TEXAS CITY — The company that owns Mainland City Centre has entered Chapter 7 bankruptcy, marking the latest financial turn for a Texas City property that has undergone ownership changes, declining retail occupancy and redevelopment over the past 35 years.

JMK5 Mall of the Mainland LLC filed for Chapter 11 bankruptcy protection June 2 in the U.S. Bankruptcy Court for the Southern District of Texas. Federal court records show U.S. Bankruptcy Judge Alfredo R. Pérez signed an order Sept. 3 converting the case to Chapter 7 and a trustee was appointed.

But financial uncertainty at the property stretches back decades.

Mall of the Mainland opens

Mall of the Mainland opened in 1991, according to the City of Texas City’s official historical chronology. Historical accounts identify the Edward J. DeBartolo Corp. and MG Herring Group as developers of the mall.

Its major department store anchors included Dillard’s, Sears and JCPenney. Foley’s later joined the mall in 1994.

Edward J. DeBartolo Sr., one of the country’s most prominent shopping mall developers, died in December 1994 at age 85. Contemporary reporting identified his son, Edward J. DeBartolo Jr., as chairman of DeBartolo Realty Corp. at the time.

Two years later, Simon Property Group agreed to acquire DeBartolo Realty in a transaction valued at about $3 billion, creating Simon DeBartolo Group.

Signs of trouble

By the time of the Simon-DeBartolo merger, Mall of the Mainland was already showing signs of trouble.

An October 1996 filing with the Securities and Exchange Commission listed Mall of the Mainland at 779,014 square feet and only 56.2% leased. The filing showed Simon DeBartolo held a 65% interest in the property and listed Dillard’s, JCPenney, Sears and Foley’s as anchors.

The mall reached another major turning point the following year.

The Houston Chronicle reported in 2002 that the mall’s lender took control of the property in 1997 after the developer failed to make it a successful retail venture. J.P. Morgan Chase Bank was identified as the lender.

An investment group headed by Bob Yari and Kam Mateen purchased the property in 2002.

At the time, the mall was about 65% occupied. The Chronicle reported the property faced significant competition from Baybrook Mall and had also been criticized for its limited visibility from Interstate 45.

More ownership changes

The ownership changes continued.

Brentwood Group No. 1 Ltd. purchased Mall of the Mainland in 2007. By 2010, the ownership entity had filed for Chapter 11 bankruptcy protection. The Houston Chronicle reported lender Pacific Western Bank later took back the property and brought in Boxer Property Management to manage the mall.

At the same time, Mall of the Mainland was losing the department stores that once anchored it.

JCPenney left the mall in 2006. Dillard’s did not reopen after suffering significant damage from Hurricane Ike in 2008, according to the Houston Chronicle. Macy’s, which had replaced Foley’s, announced in 2012 that its underperforming Texas City store would close.

By early 2014, the enclosed portion of Mall of the Mainland had shut down, although Sears, Palais Royal and Cinemark remained open with exterior access.

Karam redevelops the property

Another effort to revive the property began in 2015.

Jerome Karam and an out-of-state partner finalized the purchase of the former mall that year, according to contemporary reporting. Texas City Economic Development Corporation records also show JMK5 began redeveloping the property in 2015.

The site was eventually renamed Mainland City Centre and shifted away from the traditional enclosed-mall model toward a mix of entertainment, dining, fitness, offices, education and other uses.

Karam told KGTX 7 he purchased the mall when it was largely empty and invested millions of dollars into redeveloping the property. He said some portions succeeded while others faced difficulties, including problems involving some tenants.

Karam said the property became profitable before facing more recent hardships and said plans now include selling the middle portion of the mall to another owner.

“We will come back stronger,” Karam said.

Now, more than three decades after a lender first took control of Mall of the Mainland in 1997, the property is again tied to a court-supervised financial proceeding.

The Sept. 3 conversion to Chapter 7 does not by itself determine the ultimate future of Mainland City Centre. It does, however, mark another turning point for a property that has repeatedly changed ownership and purpose since opening in 1991.