No. 9: Southgate Mall sold at foreclosure sale
By William F. West
Friday, December 23, 2016
Editor’s note: Our lookback at the top stories of 2016 continues.
Southgate Mall — a fixture in Elizabeth City’s business community for nearly half a century — faced an uncertain future in 2017 after changing owners in 2016 at a foreclosure sale.
At a public auction on July 25 on the steps of the Pasquotank County Courthouse, Southgate Mall was auctioned off for $8 million to L and R Partners, a Miami-based debt servicing company.
John McNames, of the law firm of Womble Carlyle Sanders and Rice, submitted the lone bid for the mall on L and R Partners’ behalf. The mall’s new owners have not indicated their plans for the property.
The sale was prompted by the default by the mall’s former owner, ABC Properties of New York City, on a 2005 promissory note held by its lender, Bank National Association. BNA demanded ABC Properties pay it $8.92 million in September 2015, but the company could not do so.
The auction was originally scheduled for April but was delayed twice to allow additional time for potential bidders to step forward. Pasquotank County records show Southgate is valued at $6.3 million for taxation purposes.
Despite the foreclosure proceedings, representatives of the mall’s two largest remaining tenants — Belk and Burkes Outlet — said in May that their companies planned to keep stores at the mall.
Even so, Southgate has slowly but steadily been losing tenants the past three years, as commercial growth continues along the Halstead Boulevard Extended corridor on Elizabeth City's west side.
A major loss for Southgate came in April 2015, with the shutdown of the J.C. Penney store following a decision by the retailer to shutter 40 stores nationwide.
In April of 2016, Southgate Mall lost another high-profile tenant when Merchant's Tire and Auto Service Center, which had operated a six-bay business, abruptly pulled out without explanation to the mall’s management.
In June, Vinny Freeman, who had been with the mall for 23 years, the past five as manager, resigned to take a job as a maintenance supervisor for Pasquotank County.
Several months prior to the announcement of the foreclosure sale, owners of one the mall’s newest tenants, Hezekiah Brown and Ernest Sutton of Executive Shoe Repair, announced they were starting an effort to promote the mall. They said Elizabeth City’s Center City business district, which includes Ehringhaus Street where the mall is located, needed to attract more businesses and that they hoped to help in that effort.
In April, however, Dareware, the parent of another Ehringhaus Street fixture — Ace Hardware — announced it was closing the store it had operated on the thoroughfare since 1991.
Captain D’s seafood restaurant also announced in late August that it would be relocating from a site on the mall property it had occupied since the early 1990s to the former Arby’s restaurant building on North Road Street.
There was one positive development for the Ehringhaus Street commercial corridor in September, when a new Dollar General store opened on the former site of a Hardee’s restaurant.