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Apr
16
Not like no one besides me wondered why Beachwood Mall was expanding three years ago in the first place – Legacy Village had just been completed, LaPlace had stores and restaurants coming and going, the new Cedar Center sprawl was completed – and we have a shrinking demographic.
So here’s the fairly predictable news, from the Plain Dealer blog:
General Growth Properties Inc., the major mall company that owns Beachwood Place, filed for bankruptcy protection early Thursday after it failed to reach agreements with its lenders to refinance more than $27 billion in debt.
The company’s Chapter 11 filing, in the U.S. Bankruptcy Court in New York, had been a topic of speculation for months. It marks the collapse of a real estate titan and is a major indicator of the industry’s struggles to manage debt and find cash during a credit crisis. General Growth, based in Chicago, owns and manages more than 200 shopping centers, including the Beachwood Place mall in Beachwood.
General Growth listed $29.5 billion in assets and roughly $27.3 billion in debts in its filing. A large part of that debt relates to the company’s acquisition of developer Rouse Co. in 2004. Rouse and other company units and properties are included in the bankruptcy filing; however, General Growth’s decision to file for bankruptcy protection does not necessarily mean there will be changes at Beachwood Place and the company’s other malls.
Who is General Growth Properties? You can check for names you recognize here. I can tell you a few things: it took several clicks just to find those names and when I finished reading the fairly short list, I’d just finished saying, “Man.Man.Man.Man.Man.Man.”
Even though who is it again who makes more than half of all spending decisions, of nearly all kinds?
Yeah.
Here’s the bankruptcy corporate restructuring notice. Love how the credit markets are being blamed for everything. No way, no how seven to eight months since the first bailouts in late Sept. that that’s the case with these malls – nuh-uh.
Does anyone know – do the NEO leaders who embrace regionalism figure this kind of crap into their analysis? Because if these mall makers had ever heard of the word “regionalism,” wouldn’t you have thought that have stopped building stores that can’t be supported by our economy?
No – and the reason is because they sell, sell, sell that they’re providing jobs – and that no one else will do anything else for the area. And other so-called leaders buy this line – over and over and over.
Okay – I’m getting to cynical. That third grader eating my lunch this afternoon on the field trip I chaperoned really got to me – that and my completely missing voice and wildly sore throat.
Feh.
Hattip NEO Biz Blog.
Update: WCPN’s coverage:
…The company has been wrestling with a massive amount of debt that it has been unable to refinance or find investors for because of the credit crunch. In Ohio, General Growth Properties owns Beachwood Place, Toledo’s The Shops at Fallen Timbers, Zanesville’s Colony Squares Mall and Cincinnati’s Kenwood Towne Center. However Kenwood Town Center mall is the only Ohio property that did not file for Chapt.11 individually. A company spokeswoman says that’s because Kenwood is jointly owned with another firm. Beachwood Place’s management office says the mall’s stores are open for business as usual. In February, General Growth Properties reported over $5 billion in debt that creditors could call due.
By Jill Miller Zimon at 2:05 pm April 16th, 2009 in Business, Cleveland+, Economy, Gender, Ohio, employment, leadership
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9 Responses to “Beachwood Mall (Ohio) declares bankruptcy”
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I have worked on GGP projects for one of my client architectural firms.
Wow. I have to admit I haven’t set foot in Beachwood Place in years and I used to love to shop, going there probably once a week. Of course, it’s no surprise that retail is struggling, because in the last decade, this area has been building new retail in massive doses claiming it creates jobs. But retail jobs aren’t created by square footage, they are created by expanding the amount of dollars available to be spent. And that has not grown in Northeast Ohio. In fact, I recall seeing a chart, I think at Policy Matters Ohio, that showed that, despite all of the new retail development here in the last 7 or 8 years, that the number of retail JOBS had declined in the same amount of time.
Thanx, Jill.
Hattip
So you think the Credit Crunch is over because the bailout started in September and the expansion of Beachwood Mall brought this firm down?
Uh huh…
Brian – how do you figure that I “think the credit crunch is over because the bailout started in September and the expansion of the Beachwood Mall brought this firm down”?
My experiences indicate that the crunch is far from over. I just don’t happen to think that they had a ton to do with the bad decision-making that led to expanding the mall. Compound it, sure. Catalyst for it – nope. Not even close.
You sound rather defensive.
The real cause of GGP’s fall is expansion–not physical expansion of any one mall–but a buyout of a competitor in 2004. Their fatal flaw was financing that buyout exclusively through debt.
Due to the credit freeze, they were unable to refinance that debt.
Now, you claim, “No way, no how seven to eight months since the first bailouts in late Sept. that that’s the case with these malls – nuh-uh.”
Yes way. GGP had $27.3 billion in debt that came due. The timing of the bailouts months ago had nothing to do with it. Bank lenders are still very wary of lending to any corporation with large debt to equity ratios (92% in this case), even a huge REIT player like GGP that has billions in tangible real estate assets.
The credit markets had everything to do with this. It has nothing to do with Beachwood Mall or no women officers (not necessarily no female members of the board or in upper management). How silly.
Brian – you contradict yourself, not sure why. The expansion weakened their position to begin with – it’s foolhardy, then or now, to think that such expansion in a completely flat or economically unstable community like NEO would be a place to expand. I said the credit situation didn’t help but as for risk assessment before they decided to expand, they did a lousy job. I stand by what I’ve written.
And again, if you want to comment here, great, but you need to stop taking things out of context and putting words and thoughts into this post and what you think I’ve written ie:
“It has nothing to do with Beachwood Mall or no women officers (not necessarily no female members of the board or in upper management). How silly.”
Again, by writing that, you completely undermine giving people the idea that you can make a logical argument.
I used to love the Beachwood Mall. Around 5 years ago, something changed — they moved the food court upstairs for some reason, and the whole clientele changed to really scary gangter-looking people. I stopped going, so did a lot of people who were scared by the new crowd shopping there. That’s probably part of the reasons it went under.
Anon in #8, you wrote:
“…and the whole clientele changed to really scary gangter-looking people. I stopped going, so did a lot of people who were scared by the new crowd shopping there. That’s probably part of the reasons it went under.”
Having been on the receiving end of some very serious anti-Semitism in my neighborhood just last week, with absolutely no rationale to even try to mitigate why anyone would feel the way the individual did, I’m going to be blunt:
Either describe what scary is to you and what you’ve experienced at the Beachwood Mall that would cause people to be scared, or don’t leave comments in thin racist code.
I’ve been there plenty before and after your five year mark, and I haven’t seen anything I’d call “really scary gangster-looking people” nor have I been “scared by the new crowd shopping there.”
Who is the “new crowd?” If they’re shopping there, then why would they be a reason for the mall to go under – the mall went under because people are NOT shopping there.
I’m happy to get contributions and if you’ve got stats or anecdotes that demonstrate an increase in crime of any type, then let it rip.
But do not use this post as a racist launching pad.
The Jewish gangsters in Vegas were scary – you’ve been seeing them in the Beachwood Mall? Some sub-prime mortgage brokers are crazy scary to me – are you talking about them?
Don’t do it. Just do not do it. Start your own blog if you want to spread prejudice-based fears.