A Tulsa County district judge appointed a receiver for the Tulsa Promenade mall effective Wednesday evening.
Jim Parrack, a real estate expert with Price Edwards and Co., became receiver as of 5 p.m. Wednesday after Tulsa Realty 126, a Delaware limited liability company acting on behalf of the mall’s ownership, failed to meet a deadline to settle a case brought by the mortgage holder after the owner defaulted on the loan.
The mortgage holder, Ready Capital Corp., filed an expedited receiver motion in Tulsa County District Court last month after the mall’s owners failed to make payments on the loan beginning in March.
Mall ownership requested an extension on July 10 and was given two weeks to pay the full amount owed to the mortgage holder.
Mall ownership owes a total of $6.03 million, according to court filings.
As receiver, Parrack will have possession of the mall property and full power and authority to operate, manage and conserve the property.
“The main focus of the receivership will (be) to take care of the Mall and operate it in the best possible manner while the owner and the lender work out their differences. Everyone should know that the Mall will remain open and all the stores will remain open,” Parrack said in an email. “The mall has a dedicated staff and dedicated stores that will do everything they can to make shoppers welcome for however long the receivership lasts.”
Ready Capital Corp.’s initial filing alleges that its collateral interest in the property is diminishing as a result of the mall owner’s failure to maintain the property and a suspected failure to direct all rents to the designated “lock box.”
Court filings claim the property’s value has seen a three-year plunge from $25.9 million in a 2016 appraisal to $4.5 million and that a recent property inspection revealed that substantial deferred maintenance remains incomplete, including items that were flagged for immediate repair in 2016 in addition to “significant deferred maintenance arising from normal wear and tear or neglect.”
The mortgage holder also states that it holds $1.4 million in repair and replacement reserves that the borrower has available, yet the borrower had only requested $165,000 in 2017 for parking lot repairs.
The mortgage loan is structured so that all rents paid are deposited directly into a “lock box” account and then dispersed.
The mortgage holder claims in the court documents that the mall owner failed to provide operating statements or rent rolls for January through May this year.
Per the receiver agreement, Tulsa Realty 126 must turn over to the receiver the possession of all bank accounts, checking accounts and credit card receipts in addition to all deposits, prepaid rents, cash and cash equivalents maintained in connection to the property.
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