A public auction scheduled for today of Tollgate Mall, one of Harford County's largest retail complexes, was canceled after the mall's owner filed for Chapter 11 protection in federal bankruptcy court.
State Farm Life Insurance Co., the main mortgage-holder on the 50-store mall in Bel Air, had organized the auction as part of a foreclosure action. An attorney for State Farm said the mall's owner, a limited partnership called Bel Air Square of Hauppauge, N.Y., has not been paying on its mortgage.
Mark J. Daneker, a Baltimore attorney representing State Farm, said the bankruptcy petition was filed yesterday in federal court in
New York. The filing gives Bel Air Square the chance to restructure financing and an opportunity to reorganize management of the beleaguered shopping center, Daneker said.
"We're obviously disappointed because we would have liked to have the matter behind us," Daneker said. "This means a delay in getting our money."
The 11-year-old mall, at U.S. 1 and Md. 24, has been hurt by poor management and design since it was built, according to tenants, local planning officials and others. About half of its space is unoccupied.
But Vincent Polimeni, a New York-based developer who heads the Bel Air Square partnership, said the mall has languished over the past two years as the partnership pursued two attempts to sell it to local developers.
Polimeni said he sought cooperation from State Farm, "but we didn't get it."
/# "We want to pay our creditors,"
Daneker said Bel Air Square owed more than $8.8 million in principal and interest on its mortgage of $9.3 million. A partial interest payment was made in January, he said, and no payments on the principal have been made since November.
Polimeni said the partnership has prospective tenants willing to move into the unoccupied space. "It's an excellent piece of property in a great location," he said.
The mall, which is near Harford Mall and several other shopping centers in the busy Bel Air commercial district, is anchored by K mart and Giant Foods.
Carol Deibel, town planner for Bel Air, said market data suggest that Tollgate Mall could do well. She said the traffic to Tollgate is roughly the same as that to busy Harford Mall across U.S. 1.
Shoppers "go to either Giant or K mart. They don't go into the mall proper," Deibel said.