Carolina Place owner files for bankruptcy: Move could further delay Mint Hill mall, but town says project will still happen

Apr 16, 2009 (The Charlotte Observer - McClatchy-Tribune Information Services via COMTEX) -- GGP | Quote | Chart | News | PowerRating -- The company that owns Carolina Place Mall in Pineville and Valley Hills Mall in Hickory has filed the biggest real estate bankruptcy in U.S. history.

General Growth Properties Inc., which also previously announced plans to build a large mall in Mint Hill, has filed for Chapter 11 protection in U.S. Bankruptcy Court in New York, listing $27 billion of debts.

"While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11," General Growth CEO Adam Metz said in a statement this morning.

The mall owner said it will continue operating the local malls and its more than 200 other properties, including such prominent centers as South Street Seaport in Manhattan and Faneuil Hall in Boston.

It is less clear what impact the filing will have on the company's future development, such as the Bridges at Mint Hill, the 1.3-million-square-foot open-air mall it planned to build on Lawyers Road near Interstate 485.

Originally slated to open in spring 2007, the project has been delayed by environmental and economic concerns, among them a steep drop in consumer spending that has retailers and developers reining in expansion. Work at the site halted last summer and has not resumed since, and no opening date has been set, Mint Hill town manager Brian Welch said.

However, Welch said that Childress Klein Properties, General Growth's local partner on the Bridges project, told him this morning that the mall is still a go and that they want to see it through to completion.

"They've maintained to me that they're fully committed to this project, and I don't have any indication they're not being 100 percent truthful when they say that," Welch said. "It's my understanding that they hope to get started again in the spring of next year."

Tenants that previously committed to come to the mall remain on board, Welch said, and the mall is expected to take about two years to build once construction resumes. Childress Klein could not be immediately reached for comment.

General Growth, the nation's second-largest shopping mall owner, has been hit hard by the credit crunch and faltering economy, as it piled up a staggering debt load during the real estate market's boom years. New managers were installed in October, but analysts said late in 2008 that there were unsure if the change would help keep the company afloat.

General Growth lost 81 percent of its market value in the last six months, after saying repeatedly it might have to file for bankruptcy. General Growth closed at $1.05 in New York Stock Exchange composite trading Wednesday, valuing the company at $329 million. Shares traded for as much as $67 in March 2007.

"It was a disaster waiting to happen," said Patrick Sumner, head of real estate securities at Henderson Global Investors in London. "They didn't realize the market was going to get like this and that they were going to be in the front line when the guns went off."

General Growth's history stretches back to 1954, when brothers Matthew and Martin Bucksbaum expanded the family's grocery business by building the Town and Country Center in Cedar Rapids, Iowa. It was among the Midwest's first regional shopping malls. General Growth became the No. 2 mall owner in 1989, when it bought the assets of Center Cos., and in 1993 raised about $300 million in an initial public offering.

In October, for the first time in its history, General Growth was turned over to someone outside the family, replacing CEO John Bucksbaum, Matthew's son, with 47-year-old Metz. John Bucksbaum, 52, replaced his father as chairman last year and remains in that position. Martin Bucksbaum died in 1995. STAFF WRITER STEVE LYTTLE AND BLOOMBERG NEWS CONTRIBUTED.

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