Contact:
Doug Hill, COO-McWhinney
970-962-9990

Shoppers and Business Won't See Any Changes From Foreclosure Proceedings

LOVELAND, CO. – NOVEMBER 17, 2009 – Although lenders of the highly successful Promenade Shops at Centerra today placed Promenade Shops into foreclosure, the retail center remains open and it’s business as usual. Shoppers and the 60+ businesses at the 700,000‐square‐foot lifestyle center in Loveland, CO, should not experience any adverse impact from the foreclosure actions.

“There’s no reason to expect any change in day‐to‐day operations of the specialty shops, restaurants, entertainment venues and other amenities at Promenade Shops,” said Doug Hill, chief operating officer of McWhinney.

The lenders placed Promenade Shops in foreclosure due to the inability of the lender and the ownership entity, managed by Poag & McEwen, to reach an agreement to extend or refinance the current loan, which matured.

“It’s definitely not because of poor sales performance at Promenade Shops or missed loan payments,” Hill said. “The Promenade Shops have been – and will continue to be ‐‐ the region’s leading retail center infusing millions of dollars into the local economy each year.”

Poag & McEwen is a nationwide lifestyle center developer headquartered in Tennessee that serves as sole manager of Promenade Shops. Since 2004, when Promenade Shops opened, Poag & McEwen has been responsible for all day‐to‐day management decisions. The company also oversees financial issues pertaining to Promenade Shops’ operation, hiring and firing, landscaping and amenities.

A McWhinney affiliate is a passive equity investor that provided the land on which Promenade Shops is built.

Hill added that the lender’s action will not have any directly foreseeable impact on the Master Financing Agreement between Centerra and the City of Loveland. The lender’s actions also will not impact the regional improvements at I‐25 and Crossroads Boulevard, and I‐25 and Highway 34. Those projects continue as planned.

“We believe the nationwide tightening of the credit markets caused by the global financial crisis is one of the participating factors in the foreclosure by the lender,” Hill said.

The foreclosure occurred after the lender – a group of banks led by Key Bank – couldn’t reach agreement with a limited liability company managed by Poag & McEwen on a deal to extend or refinance the fully matured construction loan. Originally issued in 2004, the current $112 million construction loan came due this year.

“In years past, we believe this would have easily gone to the next round of financing because Promenade Shops performs well,” Hill said. “But the credit market has largely dried up. The financial crisis has completely changed today’s banking and long‐term real estate financing environment.“

He said it is likely that in the coming months, the current lenders will place Promenade Shops