SOUTH PORTLAND — General Growth Properties has cancelled plans to build a mini-mall featuring a Barnes & Noble book store on Maine Mall Road.
The decision comes as GGP plans its biggest development project to date – in Maryland – and fights a hostile takeover bid in bankruptcy court from the nation’s largest owner of malls.
But the Chicago-based company, which owns and operates the Maine Mall and more than 200 regional malls in 43 states, has killed plans for a development on a vacant six-acre lot on Maine Mall Road between the Wyndham Portland Airport Hotel and the Days Inn.
Although a sign still stands on a gravel lot advertising the Maine Mall Commons development, mall General Manager Craig Gorris said GGP is no longer pursuing the project.
“We are not in a position to continue that development as it was proposed,” Gorris said. “But we’re still actively looking for the best use of that land.”
The $7.8 million development would have included Barnes & Noble, which has a store in Augusta, along with two unidentified restaurants and four retail stores.
Assistant City Manager and Economic Development Director Erik Carson said in an e-mail that “it would be disappointing for this project not to go forward.”
Carson would not comment on the impact the loss of the project would have on city revenues, which are declining.
The nearly 58,000-square-foot project would have been built on land previously intended for a new Best Buy store. Prior to demolition for the new store, the property contained a cinema, Pizza Hut and International House of Pancakes.
It is the second major development project to be cancelled in South Portland in the last few years.
The mall previously planned a major revitalization project with a movie megaplex in the former Filene’s store and several satellite restaurants. But those plans were dashed when GGP could not agree to a lease with Regal Entertainment, which would have operated the 16-screen, 3,200-seat cinema.
GGP presented its plans for Maine Mall Commons to the Planning Board in December 2008, shortly after announcing it was saddled with $27 billion in debt and would seek Chapter 11 bankruptcy protection.
While the board unanimously endorsed the plan, members questioned GGP’s capacity to execute the project. But GGP officials said that business at the Maine Mall was strong and they were eager to move the project forward.
John Charters, GGP vice president of development, said at the time that retailers were interested in the project and that he expected letters of intent to be signed soon after the project received approval.
Gorris would not disclose how many retailers ultimately joined the development.
The company’s financial picture has improved since it filed for bankruptcy protection. Last month, GGP announced the successful restructuring of $10.25 billion in mortgages for 112 of its 166 affected properties, including the Maine Mall.
But now it faces a hostile bid from Indianapolis-based Simon Property Group, the largest owner of malls in the country. Last week, according to a press release, Simon offered to buy GGP for $10 million. GGP has not responded to the offer, which was made in U.S. Bankruptcy Court for the Southern District of New York.
Corporate troubles aside, Gorris said that until the economy turns around and empty storefronts begin filling up, no one should expect new developments in the mall area.
“It’s all about supply and demand,” he said. “Until inventories settle and some of these boxes get leased up, you’re just not going to see a lot of development from General Growth or any other company.”
Should the company reconsider the Mall Commons development, City Planner Steve Puleo said GGP has until December to substantially begin construction.
GGP is proceeding, however, with a 30-year master plan for up to 13 million square feet of retail, commercial, residential, hotel and cultural projects on 390 acres in Howard County, Md.
Most of that property is already controlled by GGP.
Randy Billings can be reached at 781-3661 ext. 100 or email@example.com
Struggling to emerge from bankruptcy, the owners of the Maine Mall have scrapped plans for the Maine Mall Commons development, which would have included a Barnes & Noble book store on Maine Mall Road in South Portland.