Ownership of downtown Ann Arbor's former Borders property shifts
The future of the former Borders flagship store property in downtown Ann Arbor now rests in the hands of a company partly owned by a family trust after the parties that previously controlled the site resolved their legal dispute.
Malcolm Properties LLC reached a settlement with publicly traded Farmington Hills-based Agree Realty Corp. to assume ownership of the entire space formerly leased by Borders Group Inc. for its flagship store, AnnArbor.com confirmed today.
Melanie Maxwell | AnnArbor.com
The company confirmed in a new filing with the U.S. Securities and Exchange Commission that it had "entered into a settlement agreement that provided for the termination of the ground lease" on the property at the corner of Liberty and Maynard streets and "conveyed the retail portion of the property owned by the company" to Malcolm. Agree retained an interest in the attached office space that was once used by Borders as its headquarters.
John Fingerle, owner of Fingerle Lumber and manager of Malcolm Properties, confirmed that Malcolm Properties struck a deal with Agree that gives it full ownership of the retail property. Malcolm has a number of owners, including several trusts and individuals.
"We are currently discussing the future of the site with several parties that are interested in it," Fingerle said, declining to reveal details because it's "a little early in the process at this point."
A real estate agent who was marketing the site for Agree, Michael Lippitt of Landmark, confirmed that he's no longer involved in the property's repositioning.
The settlement between Agree and Malcolm Properties comes after Malcolm filed documents last fall with the 15th District Court to proceed with Agree's eviction.
The resolution of the dispute clears the way for Malcolm to find a tenant for the space, which is considered a critical anchor of downtown Ann Arbor and a key indicator of its retail sector's vitality.
Local store owners have said the closure of the downtown Borders store in September has had a significant impact on foot traffic and the image of the retail scene.
The downtown store — which was located steps away from Borders' original store on South State Street — is empty, with a few bare shelves lingering as a reminder of the property's past. Vandals have sprayed graffiti on the store's entrance and on the brick on the easternmost alley portion of the building.
Attorneys for Agree Realty and Malcolm Properties were not available for comment, and an Agree Realty executive did not respond to a request seeking comment.
Malcolm Properties LLC is the legacy of a family trust that originally leased the former Jacobson's store to Borders in the mid-1990s. The trust — then called the Clara I. Malcolm and J. Karl Malcolm Testamentary Trust, according to documents reviewed by AnnArbor.com — represented about 10 different family members at the time.
Borders was paying Agree $24,543 a month when it filed for bankruptcy protection. That rate was expected to rise several times over the next 15 years, reaching $32,666 by 2025.