LINWOOD — The owner of the city’s largest commercial center filed for Chapter 11 bankruptcy protection this week in Delaware.
CCC Atlantic LLC, owner of the Cornerstone Commerce Center on New Road, owes more than $400,000 to its 20 largest unsecured creditors, which include law firms, building contractors, landscapers and office cleaners, according to documents filed Thursday in U.S. Bankruptcy Court.
The development company has been in a protracted battle with Linwood over its efforts to expand its footprint with new commercial space at its sprawling campus across from Mainland Regional High School.
Delays in completing Phase 2 of the center’s expansion — along with stagnation in rents caused by the recession and 2008 national real-estate collapse — contributed to the company’s financial turmoil, managing partner Robin A. Karman said in a statement Friday. He declined to answer questions.
“We had expected to have final approvals over a year ago, which would have offset revenue,” Karman said. “But instead, we have spent hundreds of thousands of dollars and are no further along.”
Karman said the decision to file for bankruptcy protection was a temporary move while her business reorganizes.
“We believe that we will be reorganized and out of filing within six months,” she said.
The center is Linwood’s largest commercial ratable and generates more than $800,000 in city property taxes each year, Mayor Rick DePamphilis III said.
He was surprised to learn of the center’s filing Friday.
“I tell you, I’m at a loss for words,” he said.
DePamphilis said the center gave the town no prior indication of its financial troubles.
“None whatsoever. I thought they were 98 percent rented and everything was fine,” he said.
Tenants at the 250,000-square-foot center include the FAA Technical Center, professional and medical offices, a bagel shop, a Chinese restaurant and a nail salon, among others that were added as part of a $35 million expansion project eight years ago.
“That’s our largest ratable,” DePamphilis said. “We certainly don’t want anything to happen to that. We’re going to have to look into it to see if there’s anything we can do to help.”
The company listed assets and liabilities of more than $10 million but less than $50 million.
Tenants at Cornerstone such as Yanling Li, owner of Tranquillity Spa, said they had no inkling of the owners’ financial straits.
Li, of Ventnor, said the center has more vacancies than the 98 percent occupancy it advertises on its website.
“I see a lot of empty spaces,” she said. “It’s tough. The rent is high here. They don’t get a lot of traffic in here.”
Christopher Longo, who owns Elite Hair Salon & Spa, said he thinks the filing will have no practical effect on the center’s tenants.
“I’m surprised, but to me it’s a necessary move. I think it’s a way for the business owners to revamp and restructure,” he said.
Longo, who lives in Egg Harbor Township, said the center has just a few vacancies to his knowledge. His spa celebrated its one-year anniversary last month and could not ask for a better location.
Longo said he has strong confidence both in the center’s future and its owners.
“It’s a great shopping center, the nicest in the area. They don’t do anything for personal gain. They do it for the benefit of the shopping center,” he said. “I love it here.”
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