Elk Grove Promenade In Deep Trouble
General Growth Properties, the owner of the much delayed Elk Grove Promenade, has warned investors it will default on $1 billion in debt due within three weeks without refinancing. From the Wall Street Journal (via Calculated Risk):
Ailing mall owner General Growth Properties Inc. warned Monday in a government filing that its failure to refinance or extend $1 billion in debt due this month could trigger default on billions of dollars in debt and its ability to continue operations would be in "substantial doubt."I'll go out on a limb and say this mall won't be completed until 2011 at the earliest.
One of the nation's largest shopping mall owners, General Growth made the warning in a quarterly filing with the U.S. Securities and Exchange Commission. The company, based in Chicago, faces an additional $3.07 billion in debt coming due next year.
If General Growth cannot raise additional capital to pay off that debt or extend its payment deadlines, it would need to take additional steps to acquire needed funds, "including seeking legal protection from our creditors," according to the SEC filing.
General Growth has struggled for the past year to refinance and pay down a $27 billion debt load, amassed in acquisition sprees in recent years. The company owns more than 200 U.S. malls, including flagships such as Honolulu's Ala Moana Center and Las Vegas's Fashion Show mall.
14 comments :
That can't be 1 billion debt just for that one mall, can it?
Nah, only $500 million. :)
Well good. Elk Grove needed one more problem. A major unfinished project like this, mixed with a dash of hard-hat unsightliness should do the trick nicely.
Paintball 2013 World Finals location.
From the link from Max"
It means that Elk Grove isn’t country any more. And the sales tax-rich city of 100,000 souls, with an average annual household income exceeding $70,000, is going to become even more urbane – and richer – with the new super mall.
*snicker*
It is a huge deal to have uncompleted space of this nature. After a few years, trying to pick up where you left off, it may be easier to start from scratch.
"with an average annual household income exceeding $70,000"
Was that before or after the place turned into a major section 8 rental location?
Hey, when life hands you lemons...
...make Promenade.
So dj, you back in town?
Paintball 2013 World Finals location.
There was a mall like that in San Diego. 75% of it was closed down, and a Halloween store was using some of the old anchor space.
Perfect for paintball. Or a zombie movie.
Max,
That would yes.
And what happened while I was gone? I see for sale signs everywhere but they aren't on the MLS. Is there no longer any attempt to hide the shadow inventory?
Max, DJ, lenders aren't releasing REOs to the agents. REO inventory way down. See Lasner/OCR for similar story.
So ... forget what I said about Paulson's leadership and decisiveness really helping. The public "wonder what we should do" was his resignation.... accept/demand it.
The market and consumer confidence are moving in unison to the leadership void.... retreat.
The only upside occurred on November 1 when filling my SUV (you would've guessed that, huh, DJ) and the meter stopped well short of $75 and I said "Damm, they lowered my limit again" then noticed my tank was full!
I'll jump on the Obama bandwagon now (sorry Mom) and say that leadership is more important than policy, and I fully expect he will be able to lead.
Transition now.
Sippn
So ... forget what I said about Paulson's leadership and decisiveness really helping. The public "wonder what we should do" was his resignation.... accept/demand it.
All major business decisions are now taking place with the bailout as the engine, and the fate of companies will not be decided by the market, but by political connections and public relations. The legacy of this bailout will be a lost year or two of economic stagnation.
Honesty and clarity must be Obama's theme. Politically, he has a blank check. He must begin by lowering peoples expectations of what the government is capable of, and stop trying to prevent the inevitable market consequences from taking place. Ending the TARP is step one. Ending the AIG farce is step two. Undoing the illegal IRS code change for merging bank loss write-offs is step three. Guaranteeing chap. 11 reorg loans for GM is step four. Then we can begin prosecuting those responsible. I nominate Eliot Spitzer for AG.
Bingo Max- well put.
Sippin, I always figured you for a M class BMW like the broker that did the hit and run earlier this year up in whatsit (blahh EDH,Folsom, granite bay, rocklin, roseville- it's all one big ugly suburban blur).
I drive a small SUV myself though I'm lucky if I put 100 miles on it a month.
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