Kroger in Ann Arbor's Georgetown Mall closing next month

The Kroger grocery store in the Georgetown Mall on Ann Arbor's southeast side will close Sept. 12.

The closure of the 25,872-square-foot store on Packard Street means the entire retail and office complex, which has been crumbling into disrepair for years, will be vacant.

It also throws into question plans for redevelopment of the 6.57-acre site with a total of 83,000 square feet of space. Developer Craig Schubiner said a year ago that Kroger's presence and brownfield tax increment financing were crucial to the redevelopment proposal. He could not be reached for comment on the Kroger closure today.

The property also entered foreclosure last year.

A site plan approved by the city in 2007 calls for a redevelopment that would create 90,000 square feet of new retail space.

In a written statement, Rick Going, president of Kroger's Michigan Division, said all 55 employees at the Packard store will be offered jobs at other locations in southeast Michigan. The statement also said the company will continue to meet its obligations under its lease agreement, which expires in July 2012.

According to its most recent earnings statement, Cincinnati-based Kroger had a net earnings of $435.1 million in the quarter ending May 23, compared to $380 million in the same period the year before.

Harbor Georgetown LLC purchased the Georgetown Mall property for $6.1 million in 2001. But a foreclosure notice in July 2008 said the land had an outstanding debt of $15.1 million with an interest rate of 20 percent.

The land also owes more than $625,000 in back taxes, Washtenaw County Treasurer Catherine McClary said. She recently granted Schubiner a 1-year hardship extension before county tax foreclosure, which will now take place in February if payments are not received by then.

If the February foreclosure goes through, Schubiner would have two months to redeem the property. After that, McClary said she would have to decide between two choices - a public auction to the highest bidder or putting the property into the newly created county land bank.

The property is being listed for sale by a Bloomfield Hills company called Income Property Organization. The company's sales brochure calculates the value of the land to be about $6.4 million, factoring in about $370,000 in repairs to the sidewalks, parking lot and light poles, as well as exterior renovations.