It is still unclear what changes may take place at The Market Common, but the new owners aren't strangers to the property; the parent company of the buyer was also the parent company of the previous owner.
BEI-Beach LLC, which bought the property last week, is a subsidiary of Leucadia National Corp. LUK-MB1 LLC, which owned The Market Common property before it failed to make payments and JP Morgan Chase foreclosed on the property, also was a subsidiary of Leucadia. LUK-MB1 was run by McCaffery Interests Inc., but Leucadia was the financial partner.
BEI-Beach LLC paid $19,178,122 for the property, according to Horry County property records. A spokesman for JP Morgan Chase said the company does not comment on specific client relationships.
What changes might be made or how the purchase will affect businesses or shoppers is unclear because Leucadia declined to comment about the purchase. Hatton Gravely, a spokeswoman for The Market Common, said she was not authorized to comment on the sale.
JP Morgan Chase foreclosed on The Market Common in May after LUK-MB1 failed to make payments. LUK-MB1 owed more than $105 million on a construction loan, which was used for the 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. JP Morgan's spokesman also said he could not comment on the loss on the property.
The owners of The Market Common probably would have been able to continue to make payments on the loan, but chose to default because the property is no longer worth what it cost to build, said Dan McCaffery, president of McCaffery Interests in May.
The loan that LUK-MB1 LLC had on the property was a nonrecourse loan, which means in the case of a default and foreclosure, the bank cannot go after the company's or any company employee's assets.
McCaffery said the property's value has dropped, and there were better investments than continuing to pay on the loan, despite nothing being wrong with the project.
Tom Leath, the Myrtle Beach city manager, said that the city is pleased that Leucadia is involved because the company managed the property well before, and it appears that it has the money to succeed.
"We are pleased that the purchaser is tied to Leucadia because we think obviously they know exactly what the issue is, and they understand the market having been here a few years," he said. "There is no learning curve with them."
A representative of Leucadia called Leath last Friday to tell him that the sale was finalized and said that he would be in town in the next couple weeks and would like to meet with the city. Leath said that he hasn't heard from them again yet, but that at a meeting, he would stress the desire to keep the current mix of tenants at The Market Common.
He said that companies throughout the country are choosing to walk away from properties that have substantially lost value and are no longer sound investments, so this situation is not unique.
"If you look at the foreclosure as a calculated business decision, then I don't think it's odd that they got back in line to buy it back," Leath said.
The sale to the same company surprised Penny Vaigneur, the owner of Copper Penny at The Market Common.
"I'm very surprised that it worked out that way," she said. "In fact it's very difficult to understand why all that transpired."
Vaigneur said that she's glad the property has a new owner and that she has always been pleased with the management. Vaigneur said she'd like to see better signage and more traffic because it has been a slow year for her business at The Market Common.
"I believe that the economy was the main factor that affected it; I don't think it was the owners or the management," she said. "I hope they've learned a lot from this, and I just hope they'll be ready to keep their promises and work on things that will bring people to the center.
Contact ADVA SALDINGER at 626-0317.