The owners of the Riverbirch Corner shopping center in west Sanford are facing civil penalties of up to $250 per day after being notified by city officials of code violations three times since October, including this week for driveway safety issues, the Rant has learned.
Barbara McMillen, Sanford’s code enforcement supervisor, said the city notified the shopping center’s owners in October that more than half the lights in its parking lot were out.
“They worked on that some but the work apparently stalled, so we sent them a notice of civil penalty, which is up to $250 per day from the time of receipt,” McMillen said. “We’re hoping that will get their attention.”
The city also notified Riverbirch’s owners this week that there were a number of large potholes in the driveway areas. Failure to remedy those potholes could result in the same penalty as the parking lot light situation, McMillen said.
Additionally, the city last year notified the company that grass hadn’t been mowed at an outparcel on the property which was formerly home to a BB&T Bank branch. The city eventually cut the grass, although the company ultimately paid for that and began performing lawn maintenance at the property on its own.
“The shopping center is getting to a point where a lot of maintenance issues will need to be addressed,” McMillen said. “We’ve been reaching out to the company by telephone, but they stopped answering our calls.”
Riverbirch, which was built in 1985 and sits on 35 acres on Spring Lane, was sold at auction in late 2017 to a company called Riverbirch Realty LLC. While there had been some hope that Riverbirch could rebound from a bleak outlook at the time, information about the new ownership group indicates that redevelopment or significant investment in the property could be unlikely.
According to the North Carolina Secretary of State website, Igal Namdar of Great Neck, New York is Riverbirch Realty’s executive officer; this Reuters story from 2018 reveals Namdar and his company as one of two with “about 100 malls from New York to Utah now under their ownership” and that allegedly “invest as little as possible on many of their properties.” From the story:
Namdar and Mason typically spend 20 to 50 cents per square foot on maintenance. This compares to an average of about 60 cents per square foot that U.S. mall owners spent on mall upkeep in the first quarter of 2018 among malls that reported square feet for the period, according to National Council of Real Estate Investment Fiduciaries.
Namdar and Mason have spent so little on the malls they have acquired, they often yield a 10 to 16 percent capitalization rate, a gauge of the investment’s rate of return, according to real estate services firm Cushman & Wakefield’s head of capital markets Mark Gilbert.
This tops last year’s average U.S. mall capitalization rate of 5.4 percent, and even the 9 percent rate mall owners enjoyed on average in their 1990s heyday, according to real estate research firm GreenStreet.