Milwaukee's Phoenix Investors to buy, redevelop former Northridge … – Milwaukee Journal Sentinel

The former Northridge Mall would be sold and redeveloped by a local group that focuses on light industrial properties under a pending sale agreement disclosed Friday.
An affiliate of Phoenix Investors LLC filed that sealed purchase agreement with Milwaukee County Circuit Judge William Sosnay, who was presiding over a hearing on the City of Milwaukee’s request that it be granted ownership of the dilapidated mall.
Sosnay decided to delay ruling on that request. He urged Phoenix and city officials to talk about the pending purchase, which Phoenix says it could complete after a 45-day due diligence period.
“I think you should be receptive and at least hear what is proposed,” Sosnay said to representatives from the city attorney’s office.
Deputy City Attorney Odalo Ohiku called the last-minute purchase offer a stalling tactic.
But Phoenix attorney Mark Foley said that wasn’t the case.
“They are a serious developer,” he said.
Foley said Phoenix executives have been in serious discussions with the former mall’s owner, U.S. Black Spruce Enterprises Inc., since January. He told Sosnay that Black Spruce recently “made a major change in its demand to make a deal possible.”
He said Phoenix plans to renovate the former mall, not demolish it − despite a pending city raze order.
“The building has good bones and can be put to good use,” Foley said.
Foley and Heather Niski, Phoenix real estate counsel, declined to elaborate with the Milwaukee Journal Sentinel on the plans Phoenix has for Northridge.
Foley told Sosnay that the firm often buys rundown properties and renovates them. It owns 60 million square feet of commercial and industrial properties in 30 states, he said, including 10 million square feet in Wisconsin.
In the Milwaukee area, Phoenix’s developments include buying and renovating the former J.C. Penney distribution center, in Wauwatosa, into an Inc. distribution facility and redeveloping a former Lowe’s home improvement store, at Midtown Center, into a distribution center.
Other former retail buildings near Northridge have been similarly redeveloped into distribution centers and other light industrial uses.
The surprise entry of Phoenix into the courtroom battle delays the city’s drive to take ownership of Northridge.
Sosnay scheduled an April 14 hearing that could review that request.
But he also suggested that the city and Phoenix could reach an agreement to drop the raze order based on the firm proceeding with its plans to buy and redevelop the former mall − which the judge said could benefit the community.
Development Commissioner Lafayette Crump told the Journal Sentinel that the 11th hour delay in the court proceedings isn’t welcomed by city officials, whom he said have long been open to discussing Northridge’s future with development firms.
Phoenix is a reputable developer, Crump said. But, he’s curious about the firm’s assessment of the property given that city officials believe it’s in such dire physical condition.
If the city acquires Northridge, it would need to raise an estimated $15 million to demolish the former mall and safely dispose of its asbestos.
Ohiku told Sosnay that those funding plans are proceeding. City officials had earlier said they were seeking grants to help pay for the demolition and asbestos disposal.
Sosnay in October ruled that the city could enforce a 2019 condemnation order against Northridge.
Black Spruce has appealed that ruling, but Sosnay has said the city can proceed with efforts to demolish the mall.
Since then, Black Spruce has repeatedly failed to comply with Sosnay’s orders that it properly secure Northridge to prevent break-ins and fires. Foley said Phoenix would have the property secured within seven days.
Another issue involves the outstanding fines levied by Sosnay against Black Spruce for failing to comply with court orders.
Along with an $87,000 lien pending against the property, Sosnay on Friday issued another lien of $261,532 at the city’s request.
Sosnay also issued a new fine of $1,000 against each of Black Spruce’s three directors, who live in Canada and China, for failing to appear in court. That $1,000 fine will accumulate daily until they comply with that order, the judge said.
Northridge, at West Brown Deer Road and North 76th Street, closed in 2003. It was sold in 2008 for $6 million to Black Spruce.
Black Spruce said it would redevelop Northridge as a trade mart for Chinese firms selling toys, furniture, clothing and other goods on a wholesale basis to U.S. retailers. But those plans failed to proceed.
Tom Daykin can be emailed at and followed on InstagramTwitter and Facebook


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