Mills Corporation

Former real estate investment trust From Wikipedia, the free encyclopedia

The Mills Corporation (stylized as THE MILLS) was a publicly-traded real estate investment trust headquartered in Chevy Chase, Maryland, that developed and operated super-regional shopping malls. Mills-developed malls were typically built as large, single-floor facilities with a mixture of off-price retail and entertainment offerings. The company also had a sizeable portfolio of acquired properties, which tended to be smaller in scale.

Company type
Subsidiary (1991–1994, 2007–present)
Industry
FoundedJanuary 2, 1991; 35 years ago (January 2, 1991)[1] (became public on April 21, 1994)
FounderHerbert S. Miller
Quick facts Company type, Industry ...
The Mills Corporation
Company type
Subsidiary (1991–1994, 2007–present)
Industry
FoundedJanuary 2, 1991; 35 years ago (January 2, 1991)[1] (became public on April 21, 1994)
FounderHerbert S. Miller
DefunctApril 6, 2007; 19 years ago (2007-04-06)
FateFinancial difficulties and acquisition by Simon Property Group
Successors
HeadquartersChevy Chase, Maryland
ProductsShopping malls
Parent
Website
Close
Sawgrass Mills is the company's flagship property, and one of the largest shopping centers in the Fort Lauderdale metropolitan area.

The Mills Corporation was formed in 1991 (went public in 1994) as a spinoff of founder Herbert S. Miller's Western Development Corporation, which continued operating privately, primarily in Washington, D.C., with the development of Georgetown Park in September 1981 and Gallery Place in 2004 with Akridge.

On April 3, 2007, following financial difficulties, the company was acquired by an investment group composed of Simon Property Group and Farallon Capital Management. At the time of the acquisition, the company operated 36 malls across the United States, 15 of which it had developed. Following the acquisition, The Mills was reorganized into a Simon subsidiary which manages the company's portfolio of indoor outlet malls.[2]

History

Western Development Corporation

Franklin Mills Kite Entrance (April 2008)

The company started in 1967 as the Western Development Corporation, founded by Herbert S. Miller and Richard L. Kramer. In the late '60s to the early '70s, Western developed the Mazza Gallerie in a joint venture with Mrs. Olga Mazza, the real estate subsidiary of ExxonMobil, and anchor store brand Neiman Marcus. They also developed strip malls and office buildings in collaboration with the Bloomfield Hills, Michigan-based Taubman Company.[3] In 1975, Western partnered with the Donohoe Construction Company for the development of what would be planned as a mixed-use shopping park in Downtown Washington, D.C.. They developed Georgetown Park, which opened on September 27, 1981 and combined retail with residential and office elements.[4]

Western's first mall to use the Landmark Mills template was Potomac Mills in the Washington, D.C. metropolitan area, which opened its first phase on September 19, 1985. Rather than relying on department stores, the Mills concept would combine off-price stores with factory outlets. Later, in 1986, Western acquired a former Treasury department store in Rolling Meadows, Illinois, which permanently closed in 1981. The company redeveloped the vacant space into Algonquin Mills.[5] In December 1988, Western sold the mall to Aetna Life Insurance Company and The Tucker Companies, and it was renamed Meadows Town Mall.[6]

The company developed Franklin Mills in Philadelphia, Pennsylvania, which had its grand opening celebration on May 11, 1989, advertised as The Mall To End Them All. Western named and themed the mall after Benjamin Franklin, making it the company's second Landmark Mills mall development.[7][8] Then, Sawgrass Mills in Sunrise, Florida, a suburb of Fort Lauderdale, and Gurnee Mills in Gurnee, Illinois, a suburb of Chicago, opened in October 1990 and August 1991, respectively. Sawgrass Mills was a flagship property for Western Development Corporation, and their third Landmark Mills mall development, designed to be themed after and resemble an alligator. Gurnee Mills would follow as the fourth Landmark Mills mall and the final Mills-branded mall developed under Western.[9]

