Photo by Curt Yeomans: General Growth Partners, which owns Southlake Mall, recently expressed an interest in buying from the Morrow Downtown Development Authority 11 and one-quarter acres of space in the former Macy's building at the mall, City of Morrow officials announced this week. Part of the building is occupied by the city's Morrow Center.
Morrow officials announced this week that the company that owns Southlake Mall is looking to buy several acres of property from the Morrow Downtown Development Authority, with an eye on expanding retail space in the shopping center.
At a joint called meeting of the downtown development authority, and the Morrow City Council, on Thursday, the authority's general counsel, Greg Hecht revealed that General Growth Partners (also known as GGP), which owns the mall, has submitted a letter of intent to the city.
In the letter, the attorney said, the company expressed its desire to buy 11 and one-quarter acres of property in a building that formerly housed Morrow's Macy's store, from the development authority for $1.7 million. The property the company wants to buy does not include the part of the building that the city has transformed into the Morrow Center, Hect added.
"Many years ago ... the city bought the old Macy's space [at the mall], and now we have the conference center, which is beautiful, and we also have some unused space," Hecht told members of the Morrow's Downtown Development Authority, and City Council, on Thursday. "There has been an opportunity by GGP, who is interested in acquiring the vacant space that has not been made into anything."
Morrow Downtown Development Authority members voted 5-0 Thursday in favor of letting GGP know they are interested in entering negotiations for a possible sale of the space to the retail management company. Immediately after the development authority took its vote, the Morrow City Council voted 3-0 in favor of the same action. City Councilman Bob Huie was not present at the meeting.
David Williams, the Morrow Downtown Development Authority's real estate attorney, explained the city owns the interior space that has been converted in the Morrow Center, but the Morrow Downtown Development Authority owns the rest of the space in the building, including the exterior walls. It is all of the Morrow Downtown Development Authority's space that GGP is looking to buy, he explained.
He also told members of the city council and development authority that it is expected to take a "month, or so" to negotiate a possible sale of the property to GGP.
Morrow City Manager Jeff Eady and the city's Economic Development director, Michael McLaughlin, said the mall may likely develop the unused space in the old Macy's building as locations for new retail stores. But McLaughlin added GGP has kept its plans for the space "close to the vest," and that the city is not completely sure what Southlake Mall would put in the space if it becomes part of the mall.
"Just a positive tenant" is what the city would like to see move into the space, McLaughlin said. He pointed out, "they do retail, and they know what to do" with the space.
Judy Pritchett, Southlake Mall's general manager and GGP's local representative, could not be immediately reached for comment Friday, and a promised copy of GGP's letter of intent was not immediately available from the city.
Hecht explained that GGP's offer of $1.7 million for the unused space is the same amount of money Morrow paid Macy's in 2006 for all of the space in the old Macy's building, including the space that eventually became the Morrow Center.
"You're very blessed in that GGP is willing to give a $1.7 million price tag for the unused space, which is the exact same amount that we paid for all of the space, and we get to keep the conference center," Hect told members of the development authority and the city council. "We believe it's a great opportunity."
Williams said since the city, and its development authority responded in kind to GGP's interest in buying the space, the parties will now negotiate a purchasing and sales agreement. He pointed out that the letter of intent alone does not bind GGP to buy the property, and it does not bind the city and development authority to sell the property.
"The letter of intent is not binding," Williams said. "It is merely an expression of the outline of the transaction as the parties see it happening at the moment. The purchasing and sales agreement will involve a lot more detail, and obviously once that gets executed, it is a binding agreement."
Williams and Hecht said one of the major issues the city and GGP have to work out is how to deal with the city's retaining ownership of the Morrow Center.
Williams explained that while the Downtown Development Authority has owned the space, including the exterior walls, it has been easy to work out an agreement for the city to have a Morrow Center sign hanging on the exterior of the building, because the two groups are government entities. It would be more complicated to work out such a deal if a private company owned the building's exterior space, he said.
"The city needs to make sure that, if a third party like General Growth owns the building, and the space around the building , that the city can continue to operate the Morrow Center the way they want to," Williams said.