If you’re wondering why nothing obvious is happening at the closed Steeplegate Mall to convert it into a massive mixed-use development, consider the situation of the largest remaining tenant, JCPenney.

The retailer has sued the mall’s owner, Onyx Partners, which wants to tear down most of Steeplegate and build some 600 apartments as well as businesses such as Costco or perhaps Whole Foods. JCPenney, the only tenant that has been part of the mall since it opened, says the resulting noise and mess violate its lease, which runs through 2030. 

A temporary restraining order has placed the plans to redevelop the mall on hold. A filing made on April 7 said “the parties were close to coming to a resolution” and expect to settle the issue “without further court involvement.”

The suit dates back to last summer. Penney Property Sub Holdings says the change in use for the site violates the company’s lease, which dates back to the mall’s opening in 1989, and that the work raises concerns about safety and security.

Under the development plan, JCPenney would stay as a free-standing building while a trio of four- and five-story apartment buildings with underground parking and retail space would replace most of the mall and the adjacent Regal Cinema. Altitude Trampoline Park and The Zoo Health Club will also stay.

If this legal delay sounds familiar, last year the project faced a different suit from a different tenant. Onyx was sued by owners of the land under the TD Bank on the corner of the property, which had a condominium agreement with the mall and the separate Applebee’s restaurant on the property.

That suit argued that the city shouldn’t have approved plans to tear down most of the massive mall, which Onyx said was necessary because of ongoing vandalism. The suit was settled in December for $2.5 million, a little more than twice the bank property’s assessed value.

JCPenney was one of the mall’s four original anchor tenants along with Sears, which closed in 2020, and regional department stores that have since gone bankrupt, Sage-Allen, Steinbach, and later, the Bon-Ton.  

The mall’s interior closed in 2022 – JC Penney and other remaining outlets can be reached without entering the mall – and Onyx Partners of Massachusetts bought it in 2023. Last summer Onyx said that “urban explorers” were breaking into the closed building to make videos and sought city permission to tear down most of the mall for safety reasons. That work has not begun.