Sunland Park Mall owner files Chapter 11 bankruptcy reorganization due to COVID-19 fallout

Written by MLHA Team

June 22, 2021

It will be business as usual for now at Sunland Park Mall, El Paso’s second-largest shopping center, after the company that owns it filed for Chapter 11 bankruptcy protection Sunday.

Ohio-based Washington Prime Group’s operations were damaged by the COVID-19 pandemic fallout, according to a company statement.

The mall, located at Interstate 10 and Sunland Park Drive in West El Paso, was struggling long before the pandemic after losing major retail tenants in recent years.

Company officials in a news release said operations will continue as usual at its 102 retail centers during the bankruptcy reorganization process.

It secured $100 million in new financing for day-to-day operations, the company reported.

“The COVID-19 pandemic has created significant challenges for many companies, including Washington Prime Group, making a Chapter 11 filing necessary to reduce the company’s outstanding indebtedness,” a company statement said.

The company will remain in business, but officials in a bankruptcy Q&A sheet did not rule out selling the company in the future.

Its stock price closed at $3.38 per share Monday, down $1.46 per share on the New York Stock Exchange.

More: Mall owner Washington Prime Group files for Chapter 11 bankruptcy protection, citing COVID challenges

The mall’s customer traffic declined substantially in recent years after it lost several major retail anchors, including Macy’s, Sears and Forever 21. Cinemark last year closed its six-screen Movie Bistro there.

El Paso’s Starr Western Wear bought Macy’s mall building and opened a store there in  2018.

Two Dillard’s department stores are the mall’s other major retail anchors.

The 918,476-square-foot mall’s 67.4% occupancy at the end of 2020 was the second-lowest occupancy in Washington Prime’s portfolio, company financial documents show. More than half its retail centers had occupancies above 90% at the end of last year, data show.

Sunland Park Mall in recent years has brought in mostly small retailers, service providers and food outlets, including many local ones, to fill vacancies. Last week, mall management announced the opening of seven new food-court outlets and five new small stores.

Mall management also has taken other measures to try to increase customer traffic, including opening a private volleyball court inside the mall for an El Paso volleyball club.

It has about 90 tenants, including retail stores, service providers, and 17 food and beverage outlets, according to the mall’s online directory and other mall information.

It even has a church, Sound Word Worship Center, as a tenant.

Sunland Park Mall’s General Manager Kelley Baker referred questions about it to a Washington Prime spokesperson, who said in an email that Sunland Parks’ operations, including leasing and property management, would continue as usual during the bankruptcy reorganization.

The 32-year-old mall’s more than 900,000 square feet make it El Paso’s second largest retail center behind Cielo Vista Mall’s 1.2 million square feet.

Sunland Park’s property valuation has declined substantially in recent years. The El Paso Central Appraisal District’s proposed 2021 tax-tied valuation of the mall is $26.5 million — down 37% from $42.1 million in 2016, district data show.

Vic Kolenc may be reached at 546-6421; vkolenc@elpasotimes.com@vickolenc on Twitter.

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