Buyer cancels deal for Virginia College Building at Cortana Mall

Buyer cancels deal for Virginia College Building at Cortana Mall

On Behalf of | Jun 10, 2020 | Commercial Real Estate |

Businesses in and around Baton Rouge often use contingencies as protection in deals that involve a lot of money. Most contingency clauses allow one party to withdraw from the deal without penalty if one or more conditions are not met. Sometimes, the exercise of a cancellation contingency can have unexpected negative effects on neighboring business. The recent termination of a contract to purchase the Virginia College Building at the defunct Cortana Mall provides a recent example of how a decision by one business can adversely affect the fortunes of neighboring businesses.

The Cortana Mall was opened in 1976 with four anchor tenants and 100 inline tenants. Each anchor tenant occupied a separate building. The mix of tenants changed over the years, and the mall also changed its tenant mix. As newer malls opened in Baton Rouge, the Cortana Mall began to lose tenants. At the end of July 2019, all remaining tenants, including the owner of the Virginia College building, were ordered to vacate the premises. The rumor quickly spread that Amazon planned to purchase the mall buildings and convert them into a regional order fulfillment center.

In late April, the owner of the mall for more than a decade announced that the buyer for the mall site had elected to cancel the purchase agreement. The announced reason for the cancellation was the apparent inability of the purchaser to reach satisfactory terms with the owner of one of the detached anchor tenant buildings at the mall site. The identity of the purchaser was supposedly protected by a confidentiality agreement, but as the owner of the mall said, “I think everybody knows who it is.”

The owner of the site said that he hopes that the deal can come back to life, but that outcome appears to be unlikely. No report of the cancellation mentioned litigation, and it seems likely that the cancellation of the purchase agreement will not be contested in court. The mall site is back on the market while the owner tries to rebuild the deal with Amazon.