Muskegon Mall Foreclosure Begins

    MUSKEGON — The push has begun to foreclose on the downtown Muskegon Mall, although backers of a new nonprofit development corporation that’s seeking to acquire the property are open to settling the matter without going to court.

    The Muskegon Downtown Development Corp. acquired the $10 million mortgage on the defunct Muskegon Mall from La Salle Bank of Chicago earlier this month and immediately began foreclosure proceedings against the mall’s owner, Rick Perlman of Chicago, to take control of the property for redevelopment.

    Preferably, the organization wants to achieve “a business resolution, outside the legal proceedings of the matter” and avoid the potential of a prolonged legal battle to secure local control of the property should Perlman choose to challenge the foreclosure, said Chris McGuigan, president of the Community Foundation for Muskegon County.

    “There is no reason to fight if we don’t have to,” McGuigan said.

    Successfully bidding on the mall’s mortgage represents a major step in the Muskegon Downtown Development Corp’s. efforts to secure the mall site, located in the heart of downtown, and provide local control over how the property is redeveloped. The recently formed nonprofit corporation — whose partners consist of the Community Foundation for Muskegon County, the Muskegon Area Chamber of Commerce and the Paul C. Johnson Foundation — wants to make sure the property is redeveloped in a way that’s consistent with the revitalization efforts in downtown.

    As the process to gain control of the property proceeds, either through foreclosure or working out an agreement with Perlman, the Muskegon Downtown Development Corp. will seek a developer interested in taking on redevelopment of the mall.

    Partners in the Muskegon Downtown Development Corp. envision razing the mall buildings and having the land redeveloped with a mixture of residential, retail, recreational and office uses. A study that the Paul C. Johnson Foundation commissioned last year determined the “urban village” concept was the potential best use of the land.

    The development group has applied to the City of Muskegon for a tax-free Renaissance Zone designation “which will help us in our pursuit of an appropriate developer, who shares our vision of what Muskegon’s downtown should be,” said Roger Spoelman, chairman of the board for the Muskegon Area Chamber of Commerce.

    While not a partner in the corporation, the City of Muskegon fully supports the effort and has a seat on its board of directors. The collaborative effort “shows exactly what a private and public partnership can do to improve a community,” Muskegon Mayor Steve Warmington said.

    “Together we will make sure that this key downtown property is transitioned to the best possible use for Muskegon,” said Warmington.           

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