General Growth Properties Inc. is seeking court permission to sell more than 60 acres in Las Vegas’ Summerlin residential development to a pair of home builders for about $38 million, pending higher bids at auction.
The deal will bring in cash that can be used to repay creditors and allow building to resume in the 22,500-acre development northwest of the Las Vegas strip, General Growth said in papers filed Thursday with the U.S. Bankruptcy Court in Manhattan. “The Summerlin sales will generate immediate cash for the estates, as well as benefit other nearby villages and similar future projects on account of developing what is now unproductive land,” General Growth said in court papers.
General Growth, which manages the Summerlin community and owns some 7,000 undeveloped acres, is seeking to sell lots to home builders Richmond American Homes and PulteGroup Inc.
Pulte has agreed to pay $20 million for a total of 31.5 acres. Richmond is offering $18 million for two parcels totaling 32 acres.
Others bidders could challenge those offers at a court-supervised auction for the property, but General Growth warned that it maintains “particularly high standards” for Summerlin builders. The homes will be part of a master-planned community and must meet certain specifications for style, size and price.
General Growth is seeking permission to pay Richmond and Pulte a “break up fee” equal to 3 percent if their offers are topped at auction.
A hearing to determine whether the company can move forward with its proposed sale plans is scheduled for July 22.
In addition, General Growth is seeking to sell two other developments in Summerlin: a 90-acre parcel slated for a “high-tech business” and 7.21-acre retail center designed for luxury automotive dealerships and restaurants.
The company did not name lead bidders for those but said it hopes to complete the sales in conjunction with the housing developments.
General Growth, primarily a mall owner, obtained the Summerlin development in its 1996 acquisition of The Rouse Co.
The 20-year old project is built on land once owned by Howard Hughes. Heirs to the billionaire are squabbling with General Growth over their stake in the property.
Summerlin, home to about 100,000 residents, has nine golf courses, a dozen places of worship and 25 schools.
General Growth, the nation’s second-largest mall owner, filed for Chapter 11 protection in April 2009. The Chicago company is plotting to emerge from bankruptcy with the help of a $6.5 billion investment from a group led by Fairholme Capital Management.
