GGP, Hughes Heirs Reach Settlement Re: Summerlin Development in NV

Howard Hughes, Millionaire Fly Boy
Image by Wisconsin Historical Images via Flickr

General Growth, which owns roughly 200 malls in the U.S., aims to emerge from bankruptcy in November. Its predecessor, Rouse Co., agreed in 1996 to buy Summerlin from the Hughes estate, establishing a 14-year payment schedule that was to culminate in late 2009 with a final, lump-sum payment for any Summerlin land remaining unsold to residential developers.

However, in the meantime, General Growth bought Rouse and then sought Chapter 11 bankruptcy protection in April 2009 after failing to refinance portions of its $27 billion debt load as they came due. Thus, resolving the final payment for the 7,500 acres that remain unsold in the 22,500-acre Summerlin development lingered as one of the final hurdles General Growth had to clear before exiting bankruptcy.

The settlement, finalized late Friday, ties up a loose end that had concerned investors and General Growth itself. Analysts had estimated that the final settlement of the claim could have cost General Growth from $100 million to $500 million, depending on the results of appraisals of the land.