The property includes a Kohl's, Old Navy and Kmart. Malan has recently reached an agreement modifying terms of sale for Kmart-anchored shopping centers.

Malan is working with Hutensky Capital Partners of Hartford, CT on a purchase agreement. The number of properties has been reduced to four from 11, and the purchase price has been adjusted to $14.8 million from $42 million.

Together, Sherwood Plaza in Springfield, IL, Kmart Plaza in Salina, KS, South City Center in Wichita, KS and Kmart Plaza in Jefferson City, MO consist of 467,685 sf of gross leasable area.

Malan plans on closing the deal on Aug. 5.

Malan officials say Hutensky had environmental questions about the other seven properties, mostly regarding underground storage tanks and cleaning solvents. Malan officials say the company is in the process of assessing the extent of contamination, the potential costs of any required remediation and the viability of indemnification from third parties.

"These properties remain attractive acquisition options, with most of them located in the Chicago and Milwaukee areas," said Jeffrey Lewis, Malan's president and chief executive officer. "Once we address and resolve the impact of any environmental issues, we expect to find interest from a number of parties as we re-market these properties."

In March 2002, as a result of several factors including Kmart's bankruptcy filing, the company's board recommended a plan of liquidation to its shareholders. The proposed plan contemplates the sale of all of the company's properties and other assets and is subject to shareholder approval at the annual meeting to be held later this summer as well as to agreements with some of the company's lenders.