Utah mall owner General Growth restructures $9.7 billion in debt

NEW YORK — General Growth Properties Inc. said Wednesday lenders have agreed to restructure about $9.7 billion in debt under a plan that will allow 92 of its properties to emerge from bankruptcy protection by the end of the year.

The nation's second-largest mall operator will pay off loans that cover regional shopping centers, offices, community centers and related subsidiaries. The plan will allow the real estate investment trust to retain ownership of the properties, including the Ala Moana Center in Honolulu and the Harborplace & The Gallery in Baltimore.

The Chicago-based company expanded aggressively during the real estate boom, amassing $27 billion in debt. As the real estate market imploded and financing dried up, General Growth was unable to refinance its short-term loans and in April became the largest U.S. real estate company to file for bankruptcy.

In Utah, General Growth Properties owns the Cache Valley Mall in Logan, Newgate Mall in Ogden, Cottonwood Mall in Holladay, Fashion Place in Murray, the Provo Towne Centre and the Red Cliffs Mall in St. George.

"The Provo Towne Center was not a property that was part of our original bankruptcy filing," General Growth spokesman Jim Graham said in an e-mail to the Deseret News. "It remains out of bankruptcy."

The Newgate Mall and Red Cliffs Mall are among the 92 properties expected to emerge from bankruptcy by the end of the year.

But Graham issued a caveat: "Under certain circumstances, some of the properties listed today may not get the approval of all the necessary creditors or the court. Obviously, we are optimistic that most will emerge from bankruptcy before year's end."

Cottonwood Mall, Fashion Place and Cache Valley Mall remain in bankruptcy, which means General Growth is still trying to negotiate their debts.

Perhaps General Growth's most controversial property is the former Cottonwood Mall. The mall — all of it except for Macy's — was demolished last year. A European-style village with office, retail and housing was supposed to emerge in its place, but there has been no activity on the property since last year.

Greg Cross, an attorney representing the largest block of secured General Growth creditors, said lenders extended the length of their loans in exchange for full repayment, plus interest and bankruptcy costs. The lenders also will get increased oversight of the loans and General Growth's financial reserves.

The plan will go before the Bankruptcy Court of the Southern District of New York on Dec. 15.