Northridge owner redeems mortgage, blocking Penzey plan
MILWAUKEE (WITI) — According to FOX6’s partners at the Milwaukee Business Journal, the Chinese owner of the former Northridge Mall has redeemed the mortgage on the property, giving it control of the closely watched site three days before a scheduled sheriff’s auction and preventing Bill Penzey from acquiring it for his business, Penzeys Spices.
U.S. Toward Enterprise Group Inc., based in Beijing, wrote a check for about $1.4 million Friday, April 11th to pay off the debt, said Hal Karas, an attorney for Penzey.
Penzey has been trying to acquire the site since 2012 and planned on using the property as a warehouse, processing, distribution and retail space. The move is a big blow to Penzey and the city of Milwaukee, which had enthusiastically supported Penzey’s plan to acquire the property and redevelop it.
The 800,000 square-foot site has been vacant since 2003, creating a drain in the Granville neighborhood and setting off an exodus of retailers. U.S. Toward bought it in 2008 for $6 million with plans to create a Chinese wholesale and retail center, but the plans never went through.
A judge approved foreclosure of the property back in fall of 2013, but U.S. Toward had a six month period to pay off the mortgage in order to take back the property, which is exactly what happened.
“It’s very, very disappointing. I think it’s blatant indication of what this company thinks about the city of Milwaukee and the people who have businesses here,” said Rocky Marcoux, Milwaukee development commissioner.
Marcoux also said a new owner for U.S. Toward has come forward recently. That owner has been in Milwaukee the past couple of weeks and met with him for several hours last week.
The new owner indicated he’d like to use the property for a food processing facility and has also revisited the idea of the Chinese marketplace. Marcoux said he doesn’t believe either of those uses will work at the site.
“I don’t feel they have a very good grasp of the local market as it relates to retail because they are trying to invest in a proposal that I don’t think can succeed there, and I don’t think there’s any market share for it. I also don’t understand how they say they want to open in a building that they have so badly neglected and were not willing to winterize,” said Marcoux.
Penzey already owns the former Boston Store property at the site, and because he owns a former anchor space, he has some veto rights over what U.S. Toward does with the property.
“We still have a very high quality businessperson in Bill Penzey, who’s still in the mix. The city will look at any options that are available to it to try to ensure that the economic viability of this site is not further endangered,” said Marcoux.
The city will be examining its options and watching U.S. Toward very carefully, but Marcoux declined to say if the city could condemn the property as a way to regain control.