Richmond’s Economic Development Authority transferred parking lot land it owned at Stony Point Fashion Park to the mall’s owners. (BizSense file)
With Stony Point Fashion Park’s future ownership up in the air, the city’s Economic Development Authority has shed its real estate holdings around the Southside mall.
On Nov. 18 the EDA’s board voted to transfer ownership of the roughly 41-acre parking lot around Stony Point Fashion Park to the mall’s current owners, EDA Chairman John Molster confirmed.
The deal, which comes as the rest of the mall was recently listed for sale, involved no money changing hands and was nearly two decades in the making. The 2002 agreement between the city and the mall’s original developer included a clause that allowed the mall owner to exercise an option to take ownership of the parking lot acreage.
That transfer could be made so long as three separate appraisals valued the parking space at less than $13.5 million, Molster said.
“The process was to have a total of three appraisers — one chosen by mall owner, one by the EDA, then a third chosen by both — go in and put a value on the lot,” he said, noting that the appraisals were completed earlier this year.
If the appraisers valued the land at more than $13.5 million, the mall’s ownership would pay the EDA that amount, and the EDA would then have passed on the money to the City of Richmond. But Molster said the three appraisals came in well below that figure and, per the terms of the contract, the EDA is transferring the ownership to mall ownership at no cost.
Molster said the $13.5 million appraisal figure was chosen in the original contract because it represents the investment the city made into the infrastructure around the property leading to the development of Stony Point.
“I think if you look at it, the city has done really well on their investment they’ve made in establishing the mall back in 2002,” Molster said. “If you look at the property tax collection, real estate tax collection, (and) sales tax collection that the city’s done at the mall, it’s been a nice return for the city.”
While the city maintained ownership of the parking prior to the transfer, the mall’s ownership has paid for maintenance and upkeep.
The property transfer has yet to be recorded with the city’s online records, but Molster said he believes it will be soon.
Taubman Centers was the mall’s original developer, and opened Stony Point in 2003, the same year Short Pump Town Center opened in Henrico. Florida-based Starwood Capital Group purchased Stony Point for $72 million in 2014. But in January 2020, Starwood fell behind on its loan payments and into default. That led to a special servicer being hired by the noteholder to take over the mall and oversee its operations.
The parking lot transfer comes as the mall and its 62-acre site are listed for sale as a potential redevelopment opportunity. Now that the special servicer owns both the mall and the parking lot, redevelopment can occur.
“That’s up to the mall owner, as to what happens next. We would encourage the maximum usage of the property, but that’s up to them,” Molster said.
The city’s new Richmond 300 master plan includes a reconsideration of Stony Point, suggesting a would-be green space and park nearby along Chippenham Parkway and mixed-use residential buildings surrounding the mall, all connected by trails and greenways.
With an occupancy rate that hovers between 60 and 70 percent, the 687,000-square-foot mall has seen plenty of churn in recent years, welcoming in new tenants like Edible Education and Stumpy’s Hatchet House, while chains like Banana Republic and Sur La Table have exited.
Richmond’s Economic Development Authority transferred parking lot land it owned at Stony Point Fashion Park to the mall’s owners. (BizSense file)
With Stony Point Fashion Park’s future ownership up in the air, the city’s Economic Development Authority has shed its real estate holdings around the Southside mall.
On Nov. 18 the EDA’s board voted to transfer ownership of the roughly 41-acre parking lot around Stony Point Fashion Park to the mall’s current owners, EDA Chairman John Molster confirmed.
The deal, which comes as the rest of the mall was recently listed for sale, involved no money changing hands and was nearly two decades in the making. The 2002 agreement between the city and the mall’s original developer included a clause that allowed the mall owner to exercise an option to take ownership of the parking lot acreage.
That transfer could be made so long as three separate appraisals valued the parking space at less than $13.5 million, Molster said.
“The process was to have a total of three appraisers — one chosen by mall owner, one by the EDA, then a third chosen by both — go in and put a value on the lot,” he said, noting that the appraisals were completed earlier this year.
If the appraisers valued the land at more than $13.5 million, the mall’s ownership would pay the EDA that amount, and the EDA would then have passed on the money to the City of Richmond. But Molster said the three appraisals came in well below that figure and, per the terms of the contract, the EDA is transferring the ownership to mall ownership at no cost.
Molster said the $13.5 million appraisal figure was chosen in the original contract because it represents the investment the city made into the infrastructure around the property leading to the development of Stony Point.
“I think if you look at it, the city has done really well on their investment they’ve made in establishing the mall back in 2002,” Molster said. “If you look at the property tax collection, real estate tax collection, (and) sales tax collection that the city’s done at the mall, it’s been a nice return for the city.”
While the city maintained ownership of the parking prior to the transfer, the mall’s ownership has paid for maintenance and upkeep.
The property transfer has yet to be recorded with the city’s online records, but Molster said he believes it will be soon.
Taubman Centers was the mall’s original developer, and opened Stony Point in 2003, the same year Short Pump Town Center opened in Henrico. Florida-based Starwood Capital Group purchased Stony Point for $72 million in 2014. But in January 2020, Starwood fell behind on its loan payments and into default. That led to a special servicer being hired by the noteholder to take over the mall and oversee its operations.
The parking lot transfer comes as the mall and its 62-acre site are listed for sale as a potential redevelopment opportunity. Now that the special servicer owns both the mall and the parking lot, redevelopment can occur.
“That’s up to the mall owner, as to what happens next. We would encourage the maximum usage of the property, but that’s up to them,” Molster said.
The city’s new Richmond 300 master plan includes a reconsideration of Stony Point, suggesting a would-be green space and park nearby along Chippenham Parkway and mixed-use residential buildings surrounding the mall, all connected by trails and greenways.
With an occupancy rate that hovers between 60 and 70 percent, the 687,000-square-foot mall has seen plenty of churn in recent years, welcoming in new tenants like Edible Education and Stumpy’s Hatchet House, while chains like Banana Republic and Sur La Table have exited.
Does the occupancy rate of 60-70% at Stony Point include the Dillard’s and Saks Fifth Avenue spaces? If they aren’t included the vacancy rate would be substantially higher. In any event redevelopment is in order for a mall that, in my opinion, was conceived as a “spite ” mall by the Taubman Company, when Regency Square was being challenged by the forthcoming Short Pump Town Center. It obviously didn’t work out as planned. The best parts of Stony Point are Flemings, P.F .Chang, the Cine Bistro, and the fact that it’s dog friendly. The Rebkee Company should be contacted for… Read more »
SMH-
The problem with Stony Point is that you just can’t fix a bad location.