Mall owner files bankruptcy. What does it mean for St. Clair Square?
St. Clair Square in Fairview Heights and more than 100 other malls and shopping centers owned or managed by CBL Properties in 26 states will continue to operate as usual, despite CBL’s bankruptcy filing this week.
That’s according to a CBL news release posted on its website Monday.
“(CBL and sister companies) have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas in Houston ... in order to implement a plan to recapitalize the company, including restructuring portions of its debt,” it stated.
Michael Hagen, general manager of St. Clair Square and CBL-owned South County Center in St. Louis, couldn’t be reached for comment Monday, nor could Marketing Director Christine Poehling.
CBL also operates West County Center in De Peres, Missouri, and Mid Rivers Mall in St. Peters, Missouri. St. Clair Square, which opened in 1974, was purchased in 1996 by CBL & Associates Properties, based in Chattanooga, Tennessee.
Paul Ellis, economic development director for the city of Fairview Heights, said Monday the Chapter 11 filing seems to be a positive development.
“I think they’re going to come out of this better off than they would have been otherwise,” he said.
Malls across the country have had trouble collecting rent from tenants due to the COVID-19 pandemic, which closed restaurants and retail stores in the spring and still is prompting many consumers to stay home and shop online.
Ellis said Fairview Heights officials have kept in contact with CBL representatives, including CEO Stephen Lebovitz, in the past two months. The company indicated in August that bankruptcy was a possibility.
“(Lebovitz) reaffirmed his commitment to the community and to St. Clair Square,” Ellis said.
People come from miles around to shop at St. Clair Square, which is considered a vital economic driver in Fairview Heights. Before the coronavirus hit, the mall’s stores provided more than 20% of the city’s sales-tax revenue.
St. Clair Square closed in late March, when Illinois Gov. J.B. Pritzker ordered a shutdown of restaurants, retail stores and other businesses due to COVID-19. It reopened on June 1.
The Chapter 11 filing will protect CBL from creditors and allow it to keep operating during the reorganization period. The company has estimated its assets at $1 billion to $10 billion and the same for its liabilities.
“After months of discussions and consideration of a number of alternatives, CBL’s management and the Board of Directors firmly believe that implementing the comprehensive restructuring ... will provide CBL with the best plan to emerge as a stronger and more stable company,” Lebovitz stated in the news release.
“With an aggregate of approximately $1.5 billion in unsecured debt and preferred obligations eliminated and a significant increase to net cash flow, upon emergence, CBL will be in a better position to execute on our strategies and move forward as a stable and profitable business.”
Some of CBL’s biggest renters have already filed for bankruptcy. Ellis said that action proved beneficial for J.C. Penney, which has operated a store at St. Clair Square since 1976 and began its Chapter 11 reorganization in May.
Bloomberg reported on Monday that “analysts have long predicted a shakeout in malls and strip shopping centers serving less affluent areas, which dominate CBL’s roster.”
This story was originally published November 2, 2020 at 2:13 PM.
