TARENTUM (KDKA/AP) - A Pittsburgh-area mall that was foreclosed on after its owners failed to repay $143 million was auctioned off Wednesday for $100.
The sprawling Galleria at Pittsburgh Mills mall has been in trouble ever since it opened its doors 11 years ago. After defaulting on that $143 million loan, the bankruptcy court put it up for auction.
Wells Fargo Bank was owed the money from a 2006 loan and submitted the winning bid for the 1.1 million-square-foot mall. The bank was acting as trustee for MSCI 2007 HQ11, the trust that bought the mall in suburban Frazer Township.
Pittsburgh Mills mall auctioned off for a hundred bucks. Bid by Wells Fargo which is holding 149 Mill. Debt on mall.
— PAUL D. MARTINO (@PMARTKDKA) January 18, 2017
Wells Fargo foreclosed last year on the mall, which opened in 2005. Pittsburgh Mills Limited Partnership defaulted on the loan.
KDKA's Paul Martino: "You're protecting the interests of the bank, right?"
Wells Fargo Attorney Nick Godfrey: "That's correct, yeah. And the process here will play out. Like I said, I can't comment further at this time."
It's clear that Wells Fargo purchased the property to make sure someone else didn't grab it at a ridiculous price. But it's not clear what will happen to the mall now, and that's got shoppers worried.
"It's a shame. It's a nice location. It's a modern mall. It's nice. I just don't understand why the customers don't come here and shop," said one shopper.
That's one of the big problems. The mall sits on more than a million square feet, but not many shoppers are coming.
The other problem is that mall shopping is declining everywhere due to the popularity of online shopping. It means the mall's former Sears Superstore now sits empty. Many others across the country have closed, too. Macy's stores are also closing, but so far the one at the Mills is staying.
"It's very sad. They never developed all the stuff they said was going to happen," said another shopper.
Plans for an indoor go kart track and a water park never materialized, and the mall is only about 55 percent occupied. Even so, shoppers who live in the area hope someone can save the place.
"It's just getting people to invest in the right things, in the right time. Hopefully, we can get people to come and help us out," another shopper said.
But the numbers are not good. The mall was once valued at $190 million, but today its worth just $11 million and there's that $143 million debt.
Wells Fargo and the mall's new owners haven't commented on the purchase.
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