Bank buys back Richland Mall in foreclosure sale

MANSFIELD­ - Richland Mall may go up for sale on the commercial market, after Wells Fargo Bank bid $16.25 million for the property last month at foreclosure sale in Cleveland.

In a ruling issued Jan. 26, U.S. District Court Patricia A. Gaughan approved conveying a master commissioner deed for the property to be conveyed to the bank, in its role as trustee for J.P. Morgan Chase Commercial Mortgage Securities Trust.

Mall manager Jodi Scott said her company, MadisonMarquette, had no immediate comment on those developments or whether it had affected mall operations.

Centro Richland LLC had owned the mall for nearly a decade, until last summer. The U.S.-Australian based partnership, purchased the mall in July 2006,from WEA Richland LLC, Richland Manager LLC and Centro Watt Operating Partnership 9 LLC, as one of six U.S. retail properties acquired in a larger $524 million deal.

Centro Richland took out two commercial loans of $18.12 million each in 2006, from JPMorgan Chase Bank. The loans were assigned to Wells Fargo the following year.

In 2014, Wells Fargo filed for foreclosure on the mall property, claiming more than $40 million was still owed on the loans. It won an order in July 2015 from Judge Gaughan directing that the nearly 30-acre mall property on Stumbo Road be sold by a master commissioner in Cleveland.

At a Jan. 11 sale, Wells Fargo bid $16.25 million to buy the property back

Judge Gaughan issued an order Jan. 25 directing that a master commissioners' deed be turned over to Wells Fargo.

That form of deed passes right and title to the property to parties in the foreclosure case, in unencumbered form for any liens that became part of the foreclosure action, but may not cover liens which did not,

Wells Fargo Corporate Trust Services is acting as trustee for the property, administering the trust the loan is part of, said Jen Hibbard, vice president of wholesale communications for Wells Fargo.

"We do not have ownership interest in this property," Hibbard said.

"When a foreclosure action is taken on a loan in a securitized pool... the loan is legally recorded in the name of the trustee on behalf of the trust that owns the loans. The loans are recorded this way to protect the trust's ownership interest in the loan in cases of originator or servicer bankruptcy or other claims against trust assets," she said.

Hibbard said Richland Mall has gone to special servicing, and property level decisions are being made on behalf of Wells Fargo by C-III Asset Management.

Kevin Infante, account supervisor for financial communications and capital markets for Edelman in New York, whose name was given as a representative for C-III Asset Management, said C-III had no comment at this time on whether there is a buyer in the works, or how the commercial property might be marketed.

Ontario Mayor Randy Hutchinson said he'd heard it was possible the property would go back to the bank for a time after the foreclosure sale.

"I just know that they're trying to sell it, is the last thing we were told," Hutchinson said.

lmartz@gannett.com
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Twitter: @MNJmartz