Providence Place up for sale

By
Tuesday, January 27, 2009

Whether to catch a movie or to do some dorm room shopping, Brown students head to Providence Place Mall. But perhaps many are unaware that the owner of the mall, General Growth Properties, Inc., has decided to sell the property to help pay off the company’s $27 billion debt. The mall is being sold by the New York office of U.K.-based property consultant firm Savills.

An ownership change would not affect the retailers who rent space in the mall – a welcome relief given the country’s difficult economic situation – the Providence Journal reported Jan. 13. The company’s spokesperson also told the Journal that shoppers should only expect to see small changes in the print on some signs inside the mall.

Most of the mall employees contacted by The Herald were unaware that the property was up for sale. Representatives of the company did not return multiple requests for comment.

The mall has performed well despite the economic downturn, according to recent sales tax data. It generated $13,981,625 in sales taxes for Rhode Island in 2007, a record for the state, according to the Journal.

Despite the mall’s success, there is little chance it will sell soon in this economy due to a lack of able buyers, Joel Bloomer, a senior equity analyst at investment research firm Morningstar, told the Journal.

The company owns over 200 regional shopping malls in 44 states across the country and 24,000 retail stores on the commercial properties, according to its Web site. It has owned Providence Place, which opened in 1999, since August 2004.

In order to help lessen the company’s debt, its lenders agreed to extend their deadlines to repay $900 million in loans on two Las Vegas properties, the company said in a statement recently. But it still faces the prospect of bankruptcy if it cannot repay its debts.

One Brown student interviewed by The Herald said he was skeptical of the mall’s appeal despite assertions of retail robustness.

“Who would buy the mall?” said Ryan Kaplan ’12. “I was in there today, and it was empty all day. I honestly don’t know how they make money.”

Another student said a change in mall ownership was unlikely to affect him.

“It makes no difference to me,” said Jason Gorelick ’12. “It’s not like it’s going to be gone.”