Maryland's loss

August 22, 2004

IN A LENGTHY conference call at which General Growth Properties, of Chicago, first discussed the details of its acquisition of the Rouse Co. with stock analysts Friday, Baltimore was mentioned only once and in passing.

Nor was there a nod to now-deceased James W. Rouse and his firm's historic role in the physical and social development of central Maryland from opening Mondawmin Mall, one of the nation's first shopping centers, in the 1950s to audaciously forging the dream of a new kind of surburban city with the groundbreaking of Columbia in the 1960s to the much copied renewal of Baltimore's waterfront with the transformation of the Inner Harbor in 1980.

Marylanders immediately professed degrees of shock that a 65-year-old company that has been such a force in Maryland for so long will now be subsumed by GGP, the nation's second-largest owner of regional shopping malls. There was no firm word Friday from Chicago about the future of Rouse's Columbia headquarters or its hundreds of employees, but there was a lot of general talk that casts clouds over their future - of synergies to be realized, costs to be cut, assets to be sold to pay off the cost of buying Rouse.

Plain and simple, this is a seemingly good deal for Rouse stockholders, who'll receive a big premium over the recent price of their stock. In that sense, it's not much different from the deals that have led to a parade of outside acquisitions of local corporations - among them, USF&G Corp., Maryland National Bank, and Alex. Brown & Sons. Rouse's purchase and likely departure is just further evidence that Baltimore suffers from claiming fewer and fewer corporate headquarters.

But Rouse does not merely own malls. It also holds land on which it is developing communities - three big projects in Nevada and Texas and three smaller ones in Maryland, plus the remainder of Columbia, this state's second-biggest population center. That carries with it special responsibilities that go beyond the bottom line - like paying heed to community desires that the final build-out of Columbia's Town Center make it more vibrant and pedestrian-oriented.

In recent years, Rouse certainly met some local criticism, in part because Marylanders came to hold high expectations of it. GGP paid a healthy premium to buy Rouse for much the same reason: The company set high benchmarks. As GGP takes over Rouse, we hope that does not change.

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