Court documents reveal Foothills mall has been for sale since early fall

FORT COLLINS — The owners of the Foothills mall have been actively listing the mall since September, just more than a month before it defaulted on its construction loan, court documents show.

A judge ordered the 620,000-square-foot mall’s operations to be taken over by Greenwood Village-based Cordes & Co. LLP late last week, according to state court records.

The order was not contested by Foothills’ co-owners Alberta Development Partners LLC and Walton Street Capital, which both signed a cooperation agreement with MUFG Union Bank N.A. in early December days before the bank filed suit to place the property into receivership weeks ago.

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That lawsuit was a precursor to a formal foreclosure demand against the mall, which is in default on the remaining $46.59 million of its $150 million construction loan after failing to make a scheduled payment in October.

But the documents also reveal that Chicago-based commercial real estate services provider Jones Lang LaSalle Inc. (NYSE: JLL) was retained to list the property in a contract dated Aug. 31.

It’s unclear what the asking price for the mall would be, or if there have been any serious inquiries by outside parties to acquire it. Any sale would require court approval before closing.

Walton Street, Alberta Development and JLL did not respond to requests for comment Tuesday.

Alberta and Walton have until April 6 next year to confirm if they will cure the foreclosure demand. If they don’t, the mall would be subject to a bankruptcy auction later that month.

Josh Birks, the economic health director for the City of Fort Collins, told BizWest he has fielded calls over the past few months from a handful of prospective buyers, estimating that half were based in Colorado and half out of state.

He declined to identify any of the interested buyers, citing confidentiality agreements.

Those conversations were mainly about the city’s involvement with the mall redevelopment and general due-diligence questions, he said, and their comments suggested that their offers would likely be significantly less than the construction price due to the macroeconomic conditions the mall faces.

However, he got the sense that many of the inquiries were from real estate developers who had previously acquired distressed assets and invested in them over time.

“While we have had a great partnership with Walton and Alberta and… continue to be excited about the investment they made in our community, I think we’re also recognizing that for them, it’s probably time to move on,” he said.

The mall’s potential sale has no impact on the Foothills Activity Center on the property or its involvement in a metropolitan district that was used to build public infrastructure around the mall, Birks said.

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