Summerlin developer, companies reach settlements over unfinished mall

By Steve Green

Thursday, Feb. 18, 2010 | 9:13 a.m.

The bankrupt developer of Summerlin has reached settlements with three construction companies that were trying to foreclose on the uncompleted and mothballed Shops at Summerlin Centre regional shopping mall.

Construction manager Vratsinas Construction Co. of Little Rock, Ark., filed a motion in December in Chicago-based mall owner General Growth Properties Inc.'s bankruptcy case, asking for permission to foreclose on liens against the Las Vegas project valued at $28.3 million.

Also intervening in the bankruptcy case in hopes of getting paid were subcontractors Precision Concrete of North Las Vegas, owed $2.8 million; and Clark Pacific of Sacramento, owed $2.4 million.

Court papers filed this week show General Growth has agreed to pay the contractors as some of its subsidiaries emerge from bankruptcy.

Vratsinas settled its claim for $26.9 million.

It is to receive monthly payments of $1.5 million until its claim is satisfied with confirmation of the Summerlin debtor's reorganization plan -- or until $16.2 million is paid off. At that time the parties would negotiate a final payment settlement.

Vratsinas also agreed to satisfy all liens or claims of its subcontractors.

Court records show Clark Pacific settled its claim for $2.35 million and Precision Concrete will receive its $2.8 million, with both claims to be paid once the Summerlin bankruptcy reorganization plan is approved.

In the December court papers, attorneys for Vratsinas said construction was about 40 percent complete when work was suspended Oct. 31, 2008, on the 106-acre open-air mixed-use development that would include retail, office, hospitality and residential components.

The project is just south of the Red Rock Resort hotel-casino along the Las Vegas Beltway, south of Charleston Boulevard.

The development is valued on paper at $220 million -- but the recession has likely reduced its worth as currently there's little demand for another Las Vegas regional shopping mall.

General Growth attorneys noted in this week's filing that the unfinished project is worth more than the Vratsinas liens asserted against it.

"The debtors continue to assess all options for the Summerlin Centre project, including completion, sale or other disposition," General Growth said in this week's settlement document.