A Dane County judge ruled Friday against a move to take the Hilldale Shopping Center out of the hands of Chicago owner and developer Joseph Freed and Associates in a foreclosure case involving the upscale shopping area.
Freed also is more than 30 days late in paying property taxes on Hilldale.
In the foreclosure case, Circuit Court Judge John Albert turned down a request to appoint a receiver to take control of Hilldale, saying it is in the project's best interest for Freed to continue its $175 million improvement project.
The lawsuit, filed Feb. 8, involves a $12.6 million loan by TriSail Funding Corp. to Hilldale Land Co., a Freed subsidiary.
"Joseph Freed and Associates has been in the process of negotiating a loan extension with TriSail and felt they had reached an agreement, and then TriSail filed the foreclosure," Freed spokeswoman Jayne Thompson said.
An attempt to reach a TriSail official late Friday was unsucessful.
Bank of America holds the first mortgage to Hilldale, at Midvale Boulevard and University Avenue. TriSail, a wholly owned subsidiary of Bank of America, is considered a junior lender.
While the foreclosure case continues, Hilldale and its stores will remain open and business will go on as usual, Thompson said. In fact, Freed penned a "long-term lease agreement" with Macy's, Hilldale's anchor tenant, just last week, she said.
Meanwhile, Freed missed a Jan. 31st deadline to make an installment payment to the city of Madison on its Hilldale property taxes. The shopping center and land are valued at $48 million, with $986,432.96 in 2009 taxes due.
"If you miss your first installment, your second payment becomes immediately due. Then you are charged a penalty and interest of 1.5 percent per month, which accrues on the first of every month," said Dane County treasurer David Worzala.
That amounts to just under $15,000 in interest and penalties each month.
Freed told the court Friday it has a plan in place to pay the taxes on or before the second installment date, July 31.
Before Freed bought the West Side shopping area in 2004. Hilldale Inc., a for-profit company owned by the UW Foundation, had owned the shopping center, which opened in 1962, while Kelab Inc., a nonprofit corporation that benefits UW-Madison, had owned the land.
One of the nation's largest shopping center developers, Freed is trying to win back control of a major development in downtown Chicago, called Block 37, which has been put into receivership.