Childress Klein says plans for a new regional mall near Mint Hill are still a go, despite the financial troubles of one of its partners.
General Growth Properties Inc., one of the companies involved in building the Bridges at Mint Hill shopping complex, said this week that it may seek bankruptcy protection if plans to refinance $958 million in debt do not succeed. The Chicago-based company is the second-largest U.S. shopping mall owner.
It said in July that it was delaying the project because of a tough economy that has made consumers tighter with their wallets. The mall, expected to draw shoppers from around the region, was envisioned as an upscale, open-air complex featuring a hotel and movie theater. Originally expected to open in 2007, the mall might not open till 2010, General Growth Properties said at the time.
But a spokesman for Childress Klein said work on the shopping complex will restart next year.
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“We are still committed to building the project. We do intend to restart in 2009,” said Chris Thomas, a partner with Childress Klein.
He did not comment on General Growth Properties, and phone calls to that company went unanswered Wednesday.
On Tuesday, General Growth shares fell 88 cents, or 64 percent, to 49 cents. That decline was the biggest for the company since its April 1993 initial public offering of shares and cost the company its place in the Standard & Poor's 500 stock index. The stock fell another 14 cents Wednesday, closing at 35 cents.
Investors have been dumping General Growth shares on concern the company won't be able to refinance its debt. It has lost more than 98 percent of its market value this year. The company's problems stem from its $11.3 billion purchase of Rouse Co. in 2004. Financed almost completely with debt, it left the company highly leveraged, said Rich Moore, managing director at RBC Capital Markets in Cleveland.
“They took a big, big gamble, and it did not pay off,” Moore said in an interview.
General Growth may not be able to refinance or reschedule the loans, due Dec. 1, because of the crisis in the credit markets, according to a filing the company made after the close of regular trading Monday. It also may fail to rearrange $3.07 billion in debt maturing next year, General Growth said in the Securities and Exchange Commission filing.
Standard & Poor's said it would remove General Growth from the S&P 500, saying the mall owner's stock-market value of about $128 million ranks it last in the index. General Growth will be replaced by drug developer Cephalon Inc., New York-based S&P said.
“Our potential inability to address our 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to our ability to continue as a going concern,” General Growth said in its filing.
The steps it may take include “seeking legal protection from our creditors,” the company said.
General Growth is the largest U.S. shopping-mall owner after Indianapolis-based Simon Property Group Inc. It's holdings include Chicago's Water Tower Place and Fashion Show in Las Vegas.
Work at Bridges at Mint Hill stopped earlier this year. Land has been cleared for the planned open-air shopping complex at the Mecklenburg County border near Lawyers Road and Interstate 485. The complex covers 215 acres and would be 1.3 million square feet. Bloomberg News, the Associated Press and staff writer Cliff Harrington contributed to this article.