Developer Plans Hotel at St. Louis Mills Mall

By: Norm Parish: St. Louis Post-Dispatch // January 10, 2008

HAZELWOOD, MO --- A Chicago area developer plans to break ground this spring on the first hotel near St. Louis Mills Mall.

The hotel's developer says its plans won't be affected by serious financial problems reported Tuesday at the mall's owner.

The hotel ? a project Hazelwood officials have long awaited ? would be part of a proposed $50 million complex called Crescent Pointe at the Mills, which includes 80,000 square feet of retail space.

The site, which is near the Mills shopping center, has proved attractive for development. Sporting goods retailer Cabela's is planning to open there this spring.

"Cabela's is just a huge draw," said Alex Dmyterko, a principal with Dmyterko & Wright Partners, the developer for the project.

Hazelwood Mayor T.R. Carr said the hotel would make the Mills and Cabela's "a destination in the region."

Carr said city officials have wanted a hotel near the Mills since it first opened in 2003.

Bloomberg News reported Tuesday that Mills Corp., which owns St. Louis Mills and 37 other malls, may be forced into bankruptcy.

Bloomberg reported that executive misconduct and accounting errors resulted in almost four years of earnings restatements. Mills shares fell 22 percent, the most since August.

Mills, which is seeking a buyer, will restate results for 2001 to 2004 and for the first three quarters of 2005 and expects the errors to cost as much as $354 million. The company may seek bankruptcy protection if it can't repay a $1.1 billion loan, Mills said Tuesday in a regulatory filing.

The company lost more than half of its market value in the last year as its 104-acre Xanadu project in New Jersey's Meadowlands went over budget, and it delayed earnings amid a Securities and Exchange Commission investigation. Chief Executive Mark Ordan, who replaced Laurence Siegel on Oct. 1, said resolution of the investigation was the final hurdle to a sale.

The errors were "caused by possible misconduct by former accounting and asset management personnel of the company," Mills said. The company was "heavily focused on meeting external and internal financial expectations" and didn't have adequate accounting policies and controls, the filing said.

More than a dozen top executives have left Mills in the last two years.

The $250 million St. Louis Mills opened as the first new mall in the region in 16 years.

The parent company's problems will not affect hotel plans for the Hazelwood site, Dmyterko said.

Last month, Dmyterko & Wright Partners, based in Oak Brook, Ill., purchased the 18-acre tract near Highway 370 for $6 million from Collins Goodman Development in Atlanta, which had worked with another developer on a planned hotel and retail project at the site that did not get built.

Dmyterko hopes the new project is completed by the end of 2008.

It will include a 150- to 250-room hotel. Dmyterko would not name the prospective operator of the hotel. The development also would have 20 to 30 stores as well as three to five restaurants.

BLOOMBERG NEWS CONTRIBUTED TO THIS REPORT.