MILWAUKEE — The owners of Milwaukee's dilapidated and long-vacant Northridge Mall decided to sell the property to a Milwaukee real estate development firm.
According to our partners at the Milwaukee Business Journal, U.S. Black Spruce Enterprises agreed to sell the mall near North 76th Street and West Brown Deer Road to Phoenix Investors LLC.
The move was not expected. The decision, announced during a hearing on Friday, comes a day before a scheduled hearing when city of Milwaukee officials were going to ask a judge to let the city take ownership of most of the mall.
The city of Milwaukee has been trying to get the mall demolished and build something new in its place. It ordered Black Spuce to tear the mall down first in 2019. The company has not complied with the order.
An attorney for Black Spruce and Phoenix Investors said during Friday's hearing the companies have been in talks about a sale of the mall on and off for a few years.
The attorney, Mark Foley, said Phoenix Investors would take responsibility for Northridge Mall. That includes taking responsibility for the city's raze order for the mall, according to Judge William Sosnay during Friday's hearing.
Milwaukee real estate developer Frank Crivello leads Phoenix Investors. Their expertise lies in buying empty industrial properties abandoned by corporate clients and refurbishing them for new clients, according to the Milwaukee Business Journal.
Developer details proposed plans
Phoenix Investors' director of acquisition and leasing Patrick Dedering spoke to our partners at theMilwaukee Business Journal in an exclusive interview.
Dedering says Phoenix Investors intends to renovate the existing structure for industrial or light-industrial use.
“It depends upon what the outcome of the leasing ends up being post-renovation, but we would expect that there’s strong potential for hundreds of jobs to be created,” Dedering told BizJournal.
The sale isn't closed until after Phoenix Investors completes its due diligence process, according to BizJournal. They also have to come to an agreement with the city for the property to be razed and the potential purchase of the Boston Store, which the city owns. The city began seeking bids this week to demolish it.
“The discussion of a greater development plan with the city is really the priority that we need to get comfortable with in order to move forward with the acquisition,” Dedering said.
Phoenix Investors has 45 days to complete its due diligence. The next court hearing is on April 14. Meanwhile, Dedering shared Phoenix Investors agreed to take responsibility to secure Northridge Mall within the next week. According to BizJournal, priorities include securing the perimeter fence, adding an onsite security guard, and putting in 24/7 video monitoring.
Phoenix Investors intends to privately finance renovations and not ask the city for public assistance for the cost of redevelopment, Dedering told BizJournal.
“With the proposed renovation, there’d be a significant impact to the overall property assessment once completed (and) stabilized,” Dedering said. "I think we're the right company with the right track record."
Phoenix would preserve Northridge Mall's existing exterior walls and roof and replace interior components.
Previous coverage of clash over Northridge Mall
The city of Milwaukee is attempting to take ownership of Northridge Mall in an effort to demolish it faster.
Previously city attorneys filed a motion with Milwaukee County Judge William Sosnay, asking him to transfer ownership from Black Spruce Enterprise Group, which bought the mall in 2008.
"This is about an attempt to speed this up, to have them [the city] have ownership, and then to knock it down. Because that's what everybody wants, in terms of the city," said the Milwaukee Business Journal's Mark Kass. "This is all about kind of finally moving this thing ahead."
If the city owns Northridge, it can begin raising the money to tear it down. Demolition is estimated at $15 million.
WATCH: Milwaukee Fire Chief discusses the mall's unsafe conditions
For years, the city has grown more concerned about the building's accelerating state of disrepair. There have been multiple fires there, angering the fire department as it continues to send units into the vacant mall.
Black Spruce isn't showing up in court or maintaining the security of the property despite a court order. And it faces mounting fines for not complying with the order.
Considering the company's lack of cooperation, Kass said he believes Judge Sosnay may be closer to transferring the city the building.
Judge Sosnay said the directors of Black Spruce, who live in Canada and China, will be sanctioned if they don't show.
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