Bank forecloses on Feldman Properties mall in Ohio

A former Great Neck real estate investment company has entered foreclosure on one of its major assets, a 1 million square foot mall in Ohio, court records show.

The publicly traded company, Feldman Mall Properties Inc., has struggled for years with the weak economy and voluntarily entered the foreclosure agreement as a means of preserving ownership, a company official said.

Wells Fargo Bank, a trustee for the lenders, foreclosed on Feldman's 1.1 million square foot Northgate Mall in Coleraine Township, Ohio, on Feb. 5, according to a filing in the Hamilton County Court of Common Pleas.

"The company is not considering filing for bankruptcy, and remains viable. We've been operating for awhile in a difficult retail environment," said John F. Dougherty, general counsel for the company, which moved from Great Neck to Manhattan last summer.

"Our aim is to continue to operate, and to restructure our debt and move forward," Dougherty said.

"We're not abandoning this mall or walking away from it."

The company entered the foreclosure process as a means of stabilizing the mall's business operations after the loss of a major retail anchor, Dillard's, he said.

Once the property loan is in foreclosure an appointed receiver will have the power to improve cash flow, ensure steady debt payments, and rearrange the terms of the financing, Dougherty said.

The company is current on its interest and principal payments, but the loss of Dillard's in December affected the terms of its rental agreements with the other mall tenants, Doughtery said.

Based on information provided on Feldman's Web site as of Tuesday morning, the Northgate mall constitutes about a third of its total retail square footage. Feldman says that in addition to the Northgate it has two other malls, in Illinois and Texas.

Newsday has reported on Feldman's struggles with the weak retail economy in recent years that forced it to put several of its malls up for sale.

The company said in a 2008 Securities and Exchange Commission filing that its outlook was bleak, and that it might have to shut its doors if it was unable to sell assets.

Feldman bought the Cincinnati property in July 2005, the company's Web site says.

As a cost-cutting move in 2008, Feldman's board voted to cease filing reports required by the Securities and Exchange Commission. As a result, the company shares are no longer traded on the Over-the-Counter Bulletin Board. They continued to be quoted on the Pink OTC Markets, a privately owned company formerly known as Pink Sheets.