MARION -- In 2011, when a group of five investors became owners of Illinois Centre Mall, in Marion, they added a little gusto to the name, inserting the word “Star.” It was an addition that seemed to portend good times ahead for the struggling 1990s-era retail hub in one of Southern Illinois’s fastest growing cities.
Just five years later, three of the five Illinois Star Centre Mall owners or their close relatives are in prison for participating in a “pay-to-play” tax scheme in violation of the Sherman Antitrust Act under former Madison County Treasurer Fred Bathon. A fourth owner, in addition to those in prison, is named as a defendant in two pending federal lawsuits, one related to those Madison County activities – in which Bathon rigged tax sales to reward campaign donors – and another involving a similar scheme alleged to have taken place in St. Clair County. A fifth owner is named in the Madison County lawsuit.
Bars over closed and abandoned storefronts are now a common sign at the Illinois Star Centre Mall. Even the aptly named “Lucky Star” – an aging plastic children’s horse that rocks as it's fed quarters – hasn’t seen much action these days in the mall’s anemic play area. It’s located not far from a directory advertising the mall’s tenants, many of whom have already moved on, including a satellite office of The Southern Illinoisan, which hasn’t been there for several years.
At this stage, empty storefronts appear to outnumber filled ones, and fliers bearing the seal of the mall’s leasing agent lists the property for lease or sale. The Sansone Group’s sale flier on the company’s website touts the mall as a “major redevelopment opportunity in Southern Illinois” and says a renovation plan is under way. It does not list an asking price for what is advertised as a 392,304-square-foot mall on 9.36 acres. Neither the anchor stores, nor the parking lot, which all are under separate ownership, are part of the sale. It’s unclear to the newspaper how long the mall has been on the market.
Part of a trend?
Malls seem to have struggled across the country to maintain relevance and keep tenants as the Internet and open-air shopping destinations have lured customers away. And certainly, Marion’s mall faces the same challenges as others with some business happenings out of its control.
For instance, there’s not much Illinois Star Centre Mall management can do to retain teen retailer Deb Stores, which has marked down its merchandise as it prepares for closure in the wake of its holding company filing for bankruptcy in December.
Other problems at Marion’s mall appear to be unique to Marion’s mall – including that the majority of owners are imprisoned and employees of the leasing agent Sansone Group, according to some tenants, are unresponsive and appear less than eager to fill spots. At least six calls made by the newspaper to the St. Louis-based Sansone group, and one of its leaders, Jim Sansone, were not returned.
Another rub with tenants is the neglected parking lot that has an entirely different Florida-based owner who has tangled with store and mall owners over maintenance costs. Parking lot owner Vinod Gupta, of Boca Raton, Florida, lost a lawsuit and 2013 appeal in attempting to force tenants to pay rent for use of his lot. Contacted last week about maintenance of his lot, Gupta said: “Everything is not real clear so I cannot help you in the moment, but hopefully in three or four months things will clear up a lit bit.” He refused to be more specific, stating it is a legal matter.
Other problems reported by tenants include vacated food stands that have been unable to draw tenants, and leaky ceilings in some stores. The only business operating in the food court is Subway.
Of note, properties occupied by the anchor stores – Sears, Target and Dillard’s – are owned by separate companies. Those anchor stores continue to generate steady traffic to the mall, though many people report entering and exiting those stores from the outside, and rarely venturing into the mall’s interior. The locations that house Target and Dillard’s are owned by their respective corporate parents, and Sears is owned by New York-based Igal Namdar, who is the president of Namdar Realty Group.
But in the heart of the mall, Marion is quickly losing tenants, as other area malls are thumping along – even thriving by some accounts. The Times Square Mall, in Mount Vernon, has reportedly turned a corner. Parent company spokesman Joe Bell reported that the Kentucky Oaks Mall in Paducah is more than 90 percent occupied and underwent a multi-million dollar facelift just four years ago, around the same time the Marion mall was coming under new ownership.
