CLEVELAND, Ohio – A New York-based lender that provided a $ 171.5 million loan to Pinecrest developers in Orange now owns Northeast Ohio’s newest shopping and dining center, due to financial problems related to the coronavirus pandemic.
Cuyahoga County financial agent records show that a subsidiary of Square Mile Capital Management owns the 750,000 square foot complex on Wednesday. The company issued a loan in January 2019 so that Fairmount Properties and DiGeronimo Companies, which developed Pinecrest, can refinance their construction bonds.
The transfer took place “an act in lieu of foreclosure,” Orange Mayor Kathy Mulcahy said. This signals that the developers have given up on the property instead of facing a foreclosure lawsuit.
Fairmount director Adam Fishman said in an interview on Friday that the pandemic had hurt development companies. Retail and brick-and-mortar storefronts across the country have told similar stories after local and state governments passed closures and restrictions on office and retail businesses in March to try to d ‘prevent the unnecessary spread of the virus.
He said Fairmount will continue to manage and oversee the day-to-day operations of the property.
“We’re really engaged with Square Mile to continue bringing the best merchants to Pinecrest even as we all learn to deal with COVID and grow up in a tough environment,” Fishman said.
Mulcahy said she recently had a virtual meeting with Square Mile executives and felt they “got our vision” for Pinecrest.
“We the public shouldn’t see anything different, quite frankly,” she said, adding that she was happy that Fairmount was still involved.
Square Mile did not immediately respond to a request for comment. A message left with DiGeronimo Companies was not immediately returned.
The mall, which opened in 2018, sits on 58 acres off Interstate 271 at Harvard Road. It includes 400,000 square feet of high-end commercial space, 160,000 square feet of office space, 87 apartments, a park, a hotel and a cinema. Several national chains have branches there – such as Whole Foods, J. Crew, and Urban Outfitters – as do Ohio-based restaurant groups such as Saucy Brew Works and Condado Tacos.
Fishman said the resort was doing well before the pandemic began in March, but lack of traffic to stores and restaurants in the following months hurt results. Mulcahy said the village’s income from development increased its reserves and helped it weather the drop in income from the pandemic.
Activity resumed after Gov. Mike DeWine’s administration lifted a foreclosure order and many other restrictions on shopping and dining, although consumer activity has always risen and fallen, Fishman said.
He said a few small shops had closed in recent months.
Despite this, and some say physical storefronts could face additional challenges due to online stores, Fishman said he believes there is a future for a development like Pinecrest.
“We expect great things for this asset over the next few years,” he said.