Uncertainly surrounds the southeastern corner of a busy Beachwood intersection following the sale of La Place shopping center to General Growth Properties, owner of the adjacent Beachwood Place. Chicago-based General Growth acquired La Place, at Cedar and Richmond roads, for an undisclosed price.
“They are probably the best party to develop the property,” Jonathan Berns said of General Growth. “They have been great neighbors. We have been speaking to them about this transaction for well over a year.”
Berns is a partner in Boardwalk Partners LLC, a group of investors that bought La Place in 2004 for about $25 million. He said General Growth took possession of La Place about two weeks ago.
La Place – described as “a small, upscale mish mosh of shops and restaurants” on the Beachwood Convention & Visitors Bureau website – went into foreclosure in 2013 as a result of missed mortgage payments. General Growth purchased the delinquent mortgage on La Place.
When asked if he knew what General Growth’s plans are for La Place, Berns replied, “Your guess is as good as mine.”
“I don’t think they know yet,” he said. “Our only concern is making sure the tenants on the property are well cared for. We’ve had relationships with some for a decade, and when you work with people like that, they become friends.”
Attempts to reach Charles Tapia, senior development director for General Growth, and David Keating, the company’s vice president of corporate communications, for comment were unsuccessful.
Berns and Edward Schwartz, principals of ORG Portfolio Management, a Beachwood-based real estate consulting firm, are both among the investors involved in Boardwalk Partners LLC. Berns said ORG has no relationship to La Place.
Tenants at La Place, a 95,000-square-foot shopping center, include Mitchell’s Ice Cream, Dino Palmieri Salon and Spa, Ho Wah Chinese restaurant, Cedar Creek Grille, Williams-Sonoma, Pottery Barn Kids and White Flower Cake Shoppe.
Within the past four months, La Place lost the Sushi Rock restaurant and Peet’s Coffee & Tea. The center remains 75 percent to 80 percent occupied, Berns said.
“That’s not good enough,” he said. “We’re not getting the rent we used to get.”
Berns, of Hunting Valley, said the turning point came when Borders, the bookstore that occupied the largest space at La Place, closed in 2011. The chain liquidated all of its stores by the end of that year.
“Ever since Borders left, there has been a big hole,” said Berns. “It did phenomenally well, but there was a change in the industry.”
Club Rock, an after-school music program for children, has leased the former Borders space for the past three years. Avril Burg, owner of and instructor for Club Rock, said she was not surprised La Place was sold, but she is concerned.
“I knew it was coming,” she said. “I don’t know what it means. The previous owners were awesome; they couldn’t have been nicer. I hope the new owners are just as nice.”
Burg, a Solon resident who leads Run Avril Run, a local band, said she has spoken with representatives of General Growth, but “they don’t tell me much.”
“I don’t know what their plans are for the building,” she said. “I’ve heard rumors. They assure me not to worry, but I’m not so sure. It’s a little scary.
“I’m planning a spring session (of Club Rock), beginning in April, and I’m collecting tuition. I hope we’re not kicked out in the middle of a session.”
Burg said she is looking into other options for Club Rock.
“People have approached me (about another location), but I’m not making any plans,” she said. “I have such an amazing place. I love that I’m in the middle of Beachwood. But the future is definitely unknown.”
In November 2013, Beachwood City Council approved legislation that allows General Growth to build a 77,000-square-foot expansion to Beachwood Place, along with three freestanding restaurants.
Berns said the Beachwood retail community is only as good as Beachwood Place.
“(General Growth has) all the options for the future,” he said. “If Beachwood Place continues to do well, it reflects positively upon Beachwood. Conversely, if it doesn’t do well, that hurts the community.”
