A report from Goldman Sachs suggests developer Taubman Centers may be getting cold feet about building a 765,000-square-foot mall at the massive Miami Worldcenter development, although the company said it remains committed to the project.
Goldman analysts said they believe that Taubman, a major operator of regional malls, could potentially back out of the Worldcenter project without more retailers signing agreements to lease space. Goldman pointed to competition from another planned mall, Brickell City Centre, as a possible stumbling block for the project in downtown’s Park West district, writing that “it would have been a slam dunk development without Brickell competition.”
Goldman also highlighted a moment on Taubman’s recent earnings call when chief financial officer Lisa Payne was asked about the health of the company’s capital levels.
Payne replied that the company was pleased with its balance sheet but also noted that “if we do commit further fully to Miami going forward, that’s going to be a use of cash,” according to a transcript of the call.
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But for its part, the Michigan-based retail developer reiterated Monday in interviews what it said publicly last week at a real estate conference: that it plans to move forward with the Worldcenter mall project, which has already signed leases with Macy’s and Bloomingdale’s. Construction is slated to start later this year.
“We have tremendous positive momentum and our expectation is that we are moving forward,” said Maria Mainville, a spokeswoman for Taubman. “As is the case with any project, there is always the potential that something might change. However . . . our expectation is that we are moving forward.”
Mainville also pointed out that Goldman’s report contained inaccuracies about how much the project would cost and when it would be delivered. Taubman also operates the Dolphin Mall in Sweetwater, as well as other retail centers across the U.S. and in Asia.
The Forbes Company, another partner on the mall, could not be reached for comment.
Master developers Art Falcone and Nitin Motwani have said the $1.7 billion Worldcenter project will revitalize the Park West area and boost the local economy. In addition to the mall, their plan also includes a 60-story condo tower and an apartment building.
The city of Miami has awarded about $108 million of tax rebates in order to help jump-start a project that failed to get off the ground for much of the last decade. But union groups and community activists have criticized the public subsidy as poorly thought out.
Falcone also recently settled a long-running lawsuit brought by Miami super-broker Edie Laquer who said she was unfairly cut out of the original development team in 2007.