Industry news, views and occasional strange stuff.
Circuit City will unveil a new prototype store in June. It isn’t releasing too many details yet on what the new concept will be like.
Perhaps Circuit City is looking to emulate Best Buy, which has operated several test stores selling merchandise geared towards more select audiences.
The Miami Herald earlier this week had an interesting profile of Chaim Katzman and his ongoing quest to turn around Mills Corp.
The opportunity Katzman has his sights set on now: the struggling Mills Corp. Gazit-Globe owns 9 percent of Mills and has offered $25.50 per share for a recapitalization plan worth about $1.2 billion. It’s a move that started confrontationally with litigation but has since cooled off with Katzman signing a confidentiality agreement and agreeing not to trade any of his shares until the end of March.
The Mills situation has thrust Katzman onto the public stage he normally avoids. If successful, the move would vault him from being one of the largest owners of strip shopping centers in the Southeast into the elite circle of major national mall developers. Mills owns a combination of 39 mega-outlet malls, entertainment centers and traditional malls across the nation, including Sawgrass Mills, The Falls, Westland Mall and Broward Mall.
”There is a lot of upside in this portfolio,” said Katzman, who believes the Mills’ properties should be improved rather than the pieces of the company sold off. “I don’t claim we’re the only one who can do it, but I’m not too shy to say we can’t. We feel we can compete.”
RioCan Real Estate Investment Trust and Ramco-Gershenson Properties Trust have called off their planned $1.5 billion joint venture to co-own and develop shopping centers in the U.S.
Ramco instead has formed a $450 million joint venture with one of its previous partners, Heitman.
According to the Associated Press:
The Mills Corp. warned Tuesday that a heavy debt load could force the mall developer into bankruptcy if it is unable to follow through with its plans to sell all or part of the company.
The warning came in a Securities and Exchange Commission filing that also detailed the results of an internal audit showing accounting errors and possible executive misconduct.
Mills’ shares plunged more than 16 percent on the news.
Chevy Chase-based Mills said it may not have enough cash to continue operating beyond March 31 and that it would be forced to sell all or part of the company to pay off a $1 billion loan that is due on that date. It could be forced into bankruptcy, which would cause shareholders to “lose their entire investment,” the company wrote in the federal filing.
It’s a race to the finish line in the holiday shopping season. There’s lots of reports of stores and malls operating on extended hours–some are opting to stay open 24 hours a day during the home stretch. It will be interesting to see how it all plays out as we begin to sift through the data next week.
In the mean time, here’s a few of the big headlines from around the industry for the past couple of days.
Houston Strategies, the blog of Social Systems Architect, Tory Gattis, has some interesting observations on the viability of lifestyle centers as transit-oriented development projects.
I’m not saying these developments are bad. Far from it. They’re actually kind of cool. But people need to be careful not to confuse lifestyle-center malls that happen to be near a transit stop with the real viability (or possible lack thereof) of true transit-oriented mixed use development with everyday street retail in suburban-model cities like Houston.
Canada’s largest REIT RioCan REIT is expanding to the U.S. in a $1.5 billion joint venture with Ramco-Gershenson Properties Trust.
Here’s a problem you don’t run into every day.
It seems that shifting soil is causing problem’s at Westcor’s FlatIron Crossing property in Boulder, Colo.
Floor-heaving of up to 6 inches, expensive repairs and difficulty with mall management about how to address the problems persuaded Italian restaurant Il Fornaio to close in October, said Jesse Witt, a lawyer who represented the restaurant in negotiations with the mall. Witt said the Corte Madera, Calif.-based chain wanted to remain in the location, but the ‘’soils problem” was the reason it closed.
It’s a similar case for Denver-based burrito chain Chipotle, which shutdown in August. Chipotle spokesman Chris Arnold said the restaurant left because the mall opted not to repair the building.
According to the Castle Coalition (a group that has been advocating for limiting eminent domain), the Senate failed to vote on Private Property Rights Protection Act, which would prohibit states from using eminent domain for the purposes of economic development. The House passed a similar bill last November.
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Sheldon Silver Could Say No
by David Bodamer December 18th, 2006
Forest City Ratner has been in an ongoing battle to get its proposed Atlantic Yards project approved. Opposition groups like Develop Don’t Destroy and No Land Grab continue to oppose the project, even as it inches closer to reality having gained many of the key approvals it needs.
But the New York Times today raises an interesting twist to the story, which is that the fate of the project could end up in hands of Sheldon Silver, the state Assembly speaker.
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