Marquis Shopping Center Auction Canceled

By Amber Lester Kennedy Saturday, March 12, 2011

The Marquis shopping center, as originally conceived.

The auction was set to begin at noon at the DoubleTree Hotel Richmond Airport, but an hour later, it was abruptly canceled. York County Economic Development Director Jim Noel said no reason was given.

The shopping center was to be sold in an open-outcry format to the highest bidder. The Marquis has faced considerable financial challenges, and the next owner will take on more than $33 million in debt.

P.K. Kamath, of CB Richard Ellis, said approximately 30 to 40 bidders showed up for the auction. To bid, would-be buyers had to have a Cashier’s or Certified Check in the amount of $150,000. No opening bid was specified.

Kamath could not say whether the auction is permanently canceled or whether it will be rescheduled, and also could not elaborate on whether CIT had received an attractive offer. “I think we are trying to evaluate our options right now, and that’s one of the things that we’re trying to figure out,” he said.

The next owner of the Marquis will take on 233 acres of property adjacent to Water Country, including nearly 270,000 square feet of retail. The sale would include the buildings that house JC Penney, Dick’s Sporting Goods, Kohl’s and Best Buy. A Target in the shopping center owns its building, and would not be included. In its description of the property, CB Richard Ellis characterized it as a “tremendous opportunity” due to its location between I-64 and Route 199, the demographics of the area and the potential to increase the density.

But before a new developer could begin new construction projects, debts must be paid to the Marquis Community Development Authority, which issued $30 million in bonds to pay for the center’s infrastructure. The businesses haven’t generated enough tax revenue to pay the debt service, so CIT has not made payments.

Millions are also owed in mechanical liens for site work and construction needs to be paid, and to the tenants, who opted to pay for some building construction expecting to be repaid by the developer. Because they’re owed money, the tenants aren’t paying rent.

The shopping center has suffered financial troubles since the recession began. Original developer Premier Properties USA went bankrupt in 2008, with investor Dominion Capital taking control. When Dominion didn’t make payments, primary lender CIT foreclosed and took ownership of the Marquis. Since then, CIT has tried to find a buyer and entered a purchase agreement with Madison Retail LLC in December 2009. Madison had one year to do due diligence and in August, Madison told CIT it planned to drop its option. The property is still listed as a retail option on their site, however, and Noel has said Madison “maintains an interest.”