We now know who purchased the Orchards Mall in the recent online auction, as history repeats itself for Vijaya Kumar Vemulapalli and Durga, LLC. Vemulapalli was a Flint-based developer five years ago when he also purchased the former Cherryland Mall in Traverse City which was re-purposed as the Cherryland Center, an outdoor strip-center shopping facility in 1999, well before he bought it in November of 2013 in a similar online auction.
Real Estate Broker Steven Silverman, Senior Vice President of Investment & Advisory Services at Friedman Real Estate in Farmington Hills, Michigan confirmed this morning in a very brief press release that the Orchards Mall deal was successfully closed with Durga, LLC, which is owned and operated by Vijaya Kumar Vemulapalli.
Durga, LLC is also listed by Bloomberg as a Cincinnati-based operator of hotels including the Red Lion Hotel in Cincinnati/Sharonville in Ohio and the Great Wolf Lodge hotel & waterpark in Fitchburg, Massachusetts, among other properties. He purchased the hotel and waterpark in Fitchburg at auction in 2011 for $2.8-million and converted it to New England’s first Great Wolf Lodge in the spring of 2014.
Vemulapalli purchased the Cherryland Center on South Airport Road in Traverse City, on September 11, 2013 in an online auction at a bid quoted at that time as being “close to or above” $3.1-million, well beyond the minimum starting bid that year of $1.25-million.
The Orchards Mall online auction took place in June of this year with a reserve set at $2.5-million. Silverman will only confirm that Vemulapalli’s bid “surpassed the reserve minimum of $2.5-million.”
Vemulapalli found that the Cherryland Center had been placed on the auction block after it had been in receivership for some 3 years when previous owners, Schostak Bros., defaulted on a Wells Fargo Bank mortgage according to press reports from Traverse City at that time.
That 167,605 square foot shopping center is considerably smaller than the Orchards Mall’s 528,347 square foot facility. It’s not clear if Durga, LLC still owns the Cherryland Center, and calls went unanswered.
According to Traverse City Century 21 Real Estate Agent Jon Becker, Vemulapalli purchased the Genesee Towers of Flint, a commercial office building at auction in 1997 for $500,000. By 2004 the city of Flint condemned the building, sparking a law suit by Vemulapalli. He later won the resulting 6-year, $9-million legal battle in 2010, after claiming that Flint was “attempting to seize the property through inverse condemnation.”
Becker says that binding arbitration in 2006 resulted in a $6-million award plus interest to Vemulapalli, a decision that was upheld by the Michigan Court of Appeals in 2009 after which the Michigan Supreme Court declined to hear the case ending that battle.
Becker also says that Vemulapalli and his wife had owned a 34,000 square foot Medical Arts Building in Flint which was demolished by the community after sitting vacant for more than 15 years when it had turned into a gathering place for drug users. A portion of the $143,000 demolition cost was assessed to the couple’s property tax bill.
Online records indicate that Durga, LLC in Cincinnati was founded in 2011, and also lists at least one Crowne Plaza Resort Hotel as among its holdings. Durga also purchased the Magnuson Hotel in Fairborn, Ohio in April of 2014 with plans to re-brand it as a Quality Inn. Durga bought the 89-room hotel for $1.2 million according to municipal records.
As for Vemulapalli’s plans at the Orchards Mall, we’ll have to wait until he’s ready to identify what those plans entail. The deal was just closed on Friday, so stay tuned.