Further, Marion’s mall is struggling to hang on at a time when Marion itself is growing and adding new businesses to its tax rolls. In fact, the area around the mall is doing quite well, with Walmart, restaurants and Black Diamond Harley Davidson, among other businesses.
Closing up shop
In the mall’s interior, a few popular stores remain, including Bath & Body Works, Kay’s Jewelers and Payless ShoeSource, but the closure of locally owned Country Porch, a fixture for 15 years, as well as the Country Gourmet, is going to leave another large hole.
Store owner Brenda Cody said she often hears people say that malls are a thing of the past, seemingly blaming the decline of the Marion mall on shifting trends in retail.
“I don’t buy that for one minute. Get a good mall with good stores and people would rather come to a mall than a strip mall,” said Cody, who recently closed the stores. “I don’t believe they are a thing of the past. Your issue is the stores you get. You have to have a draw and there’s not a draw here.”
Cody’s reasons for moving out are twofold. Her husband just accepted a job in St. Louis, so the family is moving, but she wasn’t planning to renew her lease anyway when it came up in May, because of concerns over the mall’s future, she said.
“I believe the city does need to step in,” she said as she boxed up what didn’t sell in her final days. “Their hands may be tied as far as this is a privately owned mall, but the city is going to wake up one day and find an empty mall and it’s going to be a blight on the city.”
Her store’s closing ends an era for the countless shoppers who visited the mall for her custom-made furniture, homemade country treats, gifts and other items, and also leaves another nearly 10,000-square-feet vacant. Next door to Country Porch, boutique retailer Sisters Three, is also advertising a going-out-of-business sale.
Not an easy topic
Against this backdrop, even discussing the mall’s future is apparently a touchy subject in Marion. An employee who answered the phone in the mall’s management office said the mall’s manager Janet Brooks would not comment, and would prefer that The Southern Illinoisan not write this story.
Attempts to reach the business entities that are listed as the corporate owners of the mall were unsuccessful. An employee who answered the phone at Rochman Investment Group, in Carbondale – once headed by the now imprisoned Barrett Rochman, the only mall owner from this region -- directed the newspaper to the mall’s leasing agent, the St. Louis-based Sansone Group, whose representatives did not return calls.
The Sansone Group and other partners purchased the Mount Vernon mall in the summer of 2012 and have reportedly helped breathe new retail and service life into the building. Tenants at the Marion mall are confused about why they cannot do the same here. The Sansone Group is not an ownership partner of the Marion mall. News reports indicate the Sansone Group has been the mall’s leasing agent since at least September 2013. Signs posted on empty storefronts list the local Sansone contact as agent Karen Shaw. An email from the newspaper to Shaw seeking comment was not returned.
Mall associates weren’t the only ones who shied away from the conversation about the mall’s future. Dalus Strusz, director of the Marion Chamber of Commerce – advertised as the city’s “collective voice of business” – declined comment.
Ashley Gott, the chamber’s board chairman, said of the business organization, “We’re here to support any business that’s a member of our community, and anything we can do to help promote them in a better manner, we’re more than willing to do.” However, short of being a cheerleader for success, Gott said he doesn’t believe there’s much else the chamber can do.
As it stands, the mall owes the city of Marion about $2.3 million to repay a bond issued before the mall was under construction in the late-1980s. That’s the amount the city treasurer said is remaining on a roughly $3 million, 10-year bond refinanced in 2012. Marion Mayor Robert Butler, who was mayor when the mall was built, said the city issued a roughly $6 million, 30-year bond upon construction.
Butler said last week, he’s not concerned about the city being left on the hook for the money.
“Up to this point, there’s never been any question about making the money to pay for the debt service on the bond and we expect that will continue,” the mayor said. Asked if there’s any scenario under which the city could lose taxpayer dollars, Butler said, “I know you’re looking at the worst possible scenario, but we at this point in time are not concerned about the debt service.”
Butler said there’s not much he can do at this point – short of keeping his door open in an offer to assist – because the mall is a private venture. But at its conception, the city, under Butler’s leadership, was eager to lend a helping hand.
