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Mounting Debt Leaves Stonecrest Mall Vulnerable to Foreclosure

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DeKalb County’s Mall at Stonecrest has become the latest metro Atlanta shopping palace beset by debt issues that could leave it vulnerable to foreclosure.

A loan backed by a portion of the giant Lithonia mall off Interstate Highway 20 is now in the hands of a company that helps work out troubled debt, according to a report by Fitch Ratings.

It is a step that could lead to foreclosure and has been taken by owners of several metro centers hurt by the Great Recession and changing shopping habits of consumers.

Though Stonecrest’s loan was transferred by the lender to a so-called special servicer, the move doesn’t affect the operations at the mall, which opened in 2001 and was seen as a boon to south DeKalb. Even in a foreclosure it would likely stay open under new owners.

Still, Deborah Jackson, the mayor of Lithonia, called Stonecrest’s problems “disturbing news.”

Gwinnett Place Mall tumbled into foreclosure last year after its loan went to a workout firm, and the loan on Southlake Mall in Morrow last year went to the special servicer now overseeing the Stonecrest loan. Union Station Mall in south Fulton County was foreclosed in 2010 after years of woes and is currently vacant.

At least three other Georgia malls – in Macon, Gainesville and Rome – were foreclosed in recent years, but remain open.

Stonecrest is owned by a joint venture that includes Cleveland, Ohio-based Forest City Enterprises.

The economy, online retailing and competition from open-air centers have forced malls to evolve or face financial collapse. Since 2008, there have been more than 70 mall foreclosures in the U.S.

Read more: AJC

 

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