As a sheriff’s sale featuring Frazer’s biggest attraction approaches, township officials say they are looking forward to what the future may hold for the property that is home to the Pittsburgh Mills shopping mall.
“The township is anxious for the sale to take place and is hopeful that the sale will produce an owner that can reimagine and breathe new life into the property in a way that creates new sustainable jobs and complements the success of the surrounding commercial properties,” said Lori Ziencik, township secretary and supervisor.
The Pittsburgh Mills mall will be up for sheriff’s sale at 9 a.m. Monday if the owner, Namdar Realty Group, does not pay its outstanding special assessment bills — which amount to about $11.5 million — before then.
Frazer initiated the process of a sheriff’s sale on the Pittsburgh Mills property in July. Court filings indicate that Namdar owes $11.5 million in special assessment bills on four parcels: the mall building, the former Sears Grand building and two nearby vacant commercial properties.
“We are working to have this resolved prior to the October 2nd auction,” a representative of Namdar Realty Group said in an email to the Tribune-Review. “Our firm highly values the Pittsburgh Mills mall and the surrounding community. It holds a significant place in our portfolio.”
A sheriff’s sale would mark another chapter in the checkered history of the mall, which opened in 2005.
In 2002, the county’s redevelopment authority authorized a tax increment financing protocol, known as a TIF, for the Mills Corp. Development Project. Properties in the TIF district included the mall building and some of its outparcels, including Sam’s Club and Lowe’s.
Bonds were sold for the project. Allegheny County, Frazer and the Deer Lakes School District agreed to divert a portion of the real estate taxes from properties in the TIF district to pay the debt service on the bonds. Revenues from the bonds were used on infrastructure at the mall.
The TIF finance plan depended on money from real estate taxes to pay off the bonds with interest, like a traditional loan.
Namdar acquired the property in 2018. The company was granted a reduced property assessment. With that reduction, real estate tax income from the TIF district wasn’t enough to pay the bonds and the interest on them.
Other properties in the TIF district also appealed, and were ultimately granted, a lower assessed value, which further reduced the tax revenue available to pay off the bonds.
But in anticipation of a potential revenue shortfall, Frazer created a neighborhood improvement district that would alert the municipality when tax revenue was unable to meet the debt service on the bonds.
It allowed the township to issue special assessment notices — extra money TIF district property owners were required to pay — to make up the shortfall. Frazer has done that for several years.
Namdar has not paid its special assessment bills, triggering the sheriff’s sale. None of the special assessment revenue is retained by the township. That money goes to Wells Fargo to pay bondholders.
However, all property owners in the TIF district pay their real estate tax.
If the sheriff’s sale proceeds, the $11.5 million, if the sale price is that high, is paid to bondholders and not the taxing bodies.
