Owner says buyer for Regency Mall is possible

File/Staff
Regency Mall's last anchor tenant, Montgomery Ward, closed in 2001.

Regency Mall could be on the verge of changing hands.

Marx Axler, property manager for the building's New York-based owner, Cardinal Entities, says a potential buyer from Atlanta who backed out last year when the real estate market tanked seems to be interested again. He said two other parties have also looked at the site this week.

They have different ideas on what they want to do with the shopping mall, which has been dormant since its last anchor tenant, Montgomery Ward, left in 2001. Mr. Axler said the Atlanta buyer -- whom he declined to identify -- wants to rejuvenate it by expanding on the existing building. The sale price in that deal, he said, would be $52.5 million, financed by Cardinal.

City Commissioner Jimmy Smith said he's skeptical.

"It's preposterous to think that he could get $52 million for it," he said. "It just seems to me like he's putting us off over and over and over."

The value of the mall has been a source of contention lately as the city has grappled with the eyesore, which south Augusta commissioners blame for stifling development on their side of town. Earlier this year, south Augusta commissioners wanted to set aside $8 million from the next round of special-purpose sales tax collections to buy and demolish Regency.

But Mr. Axler said the company wouldn't take less than $50 million, even though it successfully protested last year when the Tax Assessor's office raised the value from $4.2 million to $5.7 million. The SPLOST allocation, approved by voters in June, became $3.5 million for creating a 13-acre lake north of the mall and beautifying the area around it, a strategy for motivating Cardinal to do something with the property.

This year, the assessor's office raised the value to $16 million, which would have almost quadrupled the taxes from $51,223 last year to $193,543 this year.

Cardinal appealed.

On Sept. 16, Mr. Axler told the Board of Equalization it was "ludicrous" to place such a high value on a nonoperating mall.

Appraiser Karen Cash told the board she arrived at the higher value by taking Cardinal's 2007 purchase of the 10-acre Montgomery Ward parcel for $2.3 million and applying that value to the entire 72 acres. Mr. Axler said the company only bought that piece so it could own the entire mall and hopefully see it redeveloped all at once.

Citing a "lack of equity," the board lowered the value back to $4.2 million.

Mr. Smith said he had hoped higher taxes would prompt Cardinal to either sell the mall or redevelop it.

"I feel like it certainly should have stood like they had raised it," he said. "We really need that corner cleaned up, and something getting done there."

F.A. Johnson, the city's consultant on the Regency site, said he's also doubtful about a pending sale. He said he wasn't surprised that the Board of Equalization lowered the value.

"There's no value on that mall," he said.

In 2007, the city used a $75,000 federal grant to hire Columbia-based F.A. Johnson Consulting Group to devise a mixed-use, mixed-income plan. With the lake in the mix, Mr. Johnson is working on a $50,000 demographic and market analysis of the mall and its adjacent undeveloped land, determining what should be built there and how it can be financed.

The purpose, he said, is to get the attention of the mall's owner, whoever it might be.

City Administrator Fred Russell said the city is putting documents together to get approval from the Army Corps of Engineers to create a lake out of Rocky Creek.

The next SPLOST collections will start in late 2010, and if the Corps of Engineers approves, Mr. Russell said he expects work on the lake to start sometime in 2011.

Reach Johnny Edwards at (706) 823-3225 or johnny.edwards@augustachronicle.com.