With construction underway again at the Shops at Summerlin, the developer is slamming his predecessor for abandoning the project due in part, he said, to a lack of “courage.”
Howard Hughes Corp. CEO David Weinreb said in a letter to shareholders today that the previous developer — General Growth Properties, which he did not mention by name — spent more than $150 million on the office and retail hub near Red Rock Resort and had an “all-star” roster of tenants before mothballing the project during the national economic meltdown.
If its management had the money and “courage” to stick with the project, “despite how badly Las Vegas was hit by the downturn,” Weinreb wrote, the mall would be a “fortress” today.
When the economy crashed, numerous other developers stopped working on partially built projects throughout Las Vegas, ranging from Strip resorts to suburban condo complexes. Moreover, Howard Hughes is a spin-off from General Growth and, to finish the mall, is expected to spend much less than what its predecessor would have paid to develop it from scratch.
“I believe that anything really worth doing, whether in life or in business, requires persistence and perseverance,” Weinreb wrote. “Staying the course means having the necessary foresight, capital and, most importantly, courage to stick to your plan.”
General Growth spokesman David Keating declined to comment.
General Growth, based in Chicago, had lined up Nordstrom, Macy’s and Dillard’s for the project, then known as Shops at Summerlin Centre.
The company, however, stopped construction in October 2008, leaving a steel skeleton off the 215 Beltway, and filed for bankruptcy protection in April 2009, sinking under $27 billion in debt.
According to Bloomberg News, it was the largest real estate bankruptcy in history.
When the company emerged from bankruptcy in November 2010, it spun off Howard Hughes Corp. as a separate, publicly traded company with control over Summerlin Centre, the broader Summerlin master-planned community and several other projects nationwide.
Howard Hughes, based in Dallas, resumed construction last year on the Shops at Summerlin and had spent $107 million on it as of Dec. 31.
The 1.6 million-square-foot project is slated to open near the end of this year with department and specialty stores, including Macy’s, Dillard’s, Nordstrom Rack and Trader Joe’s.
Two weeks ago, Howard Hughes said it was months from obtaining a loan to cover much of the tab for the $391 million development.
It said it expects to close on the $312 million loan in the second quarter, though it did not say which lender, or lenders, would put up the cash.