LYNNWOOD — An owner of Alderwood mall could be heading toward bankruptcy with about $1 billion in debt coming due in about two weeks.
General Growth Properties Inc., the nation’s Âsecond-largest mall owner, is trying to refinance or extend the debt due on Dec. 1. Soft operating revenue and a tight credit market are making it difficult for the Chicago-based company to get financing. An additional $3.07 billion in property and corporate debt is slated to come due next year.
“Given the continued weakness of the retail and credit markets, there can be no assurance that we can obtain such extensions or refinance our existing debt or obtain the additional capital necessary to satisfy our short-term cash needs on satisfactory terms,” the company said in a filing earlier this month with the Securities and Exchange Commission.
The real estate investment trust has seven malls in the state, including Alderwood and Westlake Center in Seattle, according to the company’s Web site.
The company is trying to sell properties and cut costs.
“We announced three properties in Las Vegas are up for sale now,” General Growth spokesman David Keating said Monday.
No other properties are up for sale at this point, Keating said. General Growth owns Alderwood mall with other partners, whom Keating declined to identify.
Alderwood mall officials on Monday referred all questions to General Growth officials.
The biggest shopping mall in Snohomish County continues to do well and shouldn’t have a problem finding a new buyer, said David Kleitsch, economic development director for the city of Lynnwood.
“We do know that the mall will continue to perform above last year,” Kleitsch said Monday.
The 1.3 million-square-foot mall is the biggest tax generator for Lynnwood, and its growing operation is expected to cushion revenue declines among other businesses plagued by the U.S. economic downturn, Kleitsch said. Auto-related businesses and home furnishing stores appear to be taking the hardest hit.
Lynnwood expects to rake in $18.4 million in sales tax this year, according to the city. That’s down from $19.4 million in 2007.
Lynnwood officials keep track of the fortunes of Alderwood mall’s owners, Kleitsch said. They are aware that General Growth could file for bankruptcy.
“That really doesn’t reflect how Alderwood does as a property,” Kleitsch said.
General Growth’s financial woes are well-known in the shopping mall industry, said Linda Johannes, general manager for the Everett Mall.
“We are not facing the kind of issues that General Growth is facing,” Johannes said.
The Everett Mall is owned by Steadfast of Newport Beach, Calif., Johannes said. The developer owns five shopping centers in Washington, Oregon and California. That’s a small operation compared with General Growth, which owns many malls and has borrowed aggressively to expand.
As the holiday season nears, the sluggish economy is taking a toll on many businesses, Johannes said. Several retailers are looking to close or reduce the number of stores owned.
“It’s a challenging economic time no matter what business you are in,” she said.
The Associated Press contributed to this report.
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