The Mills Corporation

The Rowhouse Entry at Charm City Neighborhood 1 at night - Arundel Mills

In 1994, Western Development Corporation spun-off its four Mills-branded malls into a public, real estate investment trust development firm, known as The Mills Corporation, which was already formed in 1991 as a private subsidiary. The new firm was named after Herb Miller and the Landmark Mills malls.[10][11] In November 1996, under new CEO Lawrence C. Siegel, The Mills developed Ontario Mills near Los Angeles, which was the company's first mall designed abstractly and with a full oval "racetrack"-like design which followed into the rest of the company's built malls, including Grapevine Mills in the Dallas-Fort Worth metroplex, which opened to the public on October 30, 1997, right when Halloween was about to start. In collaboration with Taubman Centers, Arizona Mills in suburban Phoenix opened in November of that year.[12]

Originally planned as City Mills, the company debuted The Block at Orange in late November 1998, as their first outdoor mall to not use the "Mills" name.[13] Sawgrass Mills was expanded with the addition of The Oasis at Sawgrass Mills, which opened on April 15, 1999, featuring restaurants and entertainment.[14] In September 1999, The Mills Corporation opened its first mall to use sponsorships, being NASCAR for Concord Mills in North Carolina, designed by the St. Louis-based Kiku Obata & Company.[15] This was followed by Katy Mills in October of that year in suburban Houston, making it their first time to develop another Mills mall in the same state (Texas), as the previous one, Grapevine Mills, was also in Texas.

Polar Palace at Discover Mills

The Mills Corporation used sponsors again with the development of Arundel Mills in Hanover, Maryland, a suburb of Baltimore. Arundel Mills was designed to serve shoppers from both Baltimore and D.C., and became a tourist attraction, including the Muvico Arundel Mills Egyptian 24 megaplex theater (now Cinemark Egyptian 24). The sponsors for Arundel Mills were The Coca-Cola Company, Toyota, The Baltimore Sun, Comcast, and Discover Card.[16] Additional sponsors included Bank of America and the University of Maryland Baltimore Washington Medical Center.[17] Designed by the Baltimore-based RTKL Associates and D'Agostino Izzo Quirk of Somerville, Massachusetts, the architects and Mills took inspiration from The Rouse Company for the development of Arundel Mills.[18]

The company wanted to try developing power centers and strip malls adjacent to their main outlet malls to better serve the community, including people who are shopping for daily goods that do not need to go to the main mall. As a result, they opened Concord Mills Marketplace in October 2001.[19] Mills sold naming rights to its planned Sugarloaf Mills Mall in Metro Atlanta to Discover Card; the mall opened in November 2001 as Discover Mills and was also sponsored by Coca-Cola to include the Polar Palace in Neighborhood 5. This was the first instance of a mall selling its own naming rights.[20][21]

In September 2002, The Mills acquired six regular retail malls including the failing Forest Fair Mall (which it renamed Cincinnati Mills), and a nine mall portfolio, including former Taubman Centers, like Columbus City Center in order to redevelop and expanded to be more affordable centers. The company also expanded to Europe with the May 2003 opening of Madrid Xanadú in Spain.

St. Louis Mills Entrance 2 at night - July 2006

The company opened Arundel Mills Marketplace in 2003, which is across the street from Arundel Mills, and partnered with PBS for the development of the PBS Kids Backyard and its larger version, the PBS Kids Neighborhood. The first mall to use this learn-and-play area was St. Louis Mills, which opened on November 13, 2003. In addition to PBS, Discover Card and Coca-Cola, The Mills Corporation also formed partnerships with Crayola, ESPN, and Gibson Guitar, as well as partnering with other mall developers, such as Stevinson Associates for Colorado Mills, which opened one year prior to St. Louis Mills.[22][23]

The success of Madrid Xanadú prompted The Mills to embark on the $1 billion+ Meadowlands Xanadu megamall and entertainment complex, which began construction in September 2004, which was first planned as Meadowlands Mills (which was forced to be canceled in 2002 due to environmental concerns), but the project has caused numerous delays and cost the company financially. This resulted in the facility remaining unfinished for several years.

