Developer displeased by direction of Mills Corp.

Prominent westside developer Greg Stevinson is watching the recent firing of Mills Corp. President Mark Ettenger with more than a passing interest.

Stevinson said he's displeased with the performance of the company he partnered with in 2000 to build the Colorado Mills shopping center in Lakewood.

He blames Mills Corp. leadership for failing to maintain its mission and says more heads should roll.

The 2.1 million-square-foot mall, which opened in November 2002, has never reached the level of success that Stevinson had hoped for, given that he labored about a dozen years to create a quality development on land that had been in the Stevinson family for many years.

Mills Corp. nationally has seen major changes in executive management during the past several months. It's been the subject of an SEC investigation and as recently as last week began selling off some of its assets.

"In my opinion, they need for [CEO] Larry Siegel to leave for the betterment of the company," said Stevinson, who partnered with the Mills Corp. (NYSE: MLS) beginning in 2000. "But we're just limited partners. We have no say in the Colorado Mills organization."

That hasn't stopped Stevinson from telling some of the Mills' board members what he really thinks, though he's quick to add, "I can express my opinion all I want, but I have no control."

Stevinson blames Siegel for a spending spree that acquired dozens of properties in the last couple of years that were far removed from the concept the once-small retail developer introduced in the 1990s. Meanwhile, malls such as Colorado Mills have suffered from declining traffic and increased vacancies.

"They don't know what they are or who they are," Stevinson said about the Mills Corp. "They used to be an outlet center with a huge regional draw," he said, describing Mills Corp.'s original mall concept. "They had Bass Pro shops and IMAX theaters that brought people in. That's what it was when we started with them."

The fortunes of the once-robust retail specialty developer fell dramatically the past year. Stocks were trading at nearly $60 a share in 2005. But on Aug. 23, Mills' stock was trading at a dismal $18 a share, and speculation is rampant that the company, which owns 42 properties, is up for sale.

David Douglass, a spokesman for the Mills Corp, declined comment about recent developments at the Arlington, Va.-based firm.

The company is restating financial reports for years 2000 through 2005 because of accounting errors. According to a recent SEC filing, net income for years 2003, 2004 and the first three quarters of 2005 will be reduced by $210 million.

In other SEC documents filed last week, Mills also reported that former Chief Operating Officer Kenneth Parent had been terminated in April and James Napoli, executive vice president of leasing, would be leaving in October. The company further noted that it was selling the Vaughan Mills in Vaughan, Ontario, Canada; the St. Enoch Centre in Glasgow, Scotland; and Madrid Xanadu in Spain to Ivanhoe Cambridge Inc. for a reported $981 million.

"Because of the SEC involvement, you can't tell what's going on, but I'm hearing rumors," Stevinson said.

The company could sell its portfolio in one piece or in chunks. Or it could bring in completely new management, industry insiders said.

"Once they get those financials in order, we'll know more of the value, and I do think there's value in the company," Stevinson said.

Kimra Perkins, Colorado Mills' general manager, acknowledged that rumors are rife.

"The not knowing is the hardest part. We don't know what's going to happen," said Perkins, quickly noting that Banana Republic is opening a factory outlet store in September.

"And it's only 12 weeks until Santa arrives."

Meanwhile, Lakewood City Manager Mike Rock said he's scheduled a meeting in three weeks with Mills executives to talk about the former Stevinson Chevrolet dealership that has remained vacant for months at the intersection of West Colfax Avenue and Indiana Street northwest of the main mall.

The property was acquired by the Mills for future expansion after Greg's brother Kent moved the dealership across the street, but so far nothing has happened. Rock said they better have a comprehensive, top-quality plan "or we won't be enthused about what they're doing."

Stevinson was especially critical of what he perceived as lagging efforts to fully build out the Colorado Mills project and to demolish the vacant car dealership.

"It's an eyesore," he said. "It's an embarrassment."

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