Lindale Mall operations to continue during parent company’s Chapter 11 bankruptcy

Lindale Mall Cedar Rapids
Lindale Mall in Cedar Rapids. CREDIT RICHARD PRATT

UPDATED: Operations at Lindale Mall will continue uninterrupted for the time being, despite the Chapter 11 bankruptcy filing June 13 by the mall’s parent company, Washington Prime Group, according to company officials.

“It’s business as usual at Lindale Mall,” Washington Prime Group spokesperson Kim Green said via email. “The COVID-19 pandemic has created significant challenges for many consumer-facing companies, including Washington Prime Group. The company has determined that the Chapter 11 path is the most effective next step to resolve the company’s outstanding indebtedness as we emerge from the pandemic. Throughout the Chapter 11 financial restructuring, we expect business as usual at Lindale Mall, where our tenants, sponsors and employees will continue operating as normal, with a focus on providing enjoyable experiences for our guests.”

The Columbus, Ohio-based company, which also owns Southern Hills Mall in Sioux City and nearly 100 other mall properties nationwide, said in a release that it has secured $100 million in new financing that will allow “all business operations [to] continue in the ordinary course without interruption.”

“The company’s financial restructuring will enable WPG to right size its balance sheet and position the company for success going forward,” Washington Prime Group CEO and director Lou Conforti said. “During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure. The company expects operations to continue in the ordinary course for the benefit of our guests, tenants, vendors, stakeholders and colleagues.”

A Chapter 11 bankruptcy is a business reorganization plan, often used by large businesses to help them stay active while repaying creditors.

During the height of the COVID-19 pandemic in 2020, Washington Prime was forced to close some properties for a time, resulting in its rental income plummeting about $127 million from 2019 levels, Reuters reports.  During the first three months of this year, the company’s rental income was off around $20 million compared with the same time in 2020.

As previously reported in the Corridor Business Journal, a recent Barclays Capital report indicated the COVID-19 pandemic is likely to cull between 15% to 17% of U.S. malls, which will no longer be “viable as shopping centers.” And an alarming Bloomberg report found that U.S. mall values plunged an average 60% after appraisals in 2020, erasing about $4 billion in value from 118 retail-anchored properties with commercial mortgage-backed securities debt in what one analyst called “an eye-popping decline.”

Washington Prime Group made news in early March when a Securities and Exchange Commission filing indicated the company had withheld a $23.2 million interest payment due Feb. 15.

Lindale Mall officials say the mall is well-positioned to evolve with changing times in the retail world. A new Planet Fitness is in the works, with construction expected to wrap up in October, according to mall general manager Becky Eckley.

Ms. Eckley said in March that foot traffic was up at Lindale since vaccines have begun being distributed, and the mall was preparing for an even bigger increase going into the spring and summer seasons.

“We want Lindale Mall to be thought of as the community hub in the Cedar Rapids and surrounding area,” Ms. Eckley said in an email. “Through offering a wide variety of retail options and a robust calendar of events for the whole family, we want to be the place people think of coming when they need something to do.”

Lindale has also adjusted to the pandemic by offering Retail To-Go, which allows guests to place orders with select retailers by phone, online or via mobile app and pick up purchases curbside without leaving their vehicles.

Lindale Mall opened in September 1960 as an open-air mall, then known as Lindale Plaza. The mall was enclosed in 1980, and a major expansion project in 1997 added a parking ramp and food court to the original mall structure. A partnership led by the Simon Property Group purchased the mall in 1998, and later spun off the property as Washington Prime Group, which currently owns and manages the mall.

Lindale lost two longtime anchor stores in 2018, when both Sears and Younkers closed their Lindale locations. Von Maur is now the mall’s sole anchor store.