Sunland Park Mall Owner Goes Bankrupt | Local News
Malls are dying across the country, with plenty of images and examples of decaying giants, once fashion, trading and mall pizza houses.
So it wasn’t a huge surprise last week when Washington Prime Group, the company that owns Sunland Park Mall in West El Paso and many others across the country, announced that it had filed for bankruptcy. (chapter 11).
But filing for bankruptcy doesn’t mean Sunland Park Mall will close its doors anytime soon. On Friday afternoon, the mall was full of shoppers looking to wander away from the heat.
Bob Ayoub, an executive at El Paso-based retail developer Mimco, said the bankruptcy announcement was not serious news, but rather a large company using Chapter 11 to help restructure its debt .
As part of the bankruptcy proceeding, Washington Prime Group is seeking to reduce its balance sheet by approximately $ 950 million, according to a press release.
“It’s a refinance, just a big business using the bankruptcy court and a process to refinance the debt. It happens a lot, and part of it is their lenders convert equity, restructure loans, ”Ayoub said. “They say it’s a great move for Washington Prime.”
He said bankruptcy does not speak for the rest of the retail market in El Paso, which returns regularly after months of uncertainty fueled by the pandemic.
“We’re seeing a lot of activity on the rental side,” Ayoub said. “There is a tremendous amount of activity in the market and we are very excited about the rebound from last year. “
Washington Prime announced the bankruptcy filing on June 13. The Ohio-based real estate group owns lower performing properties that were once owned by Simon Property Group, which still owns Cielo Vista Mall in east-central El Paso.
Kelley Baker, general manager of Sunland Park Mall, was unable to comment on the bankruptcy announcement.
According to a press release, the Washington Prime Group in the bankruptcy proceedings will have access to $ 100 million in “debtor-in-charge financing” to continue the day-to-day operations of its 103 properties across the country.
“The financial restructuring of the company will allow WPG to resize its balance sheet and position the company for success in the future,” Lou Conforti, CEO and Director of Washington Prime Group, said in a press release. “During the financial restructuring, we will continue to work to maximize the value of our assets and our operating infrastructure. The company expects operations to continue in the normal course for the benefit of our customers, tenants, suppliers, stakeholders and colleagues. “
Washington Prime cites the impact of the pandemic on shopping malls for its need to file for bankruptcy.
While the Sunland Park Mall isn’t as busy as Cielo Vista, there have been efforts to revamp the retro space, which still has its iconic pink marbled tiles from its heyday in the ’90s.
There is now a private regulation size volleyball court used for practice by the Wolf Pack Volleyball Club. The mall also recently announced the addition of 12 new tenants, including a Boba tea store, fabric store, and eyewear store.
But like almost all “non-essential” and in-person retailers, the COVID-19 coronavirus pandemic has wrecked business and impacted sales for a year.
As more people get vaccinated and others feel more comfortable returning to life in person, malls and other retailers are still striving to bring customers back.
“Indoor shopping centers have been under pressure for a very long time,” said Adam Frank, president of River Oaks Properties. “The concept has degraded and COVID has destroyed many indoor malls. I would say we get several calls per week from tenants in Sunland Park and Cielo Vista who want to move into our malls.
While El Paso’s three indoor malls have mostly remained important spaces in the city, there is no rush here or elsewhere to build new ones.
Instead, the city is flush with the development of outdoor malls and shopping centers, often anchored in high-traffic department stores.
While it’s still unclear what the long-term future of the Sunland Park Mall is after Washington Prime filed for bankruptcy, Frank said the location is a prime location for something like mixed-use redevelopment.
“In other markets you see (shopping malls) being redeveloped,” Frank said. “You also see scavenger shoppers trying to come in and buy really cheap and not do much. They collect the rents, get the returns and move on. It’s not ideal for El Paso. El Paso is a booming market, not a dying market, and there is certainly an opportunity for someone to redevelop themselves.