Developing development debacle; Problems piling up for Elk Grove Promenade developer

General Growth faces mounting debt, tight credit; Insiders selling shares

General Growth Properties, Inc., is facing troubles at more than just the Elk Grove Promenade. In fact, the delay of the drive-thru mall on Elk Grove's south side is peanuts compared to the companies mounting debt.

According to a story published in the Las Vegas Review-Journal, the Chicago based mall developer is looking at a debt burden that will grow to $17.6 BILLION in just three years.

The Chicago-based company that owns Fashion Show and luxury malls in The

Venetian and Palazzo resorts has more than $2.5 billion in debt maturing by the end of the year, $3.3 billion in 2009 and $17.6 billion by 2011.

The debt is coming due at a time when credit markets are dry, real estate values are stagnant or in decline and low consumer confidence is squeezing retailers who rent space in General Growth malls and other shopping centers across the country.

The company has more than $25 billion in debt and, compared to similar companies, a greater share is secured directly with real estate assets.

Fitch Ratings mentioned the debt late last year when it rated General Growth at "BB," a junk-level status.

A financial blogger mentioned in the Review-Journal story paints a very bleak picture of General Properties.

The tightening credit markets, the national recession and foreclosure crisis have taken a toll on GGP stock. As you can see from the chart, GGP has lost half of its stock value in less than a year.

Meanwhile, The Wall Street Journal reports that a top executive at GGP has sold half of his shares (700,000 shares) at what looks to be 52 week low. Selling because he fears (knows?) the shares have much farther to fall?

This situation is beginning to sound a little like that energy trading company in Houston that collapsed a few years back. What was it's name, En something?

So if the Elk Grove Promenade sits empty for a few more years, just who will pay the price? We can think of three name that ought to take lots of heat for this developing development debacle.