Columbia Plan In Danger?

General Growth Properties Seeks Bankruptcy Protection

April 17, 2009|By Larry Carson | Larry Carson,

The General Growth Properties plan to remake the heart of Columbia was spared from the company's bankruptcy petition Thursday, but the filing means the long-discussed project will be delayed, experts say.

Any company mired in bankruptcy, they say, will struggle finding money for an ambitious 30-year plan to build millions of square feet in houses, stores and offices in tony Howard County.

A Baltimore-based stock analyst was blunt about the prospects of building getting under way in Columbia any time soon.

"That's a joke, a pipe dream," said David Fick of the investment bank Stifel Nicolaus. "It's simply not going to happen."

Gregory F. Hamm, a GGP vice president and Columbia's general manager, acknowledged that money for new projects is likely to be all but nonexistent, but he sounded a note of optimism.

"Predevelopment activities take as many as two years to complete," he said. "Six months from now, who knows? Good planning will survive this economic cycle."

The company's Columbia project represents the first major redevelopment of the 40-year-old planned community. The firm has proposed building 5,500 residential units, 4.3 million square feet of office space, 1.25 million square feet of retail, as well as hotels, cultural amenities and elaborate public spaces and open space. The vision is to transform the area around Columbia's shopping mall and lakefront into a pedestrian-friendly, densely developed area, using parking garages and multistory buildings where now mostly parking lots prevail.

The popular outdoor concert venue Merriweather Post Pavilion also would get a wholesale makeover.

GGP unveiled the plan a year ago and submitted it to the county to begin the approval process in October. Long before Thursday's bankruptcy filing, many in Howard County wondered whether the company, burdened by debt and facing drops in housing prices and retails sales, could move ahead with its plans amid a recession.

County Executive Ken Ulman said that although he was relieved that GGP's Columbia operation was not included in the filing, county lawyers are studying bankruptcy law to anticipate what might happen next.

"Clearly, this doesn't mean the Town Center won't file in the future," Ulman said.

Larry Coppel, a bankruptcy attorney with Gordon, Feinblatt, Rodman, Hoffberger and Hollander, said that since Columbia was excluded from the filing, legal problems would not prevent the company from moving forward. But he, too, noted the difficulty posed by the lack of capital.

"The fact that General Growth has filed for bankruptcy isn't going to help," Coppel said.

Ulman said that the county wants to move forward with assessing the redevelopment plan but structure it in a way that "protects us from an unforeseen circumstance due to bankruptcy."

General Growth officials said that only three downtown office buildings in the Rouse Co.-developed town are included in the bankruptcy filing, leaving the firm free to continue pursuing approval for their lengthy proposal and for the necessary zoning changes and alterations to the county's General Plan.

"As it relates to the Columbia Master Plan community, there should be no impact," Hamm said, referring to the filing.

The county Planning Board is reviewing the company's proposal now. Its recommendations will go to the County Council, which will make the final decisions.

Ulman said county officials should take advantage of any bankruptcy-induced delays.

"I feel like our job is to put the best plan forward we want for Town Center Columbia in a very deliberate, careful, thoughtful manner," the county executive said. "This also means this is the right time to do the planning. We have a breather. Let's take our time and get the planning right."

The local reaction to Columbia's exclusion from the bankruptcy filing ran from worried to puzzled to encouraged. Some who expressed concern Thursday called for more assurance that residents will get what the giant firm is promising.

Del. Elizabeth Bobo, a former county executive who now represents the Town Center portion of Columbia, has been a skeptic of the GGP plan, welcoming change but seeking more safeguards.

"As the company goes forward, working with the county on plans for amenities, coffeeshops and plazas, we need to make sure they follow through as much as they do on new residential units," the Democrat said.

Other critics of the General Growth plan also urged caution.

"It underlies the importance of not banking on the promises of any one entity," said Alan Klein, a spokesman for a citizens group called the Coalition for Columbia's Downtown.

"We agree [that Howard County] would be better off with a plan, but a plan that is developer-independent," Klein said.

Advocates for General Growth's project said they see the filing as reinforcing the need for a solid rezoning plan.

"It's the best reason to put in place the excellent plan GGP spent hundreds of thousands of dollars to develop," said Emily Lincoln, who heads a group called Bring Back the Vision. "We hope GGP will be the developer. Columbia and Howard County must be protected by adopting a plan any developer would be asked to follow."

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