General Growth Reaches Agreement With Heirs of Howard Hughes Regarding Summerlin Development
by Business Wire
General Growth Properties, Inc. (NYSE: GGP) today announced it has reached an agreement to settle its dispute with the heirs of Howard Hughes regarding the Summerlin planned community in Las Vegas, NV. Under the terms of the agreement, GGP will pay $230 million to the Hughes heirs in exchange for a full release and settlement of all claims against GGP and its affiliates. The amount will be paid shortly after GGP’s emergence from bankruptcy. Ten million dollars will be paid in cash and the remaining $220 million may be paid either in cash or in shares of new GGP common stock at the election of the company.
“We are very pleased to reach a mutually beneficial settlement agreement with the heirs of Howard Hughes regarding Summerlin,” said Thomas H. Nolan Jr., president and chief operating officer of GGP. “With this agreement, GGP settles one of the last remaining material issues impacting the capital structure of the new GGP and ‘Spinco’ as we continue our steady march toward emergence from bankruptcy. It has always been our preference to reach an agreement with the Hughes heirs, with whom we have had a very successful venture for many years. The Summerlin master planned community is one of the premier communities in the nation and has a long track record of strong and consistent financial performance. It is indicative of the type and quality of assets that will comprise ‘Spinco’, the GGP spin-off company that will consist of our portfolio of master planned communities and other real estate assets with long-term value creation potential.”
The Summerlin master planned community spans 22,500 acres along the western rim of the Las Vegas Valley located approximately 12 miles from downtown Las Vegas. Currently home to nearly 100,000 residents, Summerlin includes hundreds of neighborhoods and dozens of villages - all connected by a 150-mile-long trail system and nearly 150 parks. Summerlin is located adjacent to Red Rock Canyon National Conservation Area, a world-class hiking and rock climbing destination
With 26 public and private schools, four institutions of higher learning, nine golf courses, major health and medical centers, business parks, shopping centers, cultural facilities and more than a dozen houses of worship, Summerlin is a multi-generational and fully integrated community. Since its inception in the early 1990s, Summerlin has consistently ranked in the Robert Charles Lesser annual poll of Top Ten Master Planned Communities in the nation, and Summerlin still has more than 7,500 acres left to develop.
The settlement agreement is subject to approval of the Bankruptcy Court as part of the plan of reorganization process.
GGP currently has ownership and management interest of more than 200 regional shopping malls in 43 states, as well as ownership in planned community developments and commercial office buildings. The Company’s portfolio totals approximately 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. The Company’s common stock is traded on the New York Stock Exchange under the symbol GGP.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons, including, but not limited to, our ability to successfully complete our plan of reorganization and emerge from bankruptcy, our ability to refinance, extend, restructure or repay our near and intermediate term debt, our substantial level of indebtedness, our ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, our liquidity demands and retail and economic conditions. Readers are referred to the documents filed by General Growth Properties, Inc. with the Securities and Exchange Commission, which further identify the important risk factors that could cause actual results to differ materially from the forward-looking statements in this release. The Company disclaims any obligation to update any forward-looking statements.