WOONSOCKET â€“ Acadia Realty Trust, the owners of Walnut Hill Plaza, have been pushed into foreclosure by the group of investors that holds the mortgage on the sprawling East Woonsocket strip mall.
The home of Sears, Savers, Ocean State Job Lot and at least 12 other businesses will be sold at a foreclosure auction at 10 a.m. on Jan. 14.
Robert Masters, the general counsel for Acadia, based in White Plains, N.Y., declined to comment on the foreclosure. But sources close to the legal move said Acadia is six months in arrears to the entity that holds the mortgage, ML-CFC Commercial Mortgage Trust.
The source, who is familiar with foreclosures involving distressed commercial properties, said that sale will not have any adverse impact on the tenants, and it might even turn out to be a positive development.
In a worst-case scenario, the investors who hold the mortgage will reclaim the title under their own name if the property fails to sell for an acceptable price at auction. If that happens, he said, the owners would probably spruce up the property in an attempt to make it more attractive to future buyers.
â€śIt may not be all doom and gloom,â€ť said Mayor Lisa Baldelli-Hunt. â€śThis may actually be the boost and the push this plaza needs.â€ť
Located at 1500 Diamond Hill Road, the plaza spans 15.3 acres and is worth $14.3 million, according to the tax assessorâ€™s online database.
By Acadiaâ€™s own accounting, the plaza contains nearly 298,000 square feet of retail space, though a significant chunk of it is vacant, tenants say. One of the last tenants â€“ and the biggest â€“ to leave the plaza was Shawâ€™s Supermarket, which closed down scores of underperforming locations in a recent restructuring move.
Roland Piette of Piette Jewelers, says his lease documents indicate there are 28 distinct sites for rent in the plaza, but nearly half of them are currently empty.
In addition to the major anchors, the plaza is home to a freestanding Taco Bell restaurant; Sleepyâ€™s; a U.S. Postal Service store; GameStop; Olympia Sports; Payless Shoes; a martial arts school; Aspen Dental; Weight Watchers, Nails Company & Spa; Family Hair Care; and Pietteâ€™s, a homegrown jewelry store thatâ€™s one of the oldest tenants.
Piette said he hopes a change in ownership will breathe some new life into the struggling plaza.
â€śOne of the biggest complaints we get from our customers is that we donâ€™t have a supermarket,â€ť he says.
Sears and Savers, located at the far opposite ends of the horseshoe-shaped plaza, typically have many cars parked in front of them. But the middle of the plaza, where the old Shawâ€™s is just part of a cluster of vacancies, the parking lot looks abandoned.
â€śThat whole section is empty,â€ť says Piette. â€śIt gives you this impression is pretty barren.â€ť
The foreclosure sale is just the latest sign of distress on Diamond Hill Road, which had been a robust epicenter of retail merchandising in the city for many years. All that began to change when Walmart abandoned the strip in 2011, opening a new store in the burgeoning Dowling Village shopping center, located just over the city line in North Smithfield.
Since Walmartâ€™s exit, a small parade of big box brand names have followed suit, including Loweâ€™s Home Improvement Warehouse, Staples and Papa Ginoâ€™s.
There are also signs of trouble at the other major commercial strip, Woonsocket Plaza, on Diamond Hill Road. The owners of that plaza, anchored by Burlington Coat Factory, have notified the city that they cannot afford to renew a lease with their major tenant, Burlington Coat Factory, unless the city grants the landlord a dramatic tax break.
City officials have expressed fears that smaller stores in the plaza could also leave with Burlington because they have clauses in their tenancy agreements that say they donâ€™t have to honor their leases if Burlington cuts ties with WP Woonsocket Associates LLC, the Bryn Mawr, Pa.-based company that owns Woonsocket Plaza.
The outfit proposes the city lower its taxable value from $12.7 to $2.5 million, the equivalent of a $400,000 tax break on the plaza, the cityâ€™s fourth-largest taxpayer.