Columbia developer trying to refinance

December 13, 2008|By Andrea K. Walker and Larry Carson | Andrea K. Walker and Larry Carson,andrea.walker@baltsun.com and larry.carson@baltsun.com

General Growth Properties, the owner of several regional malls and Columbia's master developer, said yesterday it was trying to refinance two loans worth $900 million.

But the Chicago-based company, which is trying to avoid filing for bankruptcy protection, also said yesterday it was able to refinance a separate set of mortgage loans worth $814 million and that it retired a $58 million bond. Most of those loans were due next year.

The loans due last night apply to the Fashion Show and Palazzo malls in Las Vegas. The debt was initially due two weeks ago, but the company secured an extension from creditors.

A company spokesman couldn't be reached for comment yesterday, but General Growth said in a statement: "There can be no assurance that the company can obtain these further extensions."

Should the company be unable to get the extension and default on the loans, it could trigger bankruptcy. General Growth, which has suffered from the credit crunch after assuming billions of dollars in debt during the real estate boom, said in a Securities and Exchange Commission filing last month that it might file for bankruptcy if it can't refinance its loans. It hired law firm Sidley Austin to advise it.

General Growth took on substantial debt when it acquired the Columbia-based Rouse Co. in 2004. It was then that the real estate investment trust became the owner of most of the regional malls in the area and Columbia's master developer.

Properties the company owns regionally include Harborplace, The Mall in Columbia, White Marsh Mall, Owings Mills Mall, Mondawmin Mall, The Galleria, Towson Town Center and The Village of Cross Keys. General Growth put The Village of Cross Keys up for sale this year.

Howard Davidowitz, chairman of Davidowitz & Associates, a national retail and investment banking firm in New York, said he believes General Growth will come to an agreement with the banks and thwart a bankruptcy. The banks wouldn't be paid if General Growth were to go into bankruptcy until a reorganization plan is worked out with a judge, he said.

Shares of General Growth rose 36 cents, or 25 percent, to close at $1.80 yesterday. The stock is down about 95 percent this year.

The company has proposed transforming the planned town's core into a more urban-style downtown. That plan includes adding 5,500 homes and apartments, 5 million-square-feet of new office space, and 1.25 million square feet of retail space plus hotels, cultural buildings and outdoor amenities, including the renovation of Merriweather Post Pavilion.

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