Tuesday, November 06, 2012

Crash Goes the Trolley

File this under "I am shocked.  Not."  Trolley Square Associates has defaulted on a stack of loans for about $57 million, and a lender group headed by Bank of America has filed for a receivership.  I would first note that I buy none of B of A's high-toned rhetoric about just wanting to preserve the assets.  If that were true, the creditors would have filed an involuntary bankruptcy and had a judge and trustee who knew something about preserving a going concern.  Over in state court, you'll probably get a judge who doesn't know how to administer a receivership and just lets the creditors run roughshod.

Anyway.  It's not like Trolley has ever been much of a going concern, and it's not like Trolley Square Associates has ever demonstrated it was up to this job.  I've given TSA kudos here for getting special events to the Square and chided the tenants for not taking advantage, but in a real mall, the leases have "special event clauses that allow the landlord to force tenants to be open for such events.  And don't even get me started about places like the candy shop, which locks up a corner location all year for two months of operations.  A normal mall owner wouldn't put up with that, but requires being a chooser not a beggar, and Trolley and its owner are definitely the latter.  Let's face it, anyone who has to borrow from B of A, the gang that couldn't lend straight, is already in trouble.  We'll see how this plays out, but right now my Magic 8-ball says "Blight."

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