KINGSPORT — Plans to expand and renovate the Kingsport Town Center starting next year are still on track.
That’s despite the soft economy and potential bankruptcy of Chicago-based General Growth Properties Inc., the third-party manager of the mall, formerly known as the Fort Henry Mall.
In addition, mall owner Somera Capital Management LLC announced Monday it is working with Marquee Cinema to expand the 11-screen cinema there to a 14-screen complex.
“We’re starting in the first part of 2009. I don’t think it’s going to be in January,” said Jack Farver, Washington, D.C.-based vice president of Somera.
The project, to be completed in 2011, is to cost $35 million to $40 million and get help from a property tax incentive recently granted by Kingsport.
The 530,000-square-foot mall, according to a news release, will undergo an extensive renovation and “re-merchandising” to improve the mall’s retail and restaurant mix. Outparcels are planned for the current parking lot area close to Fort Henry Drive and Memorial Boulevard. A food court and extensive interior renovations are also part of the plan.
“An affiliate of Somera Capital Management is the whole owner of the mall,” Farver said. “General Growth in no way is tied to the financing of the redevelopment or day-to-day operations.
“However, we are definitely not in a position to comment in any way on General Growth’s position as a company.”
General Growth stock plummeted after the mall owner and manager warned it may file for bankruptcy if it can’t refinance or extend nearly $1 billion in debt due next month.
The real estate investment trust also disclosed in a regulatory filing late Monday that it may default on certain debt obligations.
A statement from General Growth reiterated the ownership of the mall but did not address the speculation about a possible bankruptcy.
“Kingsport Town Center is wholly owned by an affiliate of Somera Capital Management LLC who contracts with General Growth Properties (GGP) for third-party management and leasing services only,” according to the Monday afternoon statement. “Kingsport Town Center’s finances are not tied to GGP and therefore the center’s redevelopment plans or its day-to-day operations are not affected by the recent news regarding GGP.”
Farver declined to say what would happen if General Growth does go into bankruptcy.
“Somera’s going to make the decision that is best for the property and best for Somera,” Farver said.
As for the movie theater, Somera is collaborating with IJM Enterprises, a California-based consulting firm that specializes in redevelopment strategies for movie theaters, and Marquee Cinema Inc. executives to formalize a plan for the expansion and renovation of the current cinema.
“It has been evident for some time that the Kingsport community can support a larger movie theater complex,” Farver said. “Marquee Cinema is a great operator and is in the perfect position to deliver an improved theater experience. IJM’s expertise in the movie theater business will help to ensure that we deliver exactly what the community wants and can support, to increase its patronage and revenue. Our goal is to elevate the standards of the existing cinema to better serve the residents in the Kingsport area as part of the overall mall renovation.”
For more information visit www.kingsporttowncenter.com.