THE PROMENADE SHOULD BE RENAMED “THE GHOSTWALK”
Dale Kasler did a follow up in the Sacramento Bee about General Growth Properties, Inc. it’s Reorganization Plan, and the prospects for the Promenade in the near future. Elk Grove’s unfinished megamall will likely remain stalled even though its developer has taken a major step toward exiting bankruptcy protection. General Growth Properties Inc. said it has reached agreement with lenders to restructure billions of dollars in debt, as part of a reorganization plan that would leave the Chicago mall developer largely intact. The plan needs the approval of creditors.
But unfinished projects, including the Elk Grove Promenade, aren’t part of the reorganization plan. General Growth is still negotiating with lenders on those projects, company spokesman Jim Graham said Wednesday.
The Promenade’s future “remains to be seen,” Graham said. Construction on the on the 1.1 million-square-foot mall ground to a halt in October 2008, and lawsuits from contractors seeking payment began piling up. Last February the project, surrounded by chain-link fence and sprouting weeds, was officially put on hold indefinitely. Two months later, buried under billions of dollars in debt, General Growthfiled for Chapter 11 bankruptcy protection. The site is now a steel ghost town, an e1ery site that looks like the survivor of a nuclear winter or an outtake from the Omega Man.
The company tried to sell the mall earlier this year but pulled it off the market several months ago. Graham said the Promenade’s fate is “subject to market conditions that are unrelated to the bankruptcy.” Analysts agree, saying the Promenade190 is a troubled project regardless of what happens to General Growth.
Another point of view might be that the market conditions that caused the bankruptcy was the failure of the developer and planners to adequately prepare feasbility studies and understand demographic trends. Ambition and greed may have factored into a ill fated decision to go ahead and build before the time was ripe. That’s of course the dual problem of being a developer, being a visionary and being accurately able to predict future growth patterns.
The Sacramento research director at commercial real estate broker Colliers International, Garrick Brown, said the Promenade won’t open “for three years at best, more likely four years.” Brown said the retail market is starting to improve, but the Promenade was built too far out in front of Elk Grove’s housing development. The mall is about two miles from the nearest housing. “Nobody wants to touch it until there are homes there,” he said. The mall, first proposed in 1997, has been a symbol of Elk Grove’s ambitions and frustrations. It spurred Elk Grove’s push for cityhood in 2000. Macy’s and Barnes & Noble were among the earliest anchor tenants committing to the project.
With unemployment officially at 10.2% nationwide, the State in Deep Financial crisis, Bankrupticies at all an all time high, and Chairman of the Fed Ben Bernanke saying Monday that the employment picture isn’t going to get dramaticallly better in the near futre, until economic circumstances change, the Promenade is going to be a symbol of ambition gone awry and failed dreams. The Promenade might now be known as the “Ghostwalk,” a regional symbol of the times, where the dreams of visionaries haunt the landscape, waiting without hope of a certain future.
Paul R. Bartleson
Sacramento Bankruptcy Lawyer.
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