| Fate: | Bankruptcy |
| Mills Corporation | |
| Successor: | Simon Property Group |
| Location: | Chevy Chase, Maryland |
| Industry: | Real estate |
| Products: | Shopping malls |
| Homepage: | www.themills.com (2003 archive) |
| Foundation: | (as Western Development Corporation) (as Mills Corporation) |
The Mills Corporation was a publicly traded real estate investment trust headquartered in Chevy Chase, Maryland, United States, acquired on April 3, 2007, by an investment group composed of Simon Property Group and Farallon Capital Management. The company developed, owned, and operated major super-regional shopping malls. The company built 18 "Landmark" centers in which the malls were named after "Mills", like "Vaughan Mills", or "St. Louis Mills"; and also over 20 "21st Century Retail" regional malls that they started operating in 2002, like Del Amo Fashion Center and Southdale Center. Most former Mills facilities have a large movie theater from 10 to 30 screens, and a large food court (sometimes two). Their facilities were normally built in colorful modern/abstract architectural designs, but in recent years have been renovated to more conventional designs with mainly neutral colors. Simon Property Group assumed management of the former Mills properties after the acquisition, and is operating the former "Landmark Mills" group as a separate operating segment within its organization.
The company started in 1967 as the Western Development Corporation, and its first mall was Potomac Mills in the Washington, D.C. metropolitan area in 1985. Then from 1989 to 1991, Franklin, Sawgrass, & Gurnee Mills opened each of those years, respectively. In 1994 the company converted to Real Estate Investment Trust (REIT) status and changed its name to "The Mills Corporation".[1] [2]
In 1996, with new CEO Lawrence Siegel, The Mills built Ontario Mills near Los Angeles, which was the company's first mall built abstractly and with a full oval racetrack design which followed into the rest of the company's built malls. Since opening Ontario Mills until 2005 with Pittsburgh Mills, The Mills built and opened at least one or two landmark malls each year.
In 2002, The Mills acquired six regular retail malls including the ailing Forest Fair Mall (became Cincinnati Mills from 2004 to 2009) and a nine mall portfolio in 2004, including former Taubman Centers, like Columbus City Center in order to redevelop and expanded to be more affordable centers. Also, the company also expanded to Europe with the opening of Madrid Xanadú in Spain.
The success of Madrid Xanadú prompted The Mills to embark on the $1 billion+ Meadowlands Xanadu complex in 2004, which was first planned as "Meadowlands Mills", but the project has caused numerous delays and cost the company financially. It was eventually sold to another developer, who planned it as American Dream Meadowlands.
In November 2004, Vaughan Mills was the first Mills Landmark built in Canada, and continued its international success with the acquisition of the St. Enoch Centre in Scotland and was offered to build a center in Rome, Italy.
After their last built mall was opened, Galleria at Pittsburgh Mills in July 2005, the company was investigated by the Securities & Exchange Commission for its financial problems.
On January 17, 2007, the Mills Corporation agreed to a buyout from Brookfield Asset Management, based out of Toronto. The deal was valued at US$1.35 billion. The company was forced to seek help after a possible management misconduct resulted in a $350 million accounting error. Brookfield would have paid $21 for each share of Mills Corporation.[3] However, on February 13, 2007, Mills announced that their board had determined that a competing offer from Simon Property Group of Indianapolis, Indiana was superior to the Brookfield offer. Brookfield had the option to submit a counter offer, but on February 16, 2007, Simon Property Group and Farallon Capital agreed to acquire Mills for $25.25 per common share.
On April 6, 2007, Farallon and Simon completed the acquisition of Mills. All former Mills malls became Simon properties at the acquisition date and are now shown on Simon's website. The Mills became Simon's fifth retail platform, along with Regional Malls (the 21st Century malls included) and Chelsea Premium Outlets. The new platform (for Landmark Mills only) is known as The Mills: A Simon Company.
Note: This is the first known instance of a developer selling naming rights to a mall in the United States.[5] [6]
These properties were in development by Mills Corporation before the Simon acquisition: