WATERLOO, Iowa — Crossroads Center, showing a debt exceeding $45 million and a property value of $19.5 million, is now under receivership after its lender foreclosed on the shopping center, according records filed Nov. 16 in Black Hawk County District Court.
Effective that date, District Judge George Stigler appointed Los Angeles-based E3 Realty Advisors Inc. dba E3 Advisors and Krista Freitag as receiver to operate and manage the mall and to collect rents for the duration of the receivership, which the court will determine.
The Waterloo mall, home to more than 70 retail and commercial businesses, is in default of a $45 million debt to U.S. Bank National Association of Bethesda, Md., which is acting by and through CWCapital Asset Management LLC, which is special servicer of a loan the mall’s parent company, GG&A Crossroads Center LP, a partnership based in Wilmington, Del., originally secured in September 2006, according to court records.
Court documents say an agent of the lender sent the borrower a notice of default and demand for payment on or about Oct. 4.
The court directed the receiver to post a $10,000 bond, which the court will retain until it orders otherwise.
E3 Advisors also was authorized “to hire attorneys and accountants, and pay such attorneys and accountants out of the funds collected from operating the Property, for the limited purpose of performing those services necessary to ensure the Receiver property performs its duties as receiver,” court documents state.
Also named as defendant in a foreclosure petition filed Nov. 16 is Bromo Inc. dba Reconstruction 380, which has claimed an interest in the property as mechanic lienholder, documents state.
The court ordered GG&A Crossroads Center LP, et. al., to “turn over immediately to Receiver all of the Property’s monies, accounts and deposits currently in its possession, to be held by Receiver in a separate savings account insured by the Federal Deposit Insurance Corporation, pursuant to the terms and provisions of the agreements entered into by the tenants or other parties who made the deposits,” documents state.
E3 Advisors was authorized to collect current leases, records, contracts and other documents connected to the mall property. The receiver also has power to execute leases.
The lender has elected foreclosure without redemption, which means that the sale of the mortgaged property will occur promptly after entry of judgment, according to records.
Attorneys for the plaintiff — Jennifer Vath of Kansas City, Mo.; and Patrick Galles, of Cedar Falls — did not return telephone calls for comment.
Neither Freitag nor Gary Ogzewalla, general manager of the mall, returned calls for comment.
According to the foreclosure petition, the mall ownership took out a $39.5 million loan with California-based IXIS Real Estate Capital Inc., through agent Mortgage Electronic Registration Systems Inc. Sept. 7, 2006. A mortgage was filed with the Black Hawk County Recorder of Deeds Sept. 15, 2006. Documents indicate U.S. Bank National Association has held the mortgage since June 10, 2011.
The plaintiffs cite Iowa law as providing for “the appointment of a receiver under the circumstances existing here, where the presence of a receiver will preserve property from the waste threatened by the lack of appropriate management of the Property,” the plaintiffs said in their motion to have a receiver appointed.
Sears general manager Travis Weepie, contacted for comment, said he had not heard any talk about the issue and had not been aware of it.