Court records show that the city intended to create a tax-increment financing district comprising 260 acres of farmland on property known as Broeking Farm, with operations dating back to 1840. The TIF was created in 1989 to generate an $18 million subsidy to developers of a shopping mall, it stated. Those efforts were thwarted by a lawsuit filed by Marion developer J.D. Castellano, who argued that the city was not justified in creating a TIF because it could not meet the threshold of eliminating blight.
However, the court document stated that the city agreed to provide an $18 million subsidy from “alternate financing options” if the Illinois Centre TIF was declared invalid, as well as $6 million in special service area financial assistance. Butler did not address any other funds provided by the city outside of the $6 million bond issuance in two separate interviews, and it was unclear to the newspaper at deadline the total contribution made by taxpayers to the project.
Of the state of the current mall, Butler said it’s sad that the majority of the owners “really had no experience in mall operations.” He surmised that those who became owners in 2011 intended to “purchase it at a reasonably low figure and turn around and sell it.” But Butler said that, contrary to popular belief, the mall was not purchased in a tax sale, only the parking lot.
The Fifth District Appeals Court, in its ruling against parking lot owner Gupta, states that the previous owner, Illinois Centre Associates, did not keep current with its real estate taxes, and that in a tax sale, Gupta obtained the parking lot, and Illinois Star Centre, LLC, the current owners, obtained the mall. The court document says the tax sale was in 2007, and that Gupta obtained the deed to the parking lot in late 2010.
It was between 2005 and 2008 that Madison County Treasurer Bathon permitted tax buyers, including the convicted mall owners, to charge distressed homeowners inflated interest rates in exchange for campaign contributions.
“I know things could be, should be and ought to be better,” Butler said. “With three in prison, it makes it difficult. I recognize that. But something you’re overlooking is that because the mall was there in the beginning, that whole area has blossomed into a tremendous economic engine.”
Four years after the purchase, the Illinois Star Centre’s website still boasts “New ownership. New attitude.” The only local owner, Rochman, 72, was sentenced to 16 months in federal prison in March 2014, and has a scheduled release date of June 2015. One of the mall’s owners is listed as Sabre ISC, LLC., which lists Kenneth Rochman as the principal. Barrett Rochman also is known for other signature current or former local properties, including Blue Sky Vineyards, Fred’s Dance Barn and the fantasy-themed Boo Rochman Memorial Park on Giant City Road, dedicated to Rochman’s son, Jeremy “Boo” Rochman, who died in a car accident when he was just a teenager.
Another corporate member of Illinois Star Centre, LLC, is John Vassen, 58, of O’Fallon, who was sentenced to 24 months in prison in February 2014 and has a scheduled release date of December 2015. He is listed as the principal of VI, Inc.
Also sentenced in February 2014 was Scott McLean, 53, of Belleville. He was sentenced to an 18-month prison term and has a release date of July 2015. Another company member, Mississippi Valley Properties, lists its only member as Tracy McLean, of Belleville.
Another owner, Decatur-based Empire Tax Corp., is headed by Dennis Ballinger Jr. He did not return phone calls seeking comment, nor did Scott Sieron, the president at Belleville-based Raven Securities, Inc., the fifth mall owner.
Timothy Sansone, an attorney with Sandberg Phoenix & von Gontard, one of the attorneys representing several of the defendants in the federal lawsuits filed related to the Madison County tax sale scheme, also did not return a phone call seeking comment. It was unclear to the newspaper if there is any familial relationship between attorney Timothy Sansone, and Jim Sansone, the provided contact for the mall’s leasing agent, the Sansone Group.
Lisa Slinkard, the 12-year owner of The Learning Zone, a teacher supply store just outside Dillard’s, grew emotional as she explained her frustration with the mall owners and the leasing agent.
“It upsets me to see the way the mall is going down,” Slinkard said. “My dreams are just being washed away because of it. … I’ve invested everything I have into it. It was going to be our retirement. … I’d just like to see it turned around. But with the owners we have now, I just don’t know if that’s going to happen.”
The convicted mall owners are serving their time at the Marion federal penitentiary, located about 13 miles from the Illinois Star Centre Mall.