Pittsburgh Mills mall in Frazer sells for $100
While his wife was across the hall shopping for shoes, Leo Battung of Harmar sat in on the sale of the Pittsburgh Mills mall Wednesday morning.
“I'm curious to see what happens,” he said. “We're up at the mall a lot.”
While his wife spent about $50 on shoes, the sprawling retail complex in Frazer sold for not much more — just $100.
Attorney Nicholas Godfrey made the opening and only bid at a foreclosure auction held in the space formerly occupied by ITT Tech, which closed in September.
He was representing mortgage holder Wells Fargo, which foreclosed on the 1.1 million-square-foot shopping center in November 2015.
As of October 2015, developers Mills Corp. and Zamias Services owed the bank $143 million, with continuing interest and costs.
The sale consisted of the Galleria enclosed mall and several surrounding lots — not the stores in the nearby shopping complex formally known as the Village at Pittsburgh Mills. Those properties include strip shopping centers and several stand-alone stores, among them Lowe's and Michael's, and restaurants.
Simply a legal move
The transaction was a “consensual foreclosure,” so there would not have been any other bidders, said Sean Barrie, a research analyst with New York City-based Trepp LLC, which provides market research for the real estate and banking industries.
Wells Fargo is the trustee of a Morgan Stanley trust, which holds the mortgage on the mall. The trust will become the owner when the process is completed.
As trustee, Wells Fargo administers the trust. Wells Fargo shows up in legal records as owner because of its role as trustee, Wells Fargo spokesman James Baum said.
A federal court in January 2016 named Jones Lang LaSalle as receiver to operate and manage the property, replacing Zamias Services of Johnstown.
No change in operations expected
Mall General Manager Anthony Stephens, working for Jones lang LaSalle, said they expect no changes in the management or operations of the mall.
“We expect the day-to-day to continue,” Stephens said. “The mall is open and ready for business.”
Frazer Supervisor Lori Ziencik attended the auction with other township officials. The township's offices and police station are housed within the mall; the police department was recently renovated and expanded.
“I really believe it's going to be business as usual,” she said. “The township will continue our relationship with mall personnel.”
The decade-old mall's value has been plummeting — from $190 million a decade ago to an appraisal of $11 million in August — and nearly half of its storefronts are empty. Key tenants have been lost over the years, including a Sears Grand.
Ziencik said many of the mall's hits have come not from the property itself but from larger corporate shutterings and bankruptcy filings. Going forward, she expects to see the mall repopulated with tenants that are not traditional retail.
“They've got to adjust to the retail climate,” she said.
While saying the mall is not all there is to Frazer, Ziencik said it is important to the township and the broader area.
“It's a huge, extreme convenience. It's a definite asset to the Allegheny Valley,” she said. “There's been a lot of jobs created here, not just for our residents.”
Battung's wife, Gail Battung, said she's hopeful the mall turns around and more high-end stores move in.
“There's so many empty stores,” she said. “It's sad.”
Brian C. Rittmeyer is a Tribune-Review staff writer. Reach him at 724-226-4701 or at [email protected].