Galleria’s Chapter 11

Posted on May 8, 2009
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The Hill Country Galleria in Bee Cave filed for Chapter 11 bankruptcy protection ahead of foreclosure earlier this week, so it’s not going away. The Galleria is a huge beautiful new outdoor mall similar to The Domain in North Austin. Go see for yourself – it has a state of the art movie theater, book store, sporting goods store, lots of restaurants and boutiques. With all the looming activity in the Lakeway area, it should be a huge attraction for a long time.

Opus and officials from the City of Bee Cave, which had provided sales tax incentives to the mall, said the bankruptcy was not the result of the mall’s performance.

Rather, John Greer, executive vice president of Opus West, blamed constricting credit markets and the complexity of refinancing the $191.8 million construction loan that was held by a consortium of 10 banks, which include Bank of America, Sovereign Bank and Guaranty Bank.

“With the protections afforded by bankruptcy law, we hope to complete a successful restructuring of the project’s debt on terms that will allow us to optimize value for the project’s lenders and other creditors,” Greer said in the release.

According to Opus, the mall had been meeting its debt obligations until earlier this year, when the short-term construction loan matured. At that point, no refinancing was available, the interest payment doubled, and the project went into default, Opus spokeswoman Winston Hewett said last month.

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