Once the crown jewel in Charlotte’s uptown nightlife, Epicentre appears headed toward receivership and possible foreclosure.
The mixed-use retail center’s property owner is delinquent on payments on an $85 million loan, as of June 6, according to claims in a lawsuit filed June 25 by lender Deutsche Bank Trust Co. in Mecklenburg County Court.
The bank is simultaneously seeking to appoint a receiver to collect rent and manage the property, and also pursuing a special proceeding with the county Clerk of Court to foreclose on the property, according to the lawsuit.
Los Angeles-based investment firm CIM Group bought the property in 2014 for $103.5 million. The lawsuit names Epicentre SPE, not CIM Group, as the defendant.
The nearly 304,000-square-foot, multi-level retail center covers a city block at 210 E. Trade St.
The Epicentre saw its leasing capacity drop to 35% by June, according to Reonomy, a commercial real estate database. The site collects records from public and private sources, according to its website.
The majority of restaurants and other entertainment businesses that were ordered closed at the beginning of the coronavirus pandemic never reopened at Epicentre, including Whisky River, Vida Cantina and Tin Roof.
Bankruptcy attorney Heather Culp with Essex Richards in Charlotte, who is not involved in the Epicentre lawsuit, said a foreclosure in a case like this possibly could be finished as soon as 60 to 75 days. If the county clerk enters an order allowing a foreclosure sale based on the evidence presented at the foreclosure hearing, the property can be sold at the courthouse within that timeframe, she said.
“This does not mean its the death knell for Epicentre,” Culp said, “but time is running short.”
CIM Group did not respond to multiple requests for comment. James Pulliam of Kilpatrick, Townsend & Stockton in Charlotte, representing Deutsche Bank in the case, did not respond to a request for comment.
Big revenue drop
Epicentre has 264,000 square feet of retail space and nearly 41,000 square feet of office space on an over 3-acre site, Reonomy data show.
Epicentre’s occupancy rate was 78% at the end of 2019 compared to 36% the end of last year, according to Reonomy. Net operating income dropped from over $11 million at the end of 2019 to less than $6 million last year, Reonomy data show.
Another Charlotte retail center is also headed toward possible foreclosure.
Northlake Mall’s owner defaulted on its property loan in November 2019 and has failed to make debt payments, according to a Mecklenburg County Court consent order filing by Wilmington Trust seeking to appoint a receiver. TM Northlake Mall is affiliated with Starwood Capital Group, which purchased the north Charlotte mall in 2014.
During the pandemic, the majority of restaurants at the Epicentre never reopened.
That includes Blackfinn, Firehouse Subs, Grabbagreen Food + Juice, Jason’s Deli, Moe’s Southwest Grill, Papa Rossi’s New York Style Pizza, Smoothie King, Urban Brick’s Pizza, Vida Cantina and Wild Wing Cafe.
Entertainment venues and nightclubs like Rooftop 210, Suite, The Tin Roof and Vault also permanently closed.
Studio Movie Grill closed its second level Epicentre location March 2 after seven years, in a move it said was unrelated to the pandemic.
Epicentre nearly foreclosed on before
CIM Group is the Epicentre’s third owner.
The Epicentre was built in 2008. Epicentre went into Chapter 11 bankruptcy in July 2010 under the original developers to avoid foreclosure after the center’s construction loan went into default, according to Observer stories at the time. The Epicentre emerged from bankruptcy two years later under new owners, Blue Air 2010, which invested millions in renovations.
Staying open at Epicentre
On Epicentre’s online five-floor map, there are 52 business spaces but the map shows fewer than 20 are open. The operating sites include Insomnia Cookie, Epic Times jewelry, Fuji Hibachi and Teriyaki Grill, Flemings Steakhouse, Mortimer’s Cafe, Red Eye Diner, Bowlero, Tailored Smoke, Rocket Fizz and World of Beer.
Service businesses such as CVS, Novant Health and State Farm, Skyview Dentistry and Seaport Global financial office remain open, too.
World of Beer CEO Paul Avery told the Observer during an interview last month he does not have plans to leave Epicentre, despite the location being “significantly challenging in revenue.”
Avery said Epicentre worked with the Florida-based restaurant and tap house chain during COVID-19 restrictions to help keep its doors open. The Charlotte location opened in 2018. He believes as entertainment and sports return to uptown, so will business.
“We’re seeing sales steadily growing,” he said last month. “We think the hardest days are behind us. At this point the risk is what the ownership is going to do with the Epicentre.
“I think Epicentre is built to last long-term and will do just fine in the long run,” Avery said. “Our plan is to stay at Epicentre.”