The city manager of Bloomington said it's time to raise the public profile of the issue of Eastland Mall improvement.
The mall at Route 9 and Veterans Parkway has languished for years with three vacant anchor stores and low occupancy. City Manager Jeff Jurgens said a full-scale redevelopment needs to happen.
"Maybe some housing, maybe some other retail or entertainment-type facilities. Maybe also some service facilities in there, whether it's medical or something else," said Jurgens.
He raised the idea of creating mixed use retail and housing structures on some of the vacant space. Vacant anchor stores such as the former Macy's, Bergner's, and Sears have been redeveloped into housing at decaying malls in other cities.
Jurgens said the city has confirmed mall owner Chattanooga, Tennessee-based CBL Properties is interested in redevelopment. A CBL spokesperson said it's "too preliminary to discuss future plans."
"Some of the property may need to be demolished and redeveloped in other ways. There could be a hefty cost with the redevelopment and that's something that we'll have to sit down and talk about with the property owner," said Jurgens.
Jurgens said the city encourages potential developers to approach both the city and CBL with project ideas.
“We're looking at how malls have been redeveloped all over the country, and whether it's some sort of a mixed-use development where we're seeing maybe some housing, maybe some other retail or entertainment-type facilities, maybe also some service facilities in there, whether it's medical or something else. But we think a full-scale redevelopment is truly what needs to happen on that property,” said Jurgens.
He said there are producing properties at the mall — Kohl’s, Ulta, Planet Fitness, and Outback Steakhouse among them.
“When we look at the data, there have been a lot of people there since the beginning of the year. The most recent data I have is we've, we've had over 1.7 million people or visits to the mall... We're just not convinced that it's still being used to its full potential,” said Jurgens.
Several times in recent years the mall has asked for property tax relief, asserting that the property value is less than assessors have determined.
The mall is in neither a Tax Increment Financing district nor an Enterprise Zone, two tools governments often use to spark re-development.
“I think anything would be on the table. There are certainly opportunities for those anchor stores to be developed into other uses, and we've seen that in other communities where they've taken an anchor store and they've developed housing in it, or they've developed other entertainment concepts within it,” said Jurgens.
Jurgens said some proposals have been discussed, but nothing has moved forward.
CBL Properties
CBL may be in a better position to move on any viable proposal at Eastland now than it has been in several years, though it may still not be an easy lift. The company filed for bankruptcy in 2020. It was not alone. Many tenants and other mall property companies also filed for protection at the time, hit hard by the pandemic and by years of declining sales at brick-and-mortar institutions.
At the time CBL owed more than $3.1 billion according to its filings. When it emerged from bankruptcy in 2021, the company had shed some $1.7 billion in debt, but still carried more than $1.4 billion in loans and notes on its balance sheet. In August of this year, CBL sold the Layton Hills Mall and outparcels in Utah. Its term loan and outparcel loan balances then were less than $1.1 billion. This year alone CBL said it has reduced its debt load by more than $126 million. As of June 30, 2024, the company reported it had $295.8 million of unrestricted cash and marketable securities.
“This is another step forward in our plan to meet the term loan principal balance extension test in November 2025,” said Stephen D. Lebovitz, CBL’s chief executive officer, in August.
The company has declared quarterly dividends this year and said it remains on track for its full year earnings projection of $1.60 per share. Last year the company had per share losses in those quarters.
“CBL’s second quarter financial and operational results reflected the growing strength of the retail real estate sector," said Lebovitz.
The company reported an 8.8% increase in average rents on new leases at its malls, lifestyle centers and outlet centers.
“2024 Same center net operating income grew by 1.5% over previous year’s half year report,” according to financial statements.
The company that now owns about 90 properties in 22 states has remaining challenges. Occupancy rate for CBL malls was 85.9% slightly in the first six months of the year, down from 88.2% in the same period last year. Part of that drop was from the bankruptcy of a major tenant, Rue 21 and Express. CBL said it expects Rue 21 stores to reopen under a new owner. CBL also owns lifestyle centers and other properties. Its overall occupancy rate was 88.7%, also down slightly from the previous period.
