Epicenter owner defaults on loan, foreclosure ahead
Once a nightlife gem of Charlotte’s upscale neighborhoods, Epicenter appears to be heading for receivership and possible foreclosure.
The owner of the mixed-use mall is in arrears on a $ 85 million loan, as of June 6, according to allegations in a June 25 lawsuit filed by lender Deutsche Bank Trust Co. in county court from Mecklenburg.
The bank is simultaneously seeking to appoint a receiver to collect the rent and manage the property, and is also pursuing special proceedings with the county court clerk to seize the property, according to the lawsuit.
Los Angeles-based investment firm CIM Group purchased the property in 2014 for $ 103.5 million. The lawsuit names Epicenter SPE, and not CIM Group, as the defendant.
The nearly 304,000 square foot multi-level mall spans one block at 210 E. Trade St.
The majority of restaurants and other entertainment businesses ordered to close at the start of the coronavirus pandemic have never reopened at Epicenter, including Whiskey River, Vida Cantina and Tin Roof.
Bankruptcy lawyer Heather Culp of Essex Richards in Charlotte, who is not involved in the Epicenter lawsuit, has said a foreclosure in a case like this could be completed within 60 to 75 days. Deutsche Bank could then seek a buyer of property without a court order in North Carolina.
“That doesn’t mean it’s the end of Epicenter,” Culp said, “but time is running out.”
Groupe CIM did not respond to multiple requests for comment.. James Pulliam of Kilpatrick, Townsend & Stockton in Charlotte, representing Deutsche Bank in the matter, did not respond to a request for comment.
Big drop in income
The epicenter has 264,000 square feet of shops and nearly 41,000 square feet of offices on a site of more than 3 acres, economy data exposure.
The occupancy rate of Epicenter was 78% at the end of 2019 against 36% at the end of last year, according to Réonomie. Net operating profit fell from over $ 11 million at the end of 2019 to less than $ 6 million last year, according to reonomy data.
Another Charlotte mall is also heading for a possible lockdown.
The Northlake Mall owner defaulted on his home loan in November 2019 and has not paid off his debt, according to a Mecklenburg County Court consent order filed by Wilmington Trust seeking to appoint a receiver. TM Northlake Mall is affiliated with Starwood Capital Group, which purchased the North Charlotte Mall in 2014.
During the pandemic, the majority of the restaurants in the Epicenter never reopened.
This includes Blackfinn, Firehouse Subs, Grabbgreen Food + Juice, Jason’s Deli, Moe’s Southwest Grill, Papa Rossi’s New York Style Pizza, Smoothie King, Urban Brick’s Pizza, Vida Cantina, and Wild Wing Cafe.
Entertainment venues and nightclubs like Rooftop 210, Suite, The Tin Roof and Vault have also closed permanently.
Studio Movie Grill closed its second-level Epicenter location on March 2 after seven years, in a move it said was unrelated to the pandemic.
The epicenter almost got caught before
The CIM Group is the third owner of the Epicenter.
The epicenter was built in 2008.
Epicenter went into Chapter 11 bankruptcy in July 2010 under the direction of the original developers to avoid foreclosure after the center’s construction loan defaulted, according to Observer stories at the time. The Epicenter emerged from bankruptcy two years later under the leadership of new owners, Blue Air 2010, who invested millions in renovations.
Stay open at Epicenter
At Epicenter Online five-story plan, there are 52 commercial spaces but the map shows that less than 20 are open. Operating sites include Insomnia Cookie, Epic Times Jewelry, Fuji Hibachi and Teriyaki Grill, Flemings Steakhouse, Mortimer’s Cafe, Red Eye Diner, Bowlero, Tailored Smoke, Rocket Fizz, and World of Beer.
Service companies such as CVS, Novant Health and State Farm, Skyview Dentistry and Seaport Global financial office also remains open.
World of Beer CEO Paul Avery told The Observer in an interview last month that he has no plans to leave Epicenter, although the location is “important in terms of revenue. “.
Avery said Epicenter worked with the Florida-based chain of restaurants and faucet houses during COVID-19 restrictions to help keep its doors open. The Charlotte location opened in 2018. He believes the return of entertainment and sports to upscale neighborhoods will do the same for business.
“We are seeing steady growth in sales,” he said last month. “We believe the toughest days are behind us. At this point, the risk is what the property will do with the epicenter.
“I think Epicenter is built to last for the long haul and will do very well in the long run,” Avery said. “Our plan is to stay at Epicenter.”