Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Economic Development topic
No spam. Unsubscribe anytime.
Square Southtown team tells Effingham council legal delay has stalled mall takeover but plans a scaled "Plan B"
Summary
Developers behind the Phillips Square/Southtown mall told the Effingham City Council they prevailed at auction but an appellate stay has delayed closing; they described building deterioration, tenant losses and a revised phased redevelopment plan emphasizing entertainment and boutique retail.
Developers bidding to redevelop the Phillips Square (Southtown) mall told the Effingham City Council that legal delays have postponed their planned acquisition but that they remain committed to a phased revitalization.
"Our goal remains local ownership by Square Southtown," presenter Scott Gabbas said during a presentation to the council, outlining a vision that would reuse existing anchors, add entertainment options and reserve space for future health-care services.
Presenters said the city prevailed at auction last November but that the closing has been delayed by an appeal in the Fifth District appellate court. The team described a year of deterioration at the property — including roof leaks, fire-suppression and heating problems, and vandalism — and said two large tenants withdrew during the delay.
To reduce risk, the developers said they have shifted to a "Plan B" that prioritizes reuse of the Rural King and JCPenney buildings as the first wave of work, with other exterior and parking-lot improvements carried out as tenants sign leases. The presenters estimated the full project investment at about $11,200,000 and said they have held a $130,000 deposit since Nov. 4.
City staff confirmed the project is constrained by the pending appellate stay. "We're waiting on the appellate court to issue a decision," one city representative said, describing why city action is limited while litigation proceeds.
Developers argued the property can become a regional destination, citing local assets including 20,000 daily pass-through vehicles, an estimated 270,000 people within a 60-minute drive and existing nearby draws such as a nearby theater. They said ongoing tenant interest remains significant despite the legal uncertainty and that, if possession occurs, they expect to complete initial phases within 12–18 months.
Council members and the presenters discussed financing, potential tax and sales-tax impacts, and the sensitivity of tenant negotiations while the stay is in effect. Presenters emphasized they have invested in legal and planning work to prepare for construction once the court allows possession.
The presentation closed with expressions of mutual appreciation: developers thanked the city and community for support, while a council member said the city hopes the case will be adjudicated quickly so redevelopment can move forward.
