THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, May 4, 1995 TAG: 9505040379
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Medium: 85 lines
Among the questions clouding the MacArthur Center project during the past year is who would put up the lion's share of the $270 million needed to build it.
On Wednesday, Norfolk city officials provided the answer: The Taubman Co.
``They're known as one of the premier mall operators, owners and developers,'' said Barry Curtis, an associate analyst with Alex.Brown & Sons. ``You've got one of the best in the business.''
Based in Bloomfield Hills, Mich., The Taubman Co. is affiliated with the Taubman Realty Group, L.P., which owns, manages and leases 20 posh regional shopping centers across the country.
Its malls are known for being clean, well-maintained shopping centers that draw mostly middle-class and affluent consumers.
Because of its experience in development, The Taubman Co. has a solid track record financially and a reputation for delivering on time. Taubman has agreed to contribute about $170 million in financing. Norfolk has already committed to the rest, or about $100 million of the mall's cost.
``They'll put up whatever's necessary themselves,'' said Alexius C. Conroy, the mall's developer. ``They have the financial capacity to fund the entire private portions of the project.''
``We do believe that this is an exceptional opportunity,'' said Christopher Tennyson, a senior vice president with Taubman. ``We would finance it like our other capital programs. We're a public company, and we have sources of capital and lines of credit. We would do it through normal borrowing channels, and we have a capacity to do that.
``Our feeling is we're going to move forward with all due speed,'' Tennyson said. ``We're bringing such an important project together downtown. We approach it with an equal sense of urgency and destiny (as Norfolk). We're getting right to work.''
Local real estate professionals welcomed the news of Taubman's involvement.
``They're one of the major shopping center mall developers and owners and managers in the United States, if not the world,'' said Harvey L. Lindsay, chairman and CEO of Harvey Lindsay Commercial Real Estate.
``They're a major player in the business of development retail centers. It gives added strength and experience and credibility to the development. I think it enhances the chances of the development succeeding in many different ways.''
Taubman is involved in expanding two of its retail centers in New Jersey and Illinois. It has also discussed building a mall in Tempe, Ariz. Its closest properties to Hampton Roads are Fair Oaks Mall in Fairfax; Lakeforest shopping center in Gaithersburg, Md.; and Marley Station in Anne Arundel County, Md.
Conroy, who approached Taubman about participating in the deal this year, expects it to take the lead with wooing prospective retailers. That would include finding a replacement for Macy's, which has postponed its involvement in the MacArthur Center.
Taubman's chairman, A. Alfred Taubman, is known throughout commercial real estate circles as a wheeler and dealer. He owns controlling stakes in Sotheby's, the art auction house, the Woodward & Lothrop department store chain, A&W Restaurants, and the Philadelphia-based John Wannamaker's stores.
Taubman's real estate company went public in November 1992, mainly to pay off his debts, according to published reports. Taubman Centers Inc., now a real estate investment trust, or REIT, trades on the New York Stock Exchange.
Taubman made his personal fortune, estimated to range between $600 million to $3.4 billion, by successfully developing malls known for their location, management and leasing. Sales at Taubman Realty Group malls exceeded $2.5 billion last year, according to the company.
Taubman is embroiled in a lawsuit involving Woodward & Lothrop Inc., the Washington department store chain that he owns, which is undergoing Chapter 11 bankruptcy proceedings.
``The Taubman REIT is not exposed to (Woodward & Lothrop) in any way,'' said Curtis, the analyst. ``It's known as one of the more solid REITs around.'' ILLUSTRATION: Color photo
``They have the financial capacity to fund the entire private
portions of the project,'' said current mall developer Alexius C.
Conroy, who approached Taubman about participating in the
construction.
KEYWORDS: MACARTHUR CENTER by CNB