Severna Park Mall buys time by filing for Chapter 11


December 04, 1992|By Michael Dresser and Angela Gambill | Michael Dresser and Angela Gambill,Staff Writers

Severna Park Mall, a once-thriving shopping center turned retail graveyard, filed for Chapter 11 bankruptcy protection this week in a last-ditch effort to win approval of its owners' plan to revive it.

The bankruptcy petition, filed Tuesday in U.S. Bankruptcy Court in Baltimore, did not give a precise amount of the near-empty mall's liabilities or assets, but debts to unsecured creditors were listed at more than $5 million. Among the creditors listed was the Anne Arundel County government, which is owed $150,630 in taxes.

A lawyer for the mall's owners, Severna Park Mall Associates of Silver Spring, said the group filed for bankruptcy protection after it failed to reach agreement with its chief lender, John Hancock Insurance Co., on modifications to its loan agreement.

The lawyer, Lester B. Seidel, said the owners wanted to convert the 35-store enclosed mall into a "super strip center." He said the mall's owners hoped to use its court-protected period of reorganization to come up with a plan that would be acceptable to Hancock.

"It's certainly not the medicine of choice, but I think it's a necessary business strategy," he said. The mall's managing partner, Thomas P. Turchan Jr., could not be reached for comment.

Severna Park Mall has been in decline since about 1987, battered by stiff competition from newer and large malls along Route 2 and the loss of Caldor as an anchor tenant in a 1989 leasing dispute.

Caldor, under new ownership, returned to the mall in 1991, too late to help the troubled center.

Today, much of the mall is empty with the stores' exterior signs long gone. Others left signs for their customers. "We are moving," reads a sign on the window of the former Gemini hair salon. "844 Ritchie Highway. See you there."

But Fashion Bug and Fashion Bug Plus still draw customers after 16 years on the site, said store manager Olean Hoppi.

"A lot of people forgot we're here. They see the dim lights out front and think everything is closed," she said. "But people who've come for a long time are very loyal. And we've had some new customers."

The one other remaining business, a Chinese restaurant called Kona Tiki, is barely hanging on, the owner said. "It's a terrible mall. No one comes," said Chuck Lee.

To revive the 19-year-old-center, which was acquired by Severna Park Mall Associates in 1986, the owners have promoted a $4 million plan to raze most of the mall between Giant Food and Caldor and create a new Severna Park Centre. The strip center would be occupied by about 12 stores.

Mr. Seidel, the owners' attorney, expressed confidence that his clients' plans could result in full repayment to Hancock and other lenders.

"At the appropriate time, you would see that this is not pie in the sky," he said. "We haven't called the mortuary. We haven't rented the hearse."

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