Owner’s woes won’t affect mall

  • Associated Press and Herald Staff
  • Thursday, April 16, 2009 6:50pm
  • Business

It’s business as usual for the Alderwood mall in Lynnwood, despite the announcment Thursday that one of its owners filed for bankruptcy protection.

In its drive to become the second-largest owner of shopping malls in the nation, General Growth Properties Inc. racked up $27 billion in debt. At around 2 a.m. in Chicago on Thursday morning, the retail giant buckled under the weight.

After months of tense negotiations with tightfisted lenders, General Growth filed for Chapter 11 bankruptcy in a bid to protect its 200-plus shopping malls including Lynnwood’s Alderwood shopping center, Seattle’s Westlake Center and Bellingham’s Bellis Fair. General Growth has said it owns Alderwood with other parties, but declines to name them.

But Alderwood assured customers that shopping continues in a statement from General Growth on the mall’s Web site.

“Our properties will continue to operate, our employees will continue to come to work and get paid, and shoppers will continue to shop,” the statement said.

The Chicago-based General Growth is paying the price for its aggressive expansion during the real estate boom, when cheap lending proved an irresistible option for bankrolling prime acquisitions, such as its 2004 purchase of the Rouse Co.

The deal gave General Growth retail gems such as Faneuil Hall in Boston, the Providence Place mall in Rhode Island and the Harborplace waterfront marketplace in Baltimore, but at a hefty price: $7.2 billion plus $5.4 billion in assumed debt.

Rolling over financing for commercial properties is common in the industry, but when lenders all but stopped making loans last fall, it left General Growth without recourse to make its debt payments.

“While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11,” Chief Executive Adam Metz said in a statement.

By placing its fate in the hands of a bankruptcy judge, General Growth hopes to cast off its debt and emerge with its portfolio of landmark retail centers intact, although there are no guarantees the company will be able to do so.

“We will not have to sell substantial amounts of our iconic assets,” Tom Nolan, president and chief operating officer, said during a conference call with reporters. “We believe we can maintain those.”

Nolan acknowledged that the company took on significant amounts of debt to finance its expansion efforts, but stressed that the company didn’t run into trouble trying to refinance until last fall.

“It wasn’t so much the Rouse acquisition as it was the credit markets simply shut to really any refinancing and the company found itself, unfortunately, in the position of having a significant amount of debt come due since last October,” Nolan said.

Chapter 11 protection typically allows a company to hold off creditors and operate as normal while it develops a financial reorganization plan.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Lily Lamoureux stacks Weebly Funko toys in preparation for Funko Friday at Funko Field in Everett on July 12, 2019.  Kevin Clark / The Herald)
Everett-based Funko ousts its CEO after 14 months

The company, known for its toy figures based on pop culture, named Michael Lunsford as its interim CEO.

The livery on a Boeing plane. (Christopher Pike / Bloomberg)
Former Lockheed Martin CFO joins Boeing as top financial officer

Boeing’s Chief Financial Officer is being replaced by a former CFO at… Continue reading

Izaac Escalante-Alvarez unpacks a new milling machine at the new Boeing machinists union’s apprentice training center on Friday, June 6, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Boeing Machinists union training center opens in Everett

The new center aims to give workers an inside track at Boeing jobs.

Some SnoCo stores see shortages after cyberattack on grocery supplier

Some stores, such as Whole Foods and US Foods CHEF’STORE, informed customers that some items may be temporarily unavailable.

People take photos and videos as the first Frontier Arlines flight arrives at Paine Field Airport under a water cannon salute on Monday, June 2, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Water cannons salute Frontier on its first day at Paine Field

Frontier Airlines joins Alaska Airlines in offering service Snohomish County passengers.

Amit B. Singh, president of Edmonds Community College. 201008
Edmonds College and schools continue diversity programs

Educational diversity programs are alive and well in Snohomish County.

A standard jet fuel, left, burns with extensive smoke output while a 50 percent SAF drop-in jet fuel, right, puts off less smoke during a demonstration of the difference in fuel emissions on Tuesday, March 28, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
Sustainable aviation fuel center gets funding boost

A planned research and development center focused on sustainable aviation… Continue reading

Helion's 6th fusion prototype, Trenta, on display on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Helion celebrates smoother path to fusion energy site approval

Helion CEO applauds legislation signed by Gov. Bob Ferguson expected to streamline site selection process.

Britney Barber, owner of Everett Improv. Barber performs a shows based on cuttings from The Everett Herald. Photographed in Everett, Washington on May 16, 2022. (Kevin Clark / The Herald)
August 9 will be the last comedy show at Everett Improv

Everett improv club closing after six years in business.

Pharmacist John Sontra and other employees work on calling customers to get their prescriptions transferred to other stores from the Bartell Drugs Pharmacy on Hoyt Avenue on Wednesday, July 2, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Bartell Drugs location shutters doors in Everett

John Sontra, a pharmacist at the Hoyt Avenue address for 46 years, said Monday’s closure was emotional.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.