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Owner defaults on loan for Steeplegate Mall

The owner of Steeplegate Mall has defaulted on the property’s loan.

Rouse Properties did not make a $47 million loan payment due on the Concord mall at the beginning of this month. That default was announced yesterday in the company’s second-quarter earnings report.

The report notes that Rouse is working to transfer the Steeplegate deed to its mortgage lender. More simply, the company is in the process of giving the keys back to the bank.

Carlos Baia, deputy city manager for development, said Rouse’s actions don’t necessarily mean the mall’s end.

“The chances of the mall closing are very, very slim,” Baia said.

Instead, the lender could take the mall, restructure the debt and seek a buyer.

“In theory, the buyer would buy the mall at a reduced price,” Baia said.

Bill Norton, president of Norton Asset Management Inc., said Rouse is shedding a mortgage that is much higher than the value of the property.

“It’s not worth $47 million,” Norton said. “So just like a house, if you get way upside down, you just toss the keys.”

The 480,000-square-foot Concord mall is only 65 percent occupied, according to yesterday’s report.

“Nobody wants that Steeplegate Mall because its vacancies are high and the stores there are underperforming. . . . In hindsight, it got too big,” Norton said. “It’s more square footage than the Concord market can support.”

Norton agreed the mortgage lender will likely sell the mall at a much lower price – and as soon as possible.

“Believe me, that lender doesn’t want to own that mall,” Norton said.

Requests for comment from the mall’s management and a Rouse spokesperson were not returned. Steeplegate Mall opened in 1990 and is one of 34 malls owned by Rouse. The company acquired the Loudon Road property in 2001, when General Growth Properties spun off 30 shopping malls that were described as not among their top-performing sites.

The mall was the second-largest taxpayer in Concord in 2012, behind only Wheelabrator Concord. Over six years, city records show Steeplegate Mall has dropped nearly $30 million from its assessed property value, which is calculated in part using data on retail sales.

For 2013, the mall’s value is set at $52 million – a compromise that came out of a settlement agreement between Concord and Rouse, which has challenged the city’s assessment in the past several years. In 2012, the city assessed the property to be worth $65 million, but records from the board of assessors show Rouse claimed the mall to be worth only $37 million that year.

On an earnings call yesterday, President and CEO Andrew Silberfein did not elaborate on Steeplegate. He did mention, however, significant cosmetic improvements to other malls owned by Rouse and the purchase of a new mall in Alabama.

“We continue to see a significant pipeline of potential acquisitions,” he said.

As Rouse appears to abandon Steeplegate, Baia said a new owner could be an improvement for Concord.

“There could be more flexibility on the part of the ownership of the mall to pursue different leasing strategies and different improvements to the mall,” Baia said.

“It would bring new vitality to that infrastructure,” he added.

(Megan Doyle can be reached at 369-3321 or or on Twitter @megan_e_doyle.)

Legacy Comments31

Here's a way to revitalize downtown Concord: After the city bankrupts all the businesses downtown with their construction project, the city can buy the mall. Their planners will dig it up for a couple of years and just think how many roundabouts they can put in that big easy to use parking lot. In no time all the businesses will be back downtown. And the best part? All you Concord taxpayers get to pay for it! Ain't ya' happy?

Nobody's happy with what's about to happen to Main Street, crank...except the Mayor, the CCC and Ace Trucking Company.

Hey Larry! Good to hear from you. I realize I've led a sheltered life and don't watch much TV, but what's with Ace Trucking? I've known Ron Severino since he had one old International dump truck, which he still has, and is restoring, and always have found him to be a straight shooter. While I disagree with the project, I am comfortable that they do have a competent contractor who will give them an honest value, assuming they allow him to do so.

Glad to hear you disagree with the project, crank, but since when are YOU happy to hear from ME?! I hardly watch any television these days, but your problem with Ace Trucking Company may lie in your age. They were a comedy troupe from SF that often appeared on the Smothers Brothers show (if you don't know of them, then you probably haven't received the 'birthday packet' from AARP). I'm sorry, but it's guilt by association. Nobody so involved with this joke of a project can be exempted for being otherwise level-on-the-level. If so, up to fourteen (14) mothers of CCC members would be chiming in, and we don't need that. Mrs Herschlag would be a delight to hear from, however.

I don't mind the debate at all, and I did watch the Smothers boys occasionally, but was usually working about 20 hours a day back then. I agree it is a joke of a project, but since it's a done deal, can't we poke fun at it without disparaging the hardworking contractors who are trying to pay their employees and make a living? I also remember hearing of CCC (Civilian Concentration Camps) and also remember WPA projects during the depression (We Poke Along) Thanks for enlightening me about Ace Trucking. I'll try to look that up, now that I'm old and senile, like you and have time to do it.

The Smothers "boys"? Oh yeah, you were a big fan of that Just so we're on the same page, CCC in this case, stands for Concord City Council. Otherwise, I'm all kinds of happy that you and Ron Severino are good ol' boys from way back, but that's irrelevant here. Btw, it's Tom Severino that I've been hearing about. Is Ron his bro, or are you offering solid proof of your senile status? f so, it really wasn't necessary. Your posts in this forum have had ol' crank long since pre-approved. (c;

Ron started the business and then Tom came aboard. Regardless of which one you talk to, they do what they agree to. If this gets messed up, look to the denizens of Green Street. Sorry about the nostalgia: Every time I see someone use CCC to identify the City Council, I think of the depression programs: Do nothing and take for ever to do it.

Yes, crank. I see Ron is Prez and Tom VP, from the Severino web site. I don't mean to demonize these guys, except for the fact that they are about to play a major role in bleeping up Main Street, Concord. The project is destined to fail by design, no matter what kind of job your buddies do. So, Severino Trucking Company is only after a paycheck here, I get it. But so were the guards at Auschwitz.

Hi Larry, I think we're mostly on the same page on this. Do you blame Ron and Tom for trying to keep their employees busy, pay them and all their vendors, while hopefully, making enough to give them a return on their efforts? If this gets screwed up, it is because someone in the employ of the City of Concord mandates it.

Nothing at this mall is made in America. No one should ever shop there. Buy American. I am glad the mall is failing. Time to close it and turn it into a casino. am serious.

Try to find something in Walmart that is made in America. Even the flags are made in China. Walmart was the beginning of the end of American manufacturing jobs, especially clothing. Remember the "look for the union label"? What a joke, our clothes are made by practically slave labor in third world countries and Americans don't care as long as they are cheap.

try doing the slightest bit of research..really...try it !.....

I enjoy the mall. Great place to walk in the winter and meet friends for a cup of coffee. The big challenge for malls and all retail, is folks are busy and shopping on line saves time and running around. I am hopeful our Concord Mall will get some good management and some practical stores that will draw folks. I personally love Dress Barn, Bon Ton, Sears and J.C. Penney, so not all is lost.

Megan Dolye - I dont understand. How often is this $47M payment due? Was this one-time thing because he let the payments pile up for a while? How was this mortgage structured - how many payments and how often? How much has he paid in total for this property so far, and how much would he have paid if he didn't walk away?

F-of-F, The mall was built on a swamp has gone 'under water', okay?

Check your property bills, Concord.

I think outlets also contribute to the demise of malls. At one point the Tilton Outlets and The Steeplegate both had Gap and Coach Stores. You could get a better deal at both of those stores in Tilton. EBay also started the on line shopping spree. When the Mall was the only game in town it did well. Sad, as I always have liked the SteepleGate Mall.

It did not get to big but rather more places have opened around it and management tried to squeeze every cent they could out of it. There is no real draw to the place plus the food court is deserted. On top of that all shopping places are suffering as more people buy on line rather than drive to a store in NH.

Dead on, unfrozencavman. Best Buy & Target going up next door didn't help, but online shopping was the dagger.

Again Dirty Larry believes everything he reads - Do tell Dirty - what percentage of retail sales annually are on - line?

Yup, everything...except what's written by Michael Sununu & PBR. (c:

Tell PBR that this year a survey by Deloitte says this will be the year that online overtakes brick and mortar. Other sources suggest the same or a near tie. Never listens to me..

hogwash - and baloney on top = a big whopper

Nah, it's all those folks going shopping downtown instead. Just thought we needed a laugh.

Downtown is quaint but offers nothing. It is a mecca for the Concord Click. Hey they can have it! I just do not want to pay for their big shot ideas!!

Maybe the city of Concord could buy it. They could institute a major facelift call the Complete Mall Project with new sidewalks, roadway access, trees and re-configured parking. Do not forget the up-lighting for the trees. It will be so festive on the holidays - I cannot wait!

lol...good 'un, Bozo.

I restructured a rural Mall 20 years ago. Put in a small hockey arena, small movie theater, play area with laser tag...... food court came alive and the rest of mall thrived. Reason was the pee wee Hockey moms & family needed something to do with while Jr played hockey

Hard to believe any mall that banned Democrats could "thrive", PBR.

Very smart move!! Just like family farms, thinking outside the box and using their land in other ways.

1,200 employees, eh? or: " In addition to paying $1.5 million in taxes for 2007, the mall holds dozens of shops that employ hundreds of people. Its 52 acres are part of a sprawling retail campus on the Heights. " By MEG HECKMAN Monitor staff Thursday, November 13, 2008 " so which one is correct? +200 since 2008?

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