Bank sues to foreclose on Turfland Mall property

ctruman@herald-leader.comJune 22, 2012 

A Western Kentucky bank has filed suit to foreclose on the Turfland Mall property on Harrodsburg Road in Lexington.

The lawsuit was filed by Heritage Bank of Hopkinsville on June 8 and names the Rubloff Turfland Corp. and Rubloff employees Gerald Weber, Ronald Swenson and Robert Brownson.

Turfland Mall, Lexington's first indoor mall, has been only lightly populated for years, and, according to a suit filed in Fayette Circuit Court, it has as current tenants only Staples, Whitaker Bank and Walter & Lake Foods.

On Friday, however, it appeared that Staples is the only operation in the mall's main building, and Whitaker Bank is operating a drive-through branch in a small building near the mall's main entrance. Cici's Pizza, run by Walter & Lake Foods, closed April 29.

(Although connected to the mall, the adjacent Home Depot owns its property.)

Pat Walter, who was the Cici's franchisee along with his wife, Lisa, said the restaurant closed. "They weren't doing anything to develop the mall," he said. "You've got boarded-up windows, and graffiti is starting to accumulate."

Graffiti and several boarded-up windows and doors could be seen Friday on the exterior of the mall, especially on the shopping center's rear. Landscaping plants were overgrown, and litter was visible.

The lawsuit alleges that Rubloff, in addition to not making payments, has allowed the property "to deteriorate into a state of substantial and material disrepair, and ... continues to receive the rents from the tenants in possession."

The lawsuit says Rubloff owes $15.1 million in unpaid principal, accrued interest and late fees. That amount is accumulating interest at the rate of $2,259 a day, according to the lawsuit.

The balance includes $64,650, which the bank said it advanced Rubloff in July 2011 to pay a portion of Rubloff's property taxes but was never paid back. The bank said it also paid the 2011 property taxes of $107,543 in April.

In addition to the foreclosure, the bank asks that it be named receiver to collect rent from the remaining tenants "to prevent further waste and deterioration."

In 1997, Rubloff Development of Hoffman Estates, Ill., outside Chicago, then described as a turnaround firm, bought Turfland Mall. Rubloff vice president Bob Brownson described the property as "a real vibrant mall" that needed some cosmetic improvements.

The Harrodsburg Road area was sizzling at that time, with the nearby Beaumont residential development going strong and other development stretching to the Jessamine County line and beyond.

Turfland, built in the late 1960s, initially was anchored by McAlpin's, which became Dillard's, and Montgomery Ward, which closed in 2001.

In 2009, with the mall nearly empty, Rubloff said it wanted to establish Turfland Town Center, a concept that would have included offices, residences and some retail space. A sign outside the mall still advertises the development plan.

Rubloff representatives could not be reached for comment Friday.

The Rubloff Development Web site continues to list Turfland Mall as a Rubloff site available for leasing.

Rubloff Development Group has developed more than 15 million square feet of shopping center space and owns about 40 retail properties, according to Hoovers.com, a business information Web site. The company also owns home builder Hallmark Homes, and cargo and air charter providers Rubloff Jet Express and Ryan International Airlines.

Cheryl Truman: (859) 231-3202. Twitter: @CherylTruman.

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