The announcement last week that Wausau Center mall owner CBL will default on its $18 million mortgage and return the property to the bank means city officials are now searching for a new owner to keep the mall standing.
The default comes five months after city officials approved loaning CBL $4.1 million in order to move Younkers into a renovated former J.C. Penney’s store location, a move which was to be the first of many mall improvements. CBL never received the funds, because they never signed the development agreement. Then on July 13 Wausau issued a non-payment notice to CBL because the company was dragging its feet on the deal and owed potentially tens of thousands of dollars in back rent.
Mayor Robert Mielke, at a news conference last week, said CBL's default was "not a surprise," and that the city is focusing on the best way to move forward. City officials refused to say what bank is involved.
Mielke, one of three to oppose the mall bailout while he was a council member, said the delivery of a non-payment notice was meant to be a “shot across the bow, if you will.”
It’s unclear where the default leaves the mall itself, and whether a bank would be any more amenable to working with the city than CBL was. Leaders say they will meet with mall officials to keep them informed.
The move could also leave the mall without any anchors whatsoever. Of the three anchor spaces, only Younkers remains in business. CBL officials said in February that Younkers would leave the mall if they couldn't relocate, but that move relied on those now-nonexistent city funds. CBL CFO Farzana Mitchell and press relations for Younkers owner Bon-Ton did not respond to requests for comment.
CBL is one of the largest mall management groups in the nation but has had a string of recent defaults, according to media reports. Lenders took over two CBL malls in South Carolina and one in Ohio in 2014, and the company is being sued for defaulting on a $140 million loan for its St. Louis mall. Then in May, Wells Fargo Bank won a $212 million judgment against CBL and a co-owner after the company defaulted on its loan for a mall in Fort Meyers, Florida, according to court records.
Mielke says all options are on the table, including the city itself assuming ownership of the property. "If CBL won't commit to reposition the mall, we'll find an owner who will," Mielke says.