The sprawling Texas City property once known as Mall of the Mainland is headed for liquidation after a federal judge ordered its bankruptcy case shifted from reorganization to Chapter 7, forcing a court-appointed trustee to sell off its assets. Owner JMK Mall of the Mainland LLC filed for Chapter 11 bankruptcy in May 2026 but could not secure a buyer or refinancing, and creditors say they are owed more than $13 million.
The site's transformation from failing mall to mixed-use complex, and now into bankruptcy court, was detailed in an article by Chron reporter Chris Gray. Developer Jerome Karam, a Galveston County attorney, acquired the property in 2015 and redeveloped it into Mainland City Centre, converting the old Macy's into a World Gym before relocating that gym into the former Sears building in 2021 to create what was billed as the largest World Gym location in North America, according to JMK5 Holdings.
A Half-Century-Old Mall's Long Decline
Mall of the Mainland opened in 1991 at 80 percent capacity, developed jointly by the Edward J. DeBartolo Corp. and the MG Herring Group, with the mall reportedly counted among the DeBartolo family's vast real-estate holdings. According to Alchetron, developers invested $200 per square foot across the mall's 800,000-square-foot footprint. Despite the lavish build-out, the mall had leased only 51% of its 110 interior retail and food court spaces at opening, and initial lender JPMorgan Chase Bank took over the property in 1997 owing more than $61 million, per the Louisiana and Texas Retail Blogspot.
The struggles continued for years. By 2002, the mall sat at 65% occupancy while competing directly along Interstate 45 against Baybrook Mall in Friendswood, which maintained a 96% occupancy rate, according to CultureMap Houston. Hurricane Ike battered the mall in 2008, and the property eventually closed in 2014 after a 2010 Chapter 11 filing by former owner Brentwood Group No. 1 Ltd. led lender Pacific Western Bank to take control and list it for $15.4 million in 2012, a sale that never materialized before Karam's 2015 purchase.
What Fills Mainland City Centre Today
Since its redevelopment, Mainland City Centre has become home to a mix of retail, dining and public-sector tenants far removed from a traditional mall. The property includes a satellite campus of College of the Mainland, a Texas City police substation, the Texas Workforce Commission, and Booker T's Reality of Wrestling school. The Texas Workforce Commission is listed among the property's creditors and is owed around $14,000, while other creditors include Dickinson Independent School District, Galveston County, and Silver City Funding.
Plains State Bank reportedly loaned JMK $8.66 million and, according to the Daily News, filed to foreclose on nearly $9 million in loans. JMK Mall of the Mainland LLC entered Chapter 7 last week, according to the Daily News, after the company could not secure a buyer for or refinancing of its assets. Under federal bankruptcy law, a Chapter 11 case that fails to produce an acceptable reorganization plan or refinancing can be converted to Chapter 7, prompting a court-appointed trustee to liquidate assets, per the U.S. Bankruptcy Code.
Tenants Told They Won't Face Immediate Eviction
The liquidation will include the property's leases, raising questions about how a trustee will manage or dispose of long-term agreements with tenants still operating on-site. Richard L. Fuqua II, the attorney for JMK Mall of the Mainland, said current commercial tenants at Mainland City Centre will not be evicted as a result of the Chapter 7 proceedings.
Karam's Wider Portfolio Under Pressure
The Mainland City Centre case lands amid broader turbulence in Karam's real estate holdings. JMK5 Holdings acquired the Commodore on the Beach hotel in Galveston in 2023, but the firm later surrendered its interest in the historic 92-room hotel, with Good Bull Investments, based in The Woodlands, receiving JMK5's interest in the property. That transaction closed in June 2025, according to a 24-7PressRelease announcement.
Karam's company also sold its interests in the former Gulf Greyhound Park, an 88-acre site in La Marque that Karam had acquired in 2022 with plans for a 12,000-seat concert complex. Karam sold off adjacent sub-parcels in 2022 and 2023 to commercial partners for fast-casual retail and drive-thru restaurant developments, according to JMK5 Holdings. The moves echo Karam's earlier adaptive-reuse work at Galveston's defunct 1895 Falstaff Brewery site, which JMK5 Holdings acquired in 2015 and converted into climate-controlled self-storage, an event venue, and cruise ship passenger parking.
Texas City had backed redevelopment efforts at Mainland City Centre through an economic development agreement between JMK5 entity subsidiaries and the Texas City Economic Development Corporation, providing local performance-based incentives, according to city records. Whether that public investment factors into the Chapter 7 proceedings remains to be seen as the court-appointed trustee moves to sell off the property's remaining assets.
