Market Common changing hands, but enjoying busy summer in Myrtle Beach area

Despite making its way through the foreclosure process, The Market Common is having its busiest and most successful summer yet, said the manager and business owners.

More than two months after JPMorgan Chase Bank filed foreclosure against LUK-MB1 LLC, the company that owns and developed The Market Common, shoppers have seen few changes and business owners say business has improved.

"Everyone is just business as usual. It really has not impacted us on this level at all," said Sue Bonin, general manager of The Market Common. "It's our busiest summer so far."

Bonin said there have been no questions from shoppers and her staff continues to work with the tenants and looks to fill vacant spaces. No stores or restaurants have left since the May 11 foreclosures, she said.

The bank said LUK, which is owned by the Leucadia National Corp., stopped making payments on a construction loan and owes lenders more than $105 million. The loan was for more than 370,000 square feet of retail shops, almost 24,000 square feet of office space and 195 residential units that make up the core of The Market Common. Leucadia could not be reached for comment.

Leucadia chose to default because the property is no longer worth what it cost to build, said the property's developer Dan McCaffery, president of McCaffery Interests.

Bonin, who used to work for McCaffery Interests, now works for the court-appointed receiver Jones Lang LaSalle, a commercial real estate services firm that is responsible for running the shopping center during the foreclosure process.

The bank and Leucadia agreed to have the case heard by special referee Ralph Stroman, but a date for the hearing has not yet been set, said Bill Short, a lawyer with Haynsworth, Sinkler, Boyd, who is representing the bank.

"The receiver, among other duties, was charged with getting a marketing process ... seeing if there are any interested purchasers, and the receiver is undertaking that so we are not rushing," he said.

Short said he didn't know when a hearing would be scheduled; it depends on how long it takes the receiver to market the property. The Market Common receiver, Greg Maloney of Jones Lang LaSalle, could not be reached for comment.

Short said he expects the hearing to take place quickly once it is requested, but doesn't think the property will be sold at the foreclosure auction until this fall.

While the bank seeks a buyer, Short said, staff will still go through with the foreclosure process and sell the property at auction.

Mike Callahan, owner of the Lazy Gator stores in Murrells Inlet and at The Market Common, said he is confident things will work out

"As far as I can tell, there hasn't been any big impact," he said. "It's like nothing changed ... everything seems to be running pretty consistent with what it has in the past."

Callahan, who is going into his third year at The Market Common, said that this has been the best year for his business at that location. He said he is considering signing a lease extension.

"Things keep rallying and we're consistently seeing growth - and as long as that keeps going I'm tickled to death," Callahan said.

David Wilkes, the executive vice president of Dock Street Communities, which builds townhomes and single-family homes in The Market Common area, said the company hasn't made any changes since the foreclosure. Dock Street recently started construction on a six-unit building called Market View at The Market Common and is building several single-family homes in a nearby neighborhood.

"I don't even think most people even think about [the foreclosure] anymore," he said. "The center's being run just as it was prior."

He said his homeowners don't say anything about the foreclosure and most realize it likely won't result in the center closing, but simply a change in ownership, Wilkes said.

Wilkes said traffic from potential buyers has dropped a bit over the summer, but those who do stop in are more likely to buy.

"We're pretty optimistic about what we see," he said. "Traffic out there as far as the shops and restaurants go seems to be really strong this summer."

Another lawsuit involving LUK-MB1 could be nearing resolution.

The Myrtle Beach Air Force Base Redevelopment Authority alleges LUK-MB1 breached a contract agreement, but LUK has been given a few more weeks to respond. Lawyers for the two parties are meeting to try to find a resolution without further court action, said Buddy Styers, the executive director of the authority, and are close to reaching a compromise.

"I am hopeful that by early [this week] we will have an answer," he said, adding that he hopes the lease contract will be voided, which would allow the authority to decide what to do with the property.

LUK-MB1 signed a contract in early 2008 with the authority to buy six acres at the former Myrtle Beach Air Force Base. The contract said LUK-MB1 would close on the property within 45 days of the authority receiving the title from the U.S. Air Force. The authority received the title in April 2008; LUK-MB1 has not bought the property or dropped the contract.

The vacant land is between the Piggly Wiggly at The Market Common and the Myrtle Beach International Airport. LUK-MB1 owns the property that borders that tract on three sides and included it in the master plan for The Market Common.

The land, which was part of the base's aviation fuel depot, is contaminated.

Styers said he would like the authority to try to sell the property, but if a sale seems unlikely, the authority can consider other options, including giving the land to the city of Myrtle Beach.

The sale or distribution of the six acres is the last item of business for the authority before it can be dissolved.