UPDATED: January 4, 2018 4:55 PM — Tampa-based DeBartolo Development has the long-term leasehold interest for the 49-acre Orlando Fashion Square mall under contract, city of Orlando staff confirmed on Thursday. The company is in due diligence with a prospective closing in February.
DeBartolo's president and COO Ed Kobel, senior development manager Steve Shaw, and assets manager Seth Layton met in mid-December with city planning staff and a transportation planning/impact fee coordinator, representing themselves as potential purchaser of Orlando Fashion Square.
They were accompanied by three members of the Orlando office of Cuhaci & Peterson, according to a copy of the meeting record provided to GrowthSpotter.
The DeBartolo team talked with city staff about existing entitlements and redevelopment options allowed for the property within its zoning and DRI. No formal plans have been filed with the city.
Entitlements on the property allow for massive density, including more than 1.38 million square feet of retail, up to 175 hotel rooms and 236 residential units.
Officials with DeBartolo did not respond to requests for comment on Thursday.
Located at 3201 E. Colonial Dr. on the corner with Maguire Boulevard, what the company would be buying is not the mall's fee-simple land itself, but the leasehold interest on the physical mall structure above it, originally built in 1973.
That includes both the current 1.2 million square feet of mall area under roof, and future redevelopment through November 2092 -- when the leasehold is set to expire.
The Bancorp is the prospective seller, having taken over that leasehold interest in 2017 from an affiliate of UP Development, which gave up the contract in lieu of foreclosure following a lawsuit that came to a head in January and February, the Orlando Sentinel reported at the time.
The property has been marketed since the latter half of 2017 by Mark Gilbert of Cushman & Wakefield as an urban redevelopment opportunity, with a signalized entrance on Colonial Drive that boasts 81,800 average vehicles per day, and entitlements that could allow for a broad mix of uses.
Current anchors at the mall include a Dillard's Clearance Center, JC Penney, Macy's and Premiere Cinemas. Cushman & Wakefield has claimed a 90 percent occupancy level during the marketing period.
DeBartolo has been most active in Greater Orlando in recent years as a multifamily developer, with projects in Reunion Resort and Kissimmee. But it was a joint venture developer on the Fresh Market-anchored Mills Park mixed-used center in Downtown Orlando, which was built in 2013 and sold in March 2016 for $29.6 million.
Portions of the land around Orlando Fashion Square mall owned by other groups are already undergoing redevelopment.
Hollywood-based multifamily developer The Cornerstone Group paid more than $8.64 million in late July for 15 acres behind Orlando Fashion Square, with plans for 356 apartments.
And more prominently along the Colonial Drive frontage, New York-based REIT Seritage Growth Properties owns the western 17.98 acres of the old mall's real estate footprint. It demolished the former Sears and Sears Auto-Care buildings there last year, and has construction underway for a new Floor & Decor, Orchard Supply Hardware, and plans for multiple outparcels that include Longhorn Steakhouse, a new prototype-design of Olive Garden and Mission BBQ.
The actual land owner of the acreage under Orlando Fashion Square is an investment vehicle for a family limited partnership tracing back to the McCrory, Maguire and McCullough families, each of which make up six general partners that now manage it.
Local eminent domain attorney Raymer F. Maguire III directs one of those general partner business entities. Local accountant Lou Lauteria manages the land lease for Maguire and the other five general partners.
Maguire told GrowthSpotter on Thursday that the land ownership group is not currently negotiating with any buyers for outright sale of the property.