Southfield to buy shuttered Northland mall, clear land

Mike Martindale
The Detroit News

Southfield — Northland Center mall, which heralded the rise of suburban shopping, will fall to the wrecking ball after the city of Southfield announced Wednesday it had bought the shuttered complex.

The sprawling mall at Eight Mile and Greenfield was the world’s largest shopping center when it opened in 1954. For decades, it was the first stop and last word in shopping for thousands of Metro Detroiters and included a four-level J.L. Hudson’s store (the retailer’s first foray into suburbia).

It even drew a visit from Michael Jackson in July 1998.

Development of the mall and other shopping centers in the growing suburbs coincided with the migration of population from the city center, crippling department stores and other retailers in Detroit. But Northland became a victim of the economy, competition from other shopping centers and in recent years, changing consumer tastes.

A receiver, Frank M. Simon, was appointed in September 2014 to oversee the mall’s future and it was closed this past April. Ashkenazy Acquisition, which bought the mall in 2008, defaulted on a $31 million payment last year after Macy’s — the last remaining anchor — closed.

Eastland Center in Harper Woods went into receivership this past summer after Ashkenazy said it owes more than $42.4 million of the $46 million it borrowed in 2006.

On Wednesday, Oakland Circuit Judge Wendy Potts approved the sale of Northland to Southfield for $2.4 million. Under the proposal, the city will spend between $8 million and $10 million to demolish the structure and clear the land. The site eventually will be sold to a developer interested in residential and commercial use of the property, city officials said Wednesday.

Demolition could begin in December and take up to a year before the site is readied for new use. City Administrator Fred Zorn said the city will not have to raise taxes to buy the property or demolish it and clean up the site. He said grants will be sought to cover some costs.

“The city of Southfield purchased the 114-acre property to protect, maintain and ultimately increase the property values for Southfield’s home and business owners,” Mayor Donald Fracassi said in a news release Wednesday. “The city does not intend to develop or own the property, we plan to demolish it and clean it up so it can be sold to a qualified property developer who will build a new, revitalized mixed-use development containing office, retail, and residential space on the site.

“We bought it because we did not want Northland Center to become a vacant shopping center significantly blighting the community. The Northland name is synonymous with Southfield and it’s important that we find the finest development possible for this site.”

There is a $31-million mortgage lien on the property that will be extinguished upon the city’s purchase of the property. Simon said he is still trying to collect unpaid rent from former tenants.

Steve Morris, principal manager of Axis Advisors in Farmington Hills, who also teaches real estate business classes at the University of Michigan, said Southfield should be commended for what it is trying to do.

“They want (the mall site) to be a gem, not an eyesore,” Morris said. “Northland is a very unique property which grew up with the area more than 60 years ago and just ran out of steam. Southfield recognizes it as the gateway into the city and wants it to be something special.”

Morris said once the site is cleaned up it could fetch up to $12 million, right around the city’s costs.

“It is a unique large site — just what it can become remains to seen,” Morris said. “Mixed use likely but no large office towers. Any retail will be smaller. Some tax-subsidized housing, especially for seniors, might work there along with some hospital or medical use for our aging population.”

Simon, who has been working on a sale since March 2015, said the city’s offer was by far the “best and highest” for the property.

Simon said over the past six months he had received several purchase offers. But most wanted an “extensive due diligence/inspection period” which would have required the receivership estate to continue to carry costs of maintaining and securing the vacant mall at about $57,000 a month.

City officials said it has always been their goal to have any buyer begin immediate demolition, but at least one “wanted to buy and hold it for a number of years while they prepared a development plan,” according to court documents.

Simon said Southfield’s initial offer was $1.8 million. It was then increased to $2 million and after “months of counteroffers, meetings, conference calls and drafts” the sides agreed on the $2.4 million price tag with resolution of tax and other matters.

Michael Manion, Southfield’s acting community relations director, said he had not heard any criticism about plans to bulldoze the historic mall.

“I think everyone is in favor of getting something different on the site that is of benefit to the residents and the city,” he said.

When the mall’s closure was announced, preservationists were concerned about what might happen to the “Boy and Bear” statue beloved by generations of shoppers. The city bought the statue for $500,000 and removed it from the mall. It remains “stored in a safe location” and there are no plans to sell it.

Manion said the city’s new arts commission will likely decide the future of the statue created by Marshall Fredericks in the 1950s.

Manion said he expects that some form of memorial, similar to the former St. Bedes Church at 12 Mile and Southfield, will be considered in the future because of Northland’s history. At the former church site, portions of the former church were used in an outdoor seating area with a memorial plaque, he said.

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Northland mall trivia

■Northland Center was the largest shopping mall in the world when it opened in March 1954. The mall was enclosed 20 years later.

■When the original center was completed, Southfield’s population was 25,000. Fifteen years later, the population had grown to 69,000, which is about what it is today, 72,000.

■As the population grew, so did Southfield’s business sector. Today, Southfield has more than 27 million square feet of office space, among the most in Michigan.

■Over the past decade, due to a struggling economy and an aging facility, many Northland stores closed. In August 2014, the mall went into receivership and in March 2015 the remaining stores were closed.

Source: City of Southfield