Gallup mall’s ownership fights for life

Copyright © 2008
Gallup Independent
By Gaye Brown de Alvarez
Staff writer

GALLUP — Are the “going to the mall” days over in the U.S.?

General Growth Properties, owner of Rio West Mall in Gallup and the Animas Valley Mall in Farmington, warned that it faces solvency trouble and might be forced to file for bankruptcy if it is unable to refinance or extend nearly $1 billion in debt due next month.

General Growth is based in Chicago and is the nation’s second-largest mall owner. It also disclosed that it might default on certain debt obligations. Its most prominent holdings include Water Tower Place in Chicago and the Fashion Show mall in Las Vegas.

But in Gallup, with Wal-Mart, Home Depot and other strip mall stores next door to the mall, the large space that Kmart once occupied years ago, has not been filled.

Lloyd “Skip” Sandgren, general manager of the Rio West Mall was quick to say, in a telephone interview, that the Gallup mall “was not closing.”

“Our holiday plans are in place and this weekend we are having a ‘giving spree’ for Habitat for Humanity. The day after Thanksgiving there is an event where we plan to give away a big screen TV.” Santa will come to Rio West Mall on the Friday after Thanksgiving and the annual Balloon Glow will be Dec. 6, weather permitting.

Sandgren said anything involving stocks, financing, lawsuits, solvency or bankruptcy is handled by the main corporate office in Chicago.

Kmart, which filed for bankruptcy and emptied their space in the mall has not been refilled since 2003. Sandgren said there have been several lease negotiations to fill the Kmart space and added that the space may have to be split into two spaces.

“I think retailers are hunkering down and being cautious,” he said.

General Growth Properties stock has fallen from $53.00 a share to $.44 in 2008 and three-class action lawsuits were filed against General Growth Properties, claiming the company made false and misleading statements about their access to financing. The company said they had the ability to refinance billions in debt that was coming due in the fall 2008 and spring 2009 when in fact, they did not have that financing.

According to news reports, with GGP’s price so low, the Chicago-based mall developer is now quickly gaining attention as a possible takeover target.

The Wall Street Journal reports that possible suitors to take over GGP include “the world's largest mall owners, Simon Property Group Inc. and Australia’s Westfield Group.”