The plans for Trader Joe's to expand its Twin Cities operations to Ridgedale Center have hit a speed bump as a result of a looming debt crisis for the mall's owner, one of the area's largest retail landlords.
General Growth Properties Inc., whose six Minnesota shopping centers include Ridgedale in Minnetonka, said Thursday that it has hired bankruptcy attorneys as it attempts to restructure about $27 billion in debt. The Chicago-based company, which owns or manages about 200 U.S. shopping malls, hasn't filed a bankruptcy petition yet, but it must soon figure out how to deal with about $900 million in secured mortgage debt that comes due Nov. 28.
Those mortgages are secured by properties in Las Vegas, but General Growth's debt problems, as well as the nationwide credit crisis, have crimped its ability to finance other projects. That includes site work for a stand-alone Trader Joe's planned for Ridgedale, according to Russ McGinty, a Twin Cities commercial real estate broker who has worked with Trader Joe's since it entered this market more than two years ago.
"The plans [for a Ridgedale store] are in a state of flux," McGinty said. "General Growth was supposed to deliver a site ready for construction, but it couldn't get a loan to do the work." McGinty declined to disclose the cost of the site work.
The city of Minnetonka in December approved plans for a 13,500-square-foot Trader Joe's store, with a deadline to begin work by before the end of this year, according to city planner Loren Gordon. About two weeks ago the city received a letter from General Growth asking for a one-year extension of the construction timetable. The letter didn't give a reason for the delay.
Gordon said the city granted the extension, but hasn't been told when work on the store would begin.
Representatives of Trader Joe's and General Growth declined to comment.
General Growth spent about $4 million last year improving Ridgedale, the first major upgrade since the mall opened in 1974.