'No Sale' Most Offers Rejected at Mall Auction
By Karen Gould

Buyers seeking a bargain soon learned otherwise when owners rejected all bids for the retail units in the Mackinaw Crossings auction Monday, August 7, except those offered on properties being sold as absolute (no minimum bid). During the public auction Monday evening, sellers turned their backs on approximately $6.3 million in offers for the retail units being sold as condominium properties and also turned down an offer for $533,771.62 for the centuryold train depot building now used as a restaurant.

The shopping mall sits on 10 acres of land one block south of Central Avenue in Mackinaw City and is owned by Bill Shepler of Mackinaw City, Mike Ryan of Detroit, and Jimmy Wehr of Springfield, Missouri.

When the sale was announced one month ago, Mr. Shepler told Town Crier, "It's time for the independent individual shop owners to own their stores."

According to the Cheboygan County Equalization Department's Web site, the 2006 assessed value for the property was $7,336,700, which would set the estimated market value for Mackinaw Crossings at more than $14.6 million.

Of the 52 retail shops, the current owners accepted bids on 14 units. Those retail condominiums were advertised to be sold as "absolute" properties, meaning they went to the highest bidder with no limitations or reserve prices imposed on the units. The stores averaged 1,100 square feet and the average price paid was $182.40 a square foot (an average of $200,640 a store), fetching the owners a total of $2,475,897.60. Additionally, a 10 percent buyers premium was added to the sale price, upping the square footage cost to the new owners to approximately $200 a square foot.

Bids on the remaining properties were subject to the sellers' confirmation and at an average price of $174.20 a square foot, the sellers tossed out all the offers. Combined, they totaled $6,299,856.41.

"The owners felt the bids weren't adequate," Martin Higgenbotham, president of Higgenbotham Auctioneers of Lakeland, Florida, told Town Crier at the end of the auction. Mr. Higgenbotham's company was hired to manage the auction.

"The bids were quite a bit lower than the fair market value, but that's what it was worth tonight with the audience we had," he said.

Approximately 150 people attended the auction, including Heather Lee, a mortgage broker from Cheboygan. She said she had several interested investors, although she initially was hesitant to recommend the properties, based on limited financial information available for projected expenses of the condominium association, including snow removal costs and estimated advertising expenditures. The association would also manage the common areas of the mall.

"I didn't have the comfort level to put my name at stake and say, 'Yes, this is a great investment,'" she said.

Three other investors indicated they also needed more financial information before they would consider placing a bid on the 830-seat live performance Mackinaw Theater, said Mr. Higgenbotham. His company is working with those interested investors to get the additional information, including the theater's operating numbers.

"I feel very confident we will sell it," he said. "It's just a matter of getting the information and getting it done."

Prospective buyers were either mailed or given a prospectus on the sale. The bound booklet contained information on the auction process, maps and a survey of the property, tenant and lease information, condominium declarations, and contracts for sale and purchase of the property.

The units range in size from approximately 450 square feet to more than 2,600 square feet. Two owners who already have purchased their retail units include Teysen's Gallery and Teysen's Gift Shop, owned by Vicki and Greg Teysen of Mackinaw City, and Courtyard Cinema, owned by Leonard Dawson of Bellaire. Nine units are empty and the remaining spots have leases that range from $16,800 annually to more than $75,000 a year.

One unit, which was slated to be sold, was removed from the sale and the owners, Mr. Shepler, Mr. Ryan, and Mr. Wehr, offered it free to the future condominium association to be used for their offices. The unit is the second floor of the depot restaurant.

The owners did not address the potential buyers, though Mr. Shepler could be seen standing in the theater's lighting balcony at the back of the theater watching the sale's progress.

The auction, which began at 6 p.m., lasted three hours and, as the theater emptied and his team packed up, ready to head to Lansing for an auction the next day, Mr. Higgenbotham predicted that, by morning, they would

be getting telephone calls from people wanting to make higher bids.

He was wrong. The calls began coming in within an hour of the auction's end.

"It's just the normal procedure," he said taking it in stride. He's been an auctioneer since 1959.

"Bidders go home and realize they should have offered more money," he said. "Instead of looking at it as an opportunity to buy a good investment, they look at it as a bargain, and then later they realize they should have bid more money."

Typically, he said, by the next day, people will pay between 20 and 35 percent more for a property after they realize they made a mistake.