CHARLESTON — Belk is clapping back about changes being proposed for Mount Pleasant Towne Centre as the oldest and largest anchor tenant — and the department store operator isn’t mincing words.
The Charlotte-based retail icon's name and financial status have come up repeatedly as Continental Realty Corp. seeks to shore up future plans for the property it's owned since 2020.
The Baltimore firm and a Charleston-based investment partner are seeking approval that would allow them to include housing, office space and other diverse real estate uses, if, by chance, Belk or the nearby Palmetto Grande theater move out unexpectedly.
The hitch is that the changes require town officials to amend the original development agreement that was approved in the late 1990s.
When the plans went back before the Mount Pleasant Planning Committee on Aug. 4, representatives of Belk's management showed up in force.
And they insisted the company isn’t going anywhere.
Sarah Eck, the manager of the Mount Pleasant store, expressed frustration that the company wasn’t looped in earlier in the process. She said she was "shocked" and “equally disappointed” that plans and applications were introduced publicly without Belk’s input.
Eck also reminded officials that the retailer has operated for 27 years as a legacy tenant in East Cooper's largest retail destination and has paid “millions" in taxes and other financial contributions "to the Mount Pleasant community.”
Belk also holds long-term leases for both its main department store and its smaller nearby men's outlet, with options that allows them to remain at Towne Centre until 2043 and 2053, said Janet Smith, senior vice president of strategic initiatives.
She also sought to correct public misconceptions and online rumors that Belk is in receivership, a likely reference to the company’s quickly resolved 2021 bankruptcy and a subsequent debt restructuring last year.
“We've met all our obligations at Towne Centre,” Smith said. “We're financially strong, and we are not in bankruptcy.”
She further noted that the owners of the 510,000-square-foot shopping center don’t have the legal right to move forward with most of the new uses they've submitted to the town.
“First, in our lease, new construction is only allowed in the existing building areas or other specified permitted building areas. Building in most of the parking lots, sidewalks, drive lanes or green space is not permitted,” Smith said.
She added that the real estate agreement "limits almost all building heights to 35 feet,” while the new plans call for taller structures of about 55 feet.
Smith said the lease restrictions “were carefully negotiated” years ago to support Belk’s original decision to open a full-service store at Towne Centre. At the time, the terms were aligned with the Mount Pleasant's retail-focused zoning goals, she added.
“Belk respectfully asks that any approved plans be realistic and feasible, and the current one is not,” Smith said. “It does more harm by publicly outlining a speculative contingency that may never occur than it would if the owner simply returned to the town when redevelopment is actually needed.”
Rob Nickel, Belk's regional vice president for the South Carolina coastal region and a Mount Pleasant resident, said that adding housing to the shopping center would alter the character of the retail property.
He also dismissed oft-cited concerns about a large space that's been empty at Towne Center since Bed Bath & Beyond closed more than a year ago. The overall vacancy rate remains low and within national averages, Nickel said.
No pushing
Continental Realty attorney Jay Claypoole and the chief executive officer of The Beach Co., which disclosed that it's an investor in the property, each countered Belk’s pushback.
Claypoole said his client isn’t looking to push any tenants out. Rather, it's acting as a “responsible property owner” by planning ahead for contingencies to protect its $147 million investment.
He added that it was “sort of striking" for Belk to claim it was surprised to learn about Continental Realty's plan, "which has been working its way" through town channels for several years while generating "plenty of press along the way.”
The Beach Co. CEO John Darby said the shopping center ownership group needs to update its long-term strategy as times change, just as Mount Pleasant's government does.
“Do you want Towne Centre to thrive or do you want to turn your back on it and let it fail?” he asked.
Darby also stressed that his family-owned Charleston-based real estate firm considers the property a legacy investment. The lifelong Mount Pleasant resident added he regularly shops at Belk and was probably wearing a pair of pants he bought from the retailer.
"We welcome (Belk) to continue to do business at Towne Centre as long as they follow their lease,” Darby said. “And we intend to follow the lease as well."
He also addressed speculation that Belk is in financial distress.
"We can't control, shockingly, what goes on social media or even the public's opinion," Darby said.
Next step?
The planning committee did not make any recommendations because there weren't enough voting members present at the meeting.
The town has until December to make a decision, according to planning director Michele Reed. Otherwise, the proposals will need to be refiled, and the process will start over from scratch.
Councilman Howard Chapman said near the end of the meeting that the town "may have erred" previously by not "getting the information from Belk on where they were coming from."
He added the "best thing for all of us" would be for the retailer, the landlord and the town work together.
After the meeting, Continental Realty said in a statement from chief executive officer JM Shapiro that it never intended to single Belk out, and that the property owners "continue to monitor the operating status of each ... tenant,” with an emphasis on the large spaces that can be more challenging to backfill.
“It is in the best interests of ownership, the current tenant mix and the local community for Belk to succeed at the Towne Centre, and we will continue to uphold landlord's obligations under the lease,” Shapiro said. “Our plan is designed to attract more residents, office tenants and visitors to Towne Centre to maintain its position as a thriving and walkable destination.”