JCPenney lawsuit stalls Steeplegate redevelopment; potential 'resolution' in the works

Yahoo

14-04-2025

The redevelopment of the Steeplegate Mall in Concord remains on hold after long-term tenant JCPenney sued last year, but it appears the differences might be hashed out outside of court, according to court papers.
This is the second lawsuit the owners, Onyx Partners, have faced in bringing forward a plan to tear down the majority of the mall structure in favor of a mixed-used development with Costco, shops and apartments. The JCPenney building would remain, according to the plans.
Penney Property Sub Holdings, LLC claims Onyx violated the terms of the lease, which has been in place since 1989, by failing to work with JCPenney on the plans, according to the lawsuit. Last year, the department store extended its lease until July 31, 2030.
Last summer, JCPenney gave Onyx two cease-and-desist letters advising the owner they were in violation of the lease, 'including the covenant of quiet enjoyment, the covenant that the mall will remain a mall, the covenant that the mall will remain solely for retail, and that the mall will be maintained in a safe, clean, sightly and sanitary condition.'
An agreement would have to be reached for the work to happen, according to the suit.
The project also faced another lawsuit by the owners of 277 Sheep Davis Road. Onyx bought the property for $2.5 million to end the litigation.
In August of last year, Judge John Kissinger ordered Onyx to stop all construction and demolition work at the mall under further hearings are held or an agreement is reached.
A status conference planned for earlier this month was canceled as the two sides continue to work on a resolution.
'The parties have been making good faith efforts to attempt to resolve the underlying disputes and expect that they will be able to do so without further Court involvement within the ninety (90) day continuance requested,' attorneys Matthew Johnson and Kaleena Machado for Devine, Millimet & Branch wrote in a filing on April 7.
The plans call for tearing down 425,000 square feet of the 550,000-square-foot building while keeping some of the existing structure, which includes JCPenney and the Altitude Trampoline Park. The Zoo Health Club will relocate to another part of the building that won't be demolished, according to the plans.
The second cease-and-desist request, which was included in court documents, cited 'security and safety' with work being done on the property. The letter cited work that exposed alarm and electrical wires.
'Tenant advised Landlord of Tenant's continued opposition to the foregoing redevelopment and change in use and name of the Shopping Center, and that any action taken by Landlord, or on Landlord's behalf, in furtherance thereof would be deemed to be in violation of the Lease,' the request read.
The interior of the mall has been closed since March 2022 after a steady decline in tenants since the mall opened in 1990.
The first structure as part of the redevelopment is planned to be a 120-unit apartment building, construction for which is expected to begin in the summer 2026.
The plans call for a total of 600 housing units within three buildings. The other two will have 310 and 170 units, respectively.
A status conference is scheduled for July.