What to do with the Elk Grove Promenade?

Mall developer teetering; Is General Growth Properties the Enron of mall developers ?

This has not been a good week for Elk Grove Promenade developer, Chicago-based General Growth Properties (GGP).

First came news that it had replaced (fired?) it's chief financial officer and suspended dividends. Seems some top executives were dumping shares recently.

Reportedly the executives were selling to cover margin accounts on the GGP stock. Can you say insider trading?

Sounds a little Enron-ish doesn't it? What are these executives doing, channeling Ken "Kenny Boy" Lay and Jeffrey Skilling?

Next came news that GGP's credit rating got cut again. Investors are concerned that GGP will not be able to refinance $1.1 Billion in debt due next month.

GGP also was added to list of companies exempt from short selling. This was an acknowledgement that GGP's stock is vulnerable to significant price declines - which was correct.

Business Week summed up GGP's problems:

Analysts believe that Chief Executive John Bucksbaum, who put the 54-year-old outfit deep into hock as he bought up retailing real estate across the country, could be forced to sell the company and its more than 200 malls nationwide because he'll be unable to make payments on its staggering $27.4 billion debt load. "GGP is at the end as a going concern," says RBC Capital Markets analyst Richard C. Moore II. "It's time for them to go away."

So, just where does this leave the City of Elk Grove?

At a minimum Elk Grove city manager Laura Gill might want to pull out the budget forecast for the next few years and see how the loss of the projected multi-million dollar sales tax revenues will impact city services.

As for the Elk Grove City Council, how does it feel to realize you made a deal with what is beginning to look like the Enron of mall developers?