The Rouse Company Explained

The Rouse Company
Type:Commercial Real Estate Development
Predecessor:Moss-Rouse Company
Successor:General Growth Properties, The Howard Hughes Corporation (2010)
Defunct:2004
Location:Columbia, Maryland, U.S.
Industry:Retail and Mixed-Use Centers, Master Planned Communities ("New Towns")
Key People:James Rouse, Melvin J. Berman, Mathias J. DeVito, Hunter Moss, Churchill Gibson Carey, Charles "Chili" Jenkins.
Subsid:The American City Corporation, Howard Research and Development, Community Research and Development

The Rouse Company, founded by Hunter Moss and James W. Rouse in 1939, was a publicly held shopping mall and community developer from 1956 until 2004, when General Growth Properties (GGP) purchased the company.

Beginnings: Moss-Rouse Company

The Moss-Rouse Company was founded as a FHA mortgage company with a loan from Hunter Moss's sister. Rouse leveraged his knowledge as loan guarantee specialist at the Federal Housing Administration to establish a Baltimore-based mortgage company specializing in FHA backed loans. Moss-Rouse hired a World War Two Navy friend, Churchill G. Carey from Connecticut General, who in turn provided capital for future projects. Carey would hold positions ranging from president to CEO of the mortgage company subsidiary.[1] In 1952-1953 the company built one of the first modern architecture office buildings on Saratoga Street in Baltimore, while also dropping its commercial lending business line. Jim Rouse hired his brother, Willard Rouse II, in 1952, and partner, Hunter Moss, phased out of operations, selling his shares of the company, while remaining temporarily on the board of directors.[2] The firm was renamed the James W. Rouse & Company, Inc., with Rouse owning 50% equity, his brother, Willard, 10%, and 40%, to company officers.[3]

The James W. Rouse Company

The James W. Rouse Company built some of the first enclosed shopping malls, and it pioneered the development of festival marketplaces, such as Jacksonville Landing in Jacksonville, Faneuil Hall in Boston, South Street Seaport in New York City, Harborplace in Baltimore, and Bayside Marketplace in Miami. They also developed The Shops at National Place in downtown Washington, D.C. that opened in 1984–85.

On 20 June 1966, The James W. Rouse Company was renamed The Rouse Company.[4] The company has been credited as the pioneer of the first successful food court in an enclosed shopping mall, when the food court at the Sherway Mall in Toronto opened in 1971. It followed an unsuccessful attempt at the Plymouth Meeting Mall in 1968, which reportedly failed because it was "deemed too small and insufficiently varied."

The company moved its headquarters to the Cross Keys development, then to the project at Columbia, Maryland in December 1969.[5]

Its community projects include the Village of Cross Keys in Baltimore and the planned cities of Columbia, Maryland (where it was headquartered), Bridgeland Community, Texas, and Summerlin, Nevada. To develop these projects, in 1962 Rouse brought on Bill Finley, who built a planned "company town", Ravenswood, West Virginia, was a former planner with the National Capital Planning Commission proposing planned cities, and was a proponent of public-private partnerships.[6]

Columbia Research and Development was founded as a public company and Howard Research and Development was formed as a Rouse subsidiary in 1956 to raise capital for four mall projects and later to facilitate the Columbia Project with Connecticut General and Chase Manhattan as stakeholder with interest deferred loans.[7] In 1966 The James W Rouse Company was restructured as the Rouse Company, adding Howard Research and Development (HRD) as a separate entity shielded Rouse Corporation from debt liability of the Columbia development. HRD lost money, with new rules affecting the parent company as well. In 1974, HRD was refinanced.[8] Columbia Development Corporation was formed a subsidiary of HRD using subcontracted Rouse Company employees. In 1985 CIGNA (Connecticut General) divested its interest in HRD and the project back to Rouse for $120 million at a net loss.[9] [10]

Rouse created the subsidiary company The American City Corporation to take advantage of the National Urban Policy and New Community Development Act of 1970, A HUD program which granted developers incentives and loans to build Title VII "New Towns" with mandatory percentages of low income housing projects. Rouse's former ACTION member, Leo Molinaro was selected to run the subdivision.[11] The symposiums held by the company gathered together investors like George Mitchell, who would go on to develop Woodlands, Texas using the Columbia model.[12] [13] The subsidiary was based at "Two Wincopin" in the second office building in built in Columbia in 1968. It was renamed the American City Building, using the subsidiary to lease the empty space and develop the system of Public-Private partnerships that Rouse would use worldwide to minimize risk in developments using public debt.[14] The business was given its own postal office, the American Cities Station in 1977.[15]

The Columbia development was marketed as a progressive community for all races. In 1971, the company responded to pressure from the NAACP that the company was absent of African Americans at all management levels and its businesses in Columbia were predominantly white owned. The company responded with an affirmative action program in November 1971.[16]

In 1973, the former assistant attorney general of Maryland, Mathias J. DeVito, left the Rouse-owned legal firm of DLA Piper to replace James W. Rouse as President of the Rouse Company, and Rouse became Chairman.[17] DeVito cut staff from 1,700 to 500 to keep the company afloat in 1975.[18] In 1974, the Columbia development got a political boost as the population of Columbia supported a slate of at-large council candidates with Columbia interests, including Ruth U. Keeton, Lloyd Knowles, and Columbia's city manager, Richard L. Anderson.[19]

In 1979, Simon H. Schuer acquired a 7.5% interest in the Rouse Company. He was the creator of "The Shrink", a method where an investor buys an interest in a company, then orders stock buy-backs to make the interest more valuable. Schuer died the day after the purchase, and Trizec Properties then acquired the shares and bought a 25% stake. In 1986, the company attempted to purchase a majority share.[20] [21] [22]

In 1985, The Rouse Company absorbed all of Connecticut General's interests in the Howard Research and Development subsidiary. In 1986, former general manager of Columbia and executive vice president of development Micheal Spear became president as a successor to Rouse. In 1990, Spear died in a crash with his wife and one daughter in his Piper PA-31T Cheyenne attempting a single engine missed approach near Logan International Airport.[23] [24]

In 1997, Anthony Deering took over as CEO of the company.[25]

In 1996, Howard Hughes Corporation, which had extensive property and other business interests, became a subsidiary.

On November 12, 2004, the Rouse Company was sold to General Growth Properties.[26]

In 2012, General Growth Properties spun off 30 "class B" malls into Rouse Properties, a new real estate investment trust named after (but otherwise unrelated to) The Rouse Company.[27]

Investments

Notes and References

  1. News: The Baltimore Sun. 5 April 2008.
  2. Book: Jim Rouse: Capitalist/idealist. 39. Paul Marx.
  3. Book: A New City Upon a Hill. 47. Joseph Rocco Mitchell, David L. Stebenne.
  4. Book: New City Upon a Hill . Joseph Rocco . Mitchell . David L. . Stebenne . 94.
  5. News: Baltimore Sun . Columbia's first 25 years: a chronology. 14 June 1992.
  6. Book: New City Upon a Hill . Joseph Rocco . Mitchell . David L. . Stebenne . 66.
  7. News: The Times. The Story that Changed a County . 31 March 1965.
  8. News: . Refinancing Completed For Columbia Planner . 16 August 1975 . William H Jones.
  9. Book: Better Places, Better Lives . Joshua Olsen. 237.
  10. News: The Washington Post . Rouse to Buy Out Columbia Partner: To Gain Complete Control Over Future Development of Planned Community. 31 May 1985 . Caroline A Mayer.
  11. Book: Housing for People with Mental Illness: A Guide for Development. Leo Molinaro. 1988.
  12. Book: Urban Life In New and Renewing Communities. The American City Corporation . January 1971.
  13. Book: Jim Rouse: Capitalist/idealist . Paul Marx . 160.
  14. Book: Burke . Missy . Emrich . Robin . Kellner . Barbara . Oh, You must live in Columbia . 2008 . Columbia Archives . Columbia, Maryland. 113.
  15. Web site: Checklist of Maryland Post Offices . https://web.archive.org/web/20090419035342/http://www.postalmuseum.si.edu/statepostalhistory/Maryland_Post_Offices.pdf . 2009-04-19 . 17 May 2014 . Smithsonian National Postal Museum.
  16. News: The Baltimore Sun . Rouse asks his firm to hire more negroes . 2 November 1971.
  17. News: The Baltimore Sun . DeVito is new president of the Rouse Company . 9 March 1973.
  18. News: The Baltimore Sun . Quadrupled Rouse Company Cuts Back . Hope Laundauer. 9 February 1975.
  19. Book: Reforming Suburbia, The Planned Communities of Irvine, Columbia, and the Woodlands . Ann Forsythe . 265.
  20. News: The Baltimore Sun. Group buys Rouse stock, says it may plan takeover . 24 October 1979.
  21. New York Magazine . 28 May 1990 . The War of the Schuers . 42.
  22. Bloomberg . Madoff Saps Fortune of Heirs of Wall Street 'King' . 12 March 2009 . Miles Wiess.
  23. News: The Seattle Times. 25 August 1990. Plane Crash Kills Head Of Firm That Developed Westlake Center.
  24. Web site: NTSB report NYC90FA199. 5 February 2014.
  25. News: Anthony Deering, led Rouse Company and orchestrated its sale . Jacques . Kelly . . November 17, 2017.
  26. General Growth Properties, Inc. Completes Merger of the Rouse Company . . November 12, 2004.
  27. Web site: Weiderman . Greta . 2012-01-04 . General Growth to spin off weak malls . 2024-07-09 . . Advance Publications.
  28. Book: A New City Upon a Hill. 47. Joseph Rocco Mitchell, David L. Stebenne.
  29. House & Home. May 1953. 148.
  30. Book: Talbot County. Dickson. 339.
  31. Book: Jim Rouse: Capitalist idealist. Paul Marx. 91.
  32. Book: A New City Upon a Hill. 53. Joseph Rocco Mitchell, David L. Stebenne.
  33. Book: City Upon a Hill. Joseph Rocco Mitchell, David L. Stebenne. 53.
  34. News: The Baltimore Sun. Rouse To Aid Rebuilding City. 8 February 1969.
  35. News: The Baltimore Sun. Rouse Proposes 'New City' On Staten Island: Creation Would House 150,000 Families On 10,600 Acres. Louis P. Peddicord. 17 May 1970.
  36. News: The Baltimore Sun. A Rouse failure, an island's gain Saved: Wye Island remains an environmental crown jewel after James Rouse was thwarted in his bid for its limited development. 12 April 1996. Tom Horton .
  37. News: The Baltimore Sun. Tennessee new town planned. 8 April 1973.
  38. Book: The new architecture of the retail mall. Barry Maitland. 148.

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