Former J.C. Penney store at Northgate Mall sold as owners envision new uses for space

Staff file photo by Tim Barber/ The former J.C. Penney store at Northgate Mall in Hixson was purchased Thursday by a joint venture created to redevelopment the site.
Staff file photo by Tim Barber/ The former J.C. Penney store at Northgate Mall in Hixson was purchased Thursday by a joint venture created to redevelopment the site.

A development group has bought the long-vacant J.C. Penney store at Northgate Mall with hopes of breathing life into the space by attracting new retail, office or entertainment uses.

"We're working to get the best fit," said Chattanooga developer Bassam Issa, who is partnering in a joint venture with John Woods, the chief executive officer at asset manager Southport Capital in the city, and mall owner CBL Properties.

Woods, who lives in Atlanta but has other real estate holdings in Chattanooga and an ownership stake in the Chattanooga Lookouts, said there are opportunities as malls transition to so-called lifestyle centers.

"As baby boomers get older, they're more into places which have restaurants, health care, fitness," he said. "They don't want to get in their cars and drive."

The 173,000-square-foot J.C. Penney space, which has been vacant since it closed in 2014, has the second-largest footprint at the mall behind Sears, which is also vacant.

The former anchor department store, which operated for more than four decades, was bought from Simon Group. The purchase price wasn't disclosed, but Issa called the project a multimillion-dollar redevelopment.

"We hope to get development that will be helpful to the community and the area and that it would be a profitable venture," he said.

Issa said they want to keep the two-level store and remodel it. But residential space is a potential future use, he said.

"Then we'd more likely tear it down and build," Issa said.

Stacey Keating, a spokeswoman for mall owner CBL Properties, said that attracting new uses to former anchors is a trend at malls.

"It's not just retail uses but incorporating a mix of other uses like entertainment and dining," she said. Even turning former retail space into residential uses makes sense in some markets, Keating said.

At Hamilton Place mall, which is owned by CBL, the shopping center is undergoing its biggest-ever revamp as the former Sears is transformed into new retail, restaurant and office space.

Issa said that at the former J.C. Penney location at Northgate, "everything is on the table."

He said there have been talks with potential future users and the group is looking for others.

"We're still in the early stages," Issa said.

Earlier this year, Issa purchased the former Firestone center on the opposite side of the mall.

He plans to build a new Panera restaurant, relocating the existing eatery that's just off the mall's Hixson Pike entrance. Also, Issa said he's looking at placing two other restaurants at the Firestone site, which he also purchased from Simon Group.

This summer, Woods was involved with Wolford Development in the purchase of two Holcomb Garden Center locations in Hixson and Fort Oglethorpe. New shopping centers are slated to go up on both those sites.

Chattanooga-based CBL is one of the largest owners and developers of malls and shopping centers in the United States, owning or managing 150 properties.

Contact Mike Pare at or 423-757-6318. Follow him on Twitter @MikePareTFP.

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