when the land bank purchased the former Macy’s property at the Upper Valley Mall for $250,000. The Macy’s property includes the roughly 80,000-square-foot former department store and attached warehouse, and about 14 acres of mostly parking lot valued at about $1.54 million, according to the Clark County Auditor’s Office.
Commissioners voted last week to pay off the $250,000 loan because it was racking up nearly $30 per day in interest, Lohnes said. The loan is being paid from the county’s economic development fund, he said.
“We’ll pay that off rather than sit on it and eat the interest,” he said.
The land bank is lining itself up in case its in a similar position to buy more property at the Upper Valley Mall as it did with Macy’s, Clark County Land Reutilization Corp. Executive Director Tom Hale said.
“Those conversations are ongoing but there isn’t anything in writing,” he said.
Upper Valley Mall manager Brenda Labonte declined to comment.
In January of 2015, both Macy’s and J.C. Penney announced plans to close their locations in the Upper Valley Mall just one day apart. The back-to-back announcements were a major blow to the mall, which has served area residents for more than four decades. The Springfield store was among 14 nationwide that Macy’s closed at the time, affecting about 80 employees locally.
The Upper Valley Mall — Clark County’s retail hub since 1971 and valued at more than $20 million in 2012 — slipped into receivership in 2014 after former owner Simon Management Associates defaulted on a $47 million loan.
It was sold for $2.65 million in December of 2015 to New Upper Valley Associates LLC. The sale didn’t include the current space occupied by Sears or the former Macy’s property.
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Staying with the story
The Springfield News-Sun has provided extensive coverage of the Upper Valley Mall, from its financial troubles to how it affects area businesses. The paper will continue to explain what is happening and what it means to area residents.
By the numbers
$3 million: Amount of loan to Clark County land bank that will be backed by the county commission.
$250,000: Amount of money Clark County paid for former Macy’s property at Upper Valley Mall.
$2.65 million: Sale price of Upper Valley Mall in 2015.