Chattanooga's CBL Properties marks four decades

Evolution.

That's what CBL Properties has gone through as the shopping center company has reacted to changes among retailers and consumers in the four decades in the life of the Chattanooga-based business.

"We've had to adjust and adapt our properties to new needs and new demands," said Charles Lebovitz, who formed the business 40 years ago with five others and still serves as the company's chairman. "It has been an ongoing evolution of our properties."

Lebovitz and the company that holds 67 malls nationwide and employs more than 300 people in Chattanooga is marking a couple of milestones. The business not only is 40 years old in 2018, but it's also the 25th year since CBL became a public company.

Lebovitz, 81, said changes taking place in the marketplace spurred by the internet and online shopping are probably the most dramatic he has seen in his long career.

But, he said, they're not the first.

Stephen Lebovitz, CBL's chief executive officer and the chairman's son, said retail through the years has experienced "an ongoing wave of innovation."

Photo contributed by CBL / The New York Stock Exchange recently welcomed CBL in celebration of its 25th anniversary of the company's listing. Stephen Lebovitz, CBL's chief executive officer, is joined by Chris Taylor, vice president of NYSE listings and services, and other CBL officials ringing the exchange's closing bell.

"Online is just the next generation," he said in an interview at the company's headquarters next to Hamilton Place mall. "I'm not downplaying it, but it's just a continuation."

Michael Lebovitz, the company's president and also a son of the founder, said CBL is mixing up the tenant mix to offer more entertainment and restaurants along with offices and others uses.

"That mirrors trends in overall society with people gravitating toward more lifestyle uses," he said.

For example, the company last month unveiled plans to develop a 100,000-square-foot casino and entertainment complex at a Pennsylvania mall. Also, it recently announced plans to redevelop space in another Pennsylvania mall into a ShopRite supermarket.

In Chattanooga, work has started on the addition of a Cheesecake Factory restaurant in the parking lot next to the Hamilton Place Sears in the first step of the redevelopment of that store and its lots. A Dave and Buster's restaurant and entertainment site, medical offices and a hotel are potential additional uses.

Charles Lebovitz said the future opens a door to recreate each of its properties, which represent 70 million square feet of space.

"They're well located, have zoning, access is in place, visibility is there," he said. "Our job is to understand what the customer wants and what retailers want to have as part of these new-look regional malls."

In fact, the company chairman said, a better description of what the malls will evolve into is "suburban town centers."

The reason why Cheesecake Factory is locating at Hamilton Place is because that company picked the most prominent location for it to serve the six-county region, Lebovitz said.

"The properties share the ongoing opportunity," he said.

Michael, Charles and Stephen Lebovitz stand in the corporate lobby of CBL Properties. CBL has been in business for four decades, 25 of those as a publicly traded company.

Challenges ahead

At the same time, the company is facing a variety of challenges. Store bankruptcies, online shopping and other factors have led to a drop in earnings. A second cut in the company's dividend within the past year or so is under consideration, according to officials.

CBL's stock fell to a 9-year low of $3.85 per share in April - down from $49.98 in February 2007 - though it has bounced back somewhat since.

Stephen Lebovitz said CBL has invested in its properties, systems and people. But, he said, the company's product "has had to be transformed to be competitive and stay relevant and successful."

When malls were built, there was a fairly standard pattern of putting in anchor stores and building a ring road with parking lots, Lebovitz said.

"Now, we're blowing that model up," he said. "That doesn't mean there's no room for specialty and department stores but it also includes beverage, entertainment, fitness and things like that."

CBL has its earliest origins out of a company called Independent Enterprises, started in the 1960s by Charles Lebovitz, his father, Moses, and a cousin, Jay Solomon. That company, Charles Lebovitz said, developed shopping centers in small and midsize markets.

About 1970, Independent Enterprises merged with New York-based Arlen Realty and became that company's shopping center division, he said.

In 1978, privately held CBL & Associates was spun out of Arlen by Lebovitz, John Foy, Ben Landress, Bucky Wolford, Jay Wiston and Mark Greenberg. That company had one shopping center open in Texas, another under construction in Dalton, Georgia, and a third on the drawing board in Athens, Georgia, said Lebovitz.

While starting relatively small, it experienced growth to eventually boast 100 centers, including 14 malls, and it had expanded from the Southeast to the Southwest, he said. Hamilton Place mall, Cool Springs Galleria in Nashville and Walnut Square Mall in Dalton, were among those in its portfolio.

"We grew the company in every respect - revenues, employees," Lebovitz said.

Going public

In 1993, the company changed its name to CBL & Associates Properties Inc. as it became publicly traded on the New York Stock Exchange.

Stephen Lebovitz said it was an opportunity to access capital markets and fuel more growth.

"We'd gone through the founder phase," he said. "We were starting to transition into a mature business. As we grew, we knew we would need greater capital."

Charles Lebovitz said that going public was a chance "to bring together financial resources and marry them with the opportunity to continue to grow the business. It has worked very well."

The CBL official said that what has driven him over the years was the impact of the properties and how they affected their respective communities.

"It was both a business and also a means of our contributing to the growth of those communities," he said. "It was really important to me."

Management team

In 1988, both Stephen and Michael joined the business. Another son, Alan, CBL's senior vice president - management, later came on board.

Stephen Lebovitz set up CBL's first regional office in Boston. Just prior to that, he said, he'd been working in several real estate jobs and was looking at opportunities.

"I felt that working with my dad and family was more exciting than for some other companies," the CEO said.

Lebovitz said he previously worked at CBL during his summers before college.

"We grew up a part of it. It was a big part of our lives," he said, recalling his father would take him to swim meets and then they'd check out land opportunities in markets they were in.

Michael Lebovitz said also he had an early interest in the business, later starting in the development area with his initial project being Cool Springs in its early stages.

"I cut my teeth on the development process of working with the city, planning commission, mayor and aldermen on all the approvals to build a big regional mall," he said.

Charles Lebovitz said having his sons involved made the business both fun and interesting.

"It made for a very special experience for family camaraderie," he said.

Michael Lebovitz said his father has excelled over the years of getting people to work together and not against each other.

"That's not just family but all the executives which have been a part of CBL over the years," he said.

Stephen Lebovitz said family members came into the business with focuses which were complementary.

"We each have our own area we're dedicated to and work together," he said.

Katie Reinsmidt, a CBL executive vice president, said she first worked as a financial analyst covering CBL and about 40 other similar companies before joining the business.

"CBL was the only one in which I respected the management team enough to come and work for it," she said. "There is that family aspect whether your last name is Lebovitz or not."

Charles Lebovitz said his father taught him to "surround yourself with the right people, not just people who are trained or educated in a certain area, but the right people - people who are loyal, honest, committed to what the strategy and plan is."

He said he didn't specifically foresee all the growth the company has experienced, but he was "inspired by the opportunity we felt we had."

"We've enjoyed wonderful relationships with so many retailers," Lebovitz said. "Likewise, there have been wonderful relationships with so many financial people. Those two elements combined with a reputable developer, shopping center owner and manager facilitated the growth we've been able to accomplish over the years."

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