Mall tells tenants: everything must go.

• Position: Charlotte

Behind the scenes, a high-stakes game of chicken unfolded for nearly three years. The city of Charlotte calculated that the owners of Eastland Mall (cover story; October 2009) would swerve and take $7.4 million for what was once the state's premier enclosed mall, now less than half full and bereft of its anchors. The owners, on the hook for a $42 million mortgage, bet that harried city politicians were so desperate to pump up the city's sagging east side that they would veer and increase their offering by millions.

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Neither side gave, and in late April, lender-turned-owner LNR Partners Inc. abruptly steered the mall into foreclosure. "Now, we'll just have to let them go bankrupt and see what happens," says Susan Burgess, a City Council member and chairman of its Economic Development Committee. "Obviously, we made them an insulting offer. Nobody bit." A spokeswoman for Miami Beach, Fla.-based LNR declined to comment.

The company notified tenants--about 50, most of them mom-and-pop shops--they have until June 30 to vacate and warned them not to expect another reprieve. Owners had hinted since 2005 that they might close the mall, but many interpreted the threats merely as pressure on the city--with good reason.

Burgess says more was at stake than the fading, 1.1 million-square-foot, 35-year-old mall, once the state's largest...