In February 2004, The Mills Corporation relocated its headquarters from Arlington, Virginia to Chevy Chase, Maryland.[24] Cincinnati Mills had its grand reopening in August 2004. The mall was renovated and featured an updated paint job. It was the first Landmark Mills mall to have its neighborhoods named after letters instead of numbers, and the second to have two stories, the first being Algonquin Mills. In September 2004, Gallery Place had its grand opening, developed by the main company, Western Development Corporation in collaboration with Akridge. It was a mixed-use development in D.C.[25]

In November 2004, Vaughan Mills was the first Landmark Mills mall developed 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 Barcelona[26] and Rome, Italy (which was eventually never developed). The Mills Corporation and Ivanhoé Cambridge planned to develop several other Landmark Mills malls in Canada, being in Montreal, Calgary, and Vancouver.[27]

Pittsburgh Mills in October 2019

Galleria at Pittsburgh Mills had its grand opening in July 2005, developed in a joint venture with Zamias Services, Inc., the latter of which originally planned the project in 1981 as Frazer Heights Galleria. It was the first Landmark Mills mall to feature traditional anchors rather than outlet versions, including Kaufmann's (later Macy's[28]), JCPenney, and a Sears Grand store.[29]

Starting in May 2006, the company was investigated by the Securities & Exchange Commission for its financial problems. As a result, Mills sold all of its Canadian and international properties – including the rights to use the "Mills" name – to Ivanhoé Cambridge for $981 million ($1.1 billion in CAD) on August 15, 2006. This included the plans to develop the Landmark Mills malls in other parts of Canada, leading to the August 2009 opening of CrossIron Mills in Calgary, the October 2016 opening of Tsawwassen Mills in Delta, British Columbia, and the proposed Laval Mills in Laval, Quebec (which was canceled in May 2011 for unknown reasons).[30] The Colonnade Outlets opened at Sawgrass Mills in March 2006.

Meadowlands Xanadu remained stalled for over a decade after Mills sold it to Colony Capital Acquisitions LLC. The mall eventually opened in 2020 as American Dream by Triple Five Group[31], which is planning to develop another mall in Miami of the same name, which has also been stalled and has yet to break ground as of April 2026.[32]

Acquisition by Simon Property Group

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.[33] 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.

The acquisition was completed in April 2007, and 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 and Chelsea/Prime Retail Premium Outlets. The new branding for The Mills Corporation is known as The Mills: A Simon Company, or simply The Mills.[17]

KanAm Grund Group

The Mills Corporation frequently partnered with German-based investment firm KanAm Grund Group, which helped fund and develop multiple Mills malls. Through funds like KanAm USA XX and XXI, they held stakes in major U.S. malls, including Arundel Mills, Concord Mills, Colorado Mills, and Galleria at Pittsburgh Mills.[34] During the SEC investigation of The Mills Corporation, KanAm froze its funds in 2006, with Simon Property Group and General Growth Properties (GGP) interested in acquiring them.[35] In the case of Washington Harbour, that property was developed under KanAm Realty, a subsidiary of KanAm International.

After Simon acquired The Mills Corp., they later attempted to acquire KanAm's shares in the Mills portfolio. However, the Joint Venture Agreements contract stated that to acquire KanAm, they had to be paid in "Mills Units". When Simon acquired Mills, those specific units technically went defunct. KanAm sued Simon for this, arguing that the attempted buyout was a breach of contract, and while Simon responded by offering KanAm "Simon Units" as an alternative, KanAm insisted on the Mills Units, and in March 2017, the lawsuit was settled by the Delaware Court of Chancery, which sided with KanAm and argued that because Simon phased out the Mills Units, they are permanently barred from buying out KanAm's shares in the Mills portfolio.[36]

Because of this, KanAm continues to hold shares in the following Mills malls. The percentage next to the mall names is the amount of shares they own.

  • Arundel Mills (40.7%)
  • Potomac Mills (0.9%)
  • Concord Mills (40.7%)
  • Opry Mills (50%)
  • Colorado Mills (62.5%)
  • Katy Mills (37.5%)
  • Sugarloaf Mills (75%)
  • The Outlets at Orange (50%)
  • Franklin Mall (50%)
  • Grapevine Mills (40.7%)[37]

Former Mills properties

Properties marked with an asterisk (*) were sold prior to The Mills' acquisition by Simon Property Group. Properties marked with two asterisks were a development of Western Development Corporation and were never under the Mills label. The years next to the mall names are their opening date.

Developed by Mills/Western

Acquisitions

Planned

Post-acquisition

These properties were acquired by Simon after the 2007 merger and were placed under the control of The Mills subsidiary. The year next to them is the acquisition date.

References

Related Articles

Wikiwand AI