The pending closures of J.C. Penney and Herberger's have triggered a foreclosure notice for Viking Plaza Mall.
A notice to foreclose the mortgage was recorded April 6 with Douglas County for Viking Plaza Realty Group, LLC. However, Scot Snitker, who manages Viking Plaza for Lexington Realty International, says this does not mean the mall is closing.
"It just needs to be refinanced, and we have been looking for that," he said. "It will happen."
Early in 2018, Herberger's fell behind on its rent.
"Bon-Ton (Herberger's parent company) told us because of the bankruptcy that they were suspending rent payment, so we had to report that to our bank," Snitker said. "Proactively the bank said, 'You don't have rent, they broke the lease, so technically you don't have a tenant.'"
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Snitker said the mall's mortgage was dependent on retaining anchor stores. With J.C. Penney closing in May, the bank considered two anchors to have left.
"The condition from the beginning was that if two or more anchors leave, then the note is due in payable," he said. "So they called the $10 million due."
Snitker says once new leases are signed, the mall expects to refinance with its current lender of a new lender. "Some that we have been working with have said, 'You have to have these leases in place, then we will provide financing,'" Snitker said.
He says Viking Plaza has not filed for bankruptcy and has no plans to do so.
"We aren't owned by a big corporation," he said. "We're all private investors. There's too much on the line. We're not walking away because this is our livelihood."
In total, Snitker is involved with about 14 malls, four of which are in Minnesota. He says the others are all doing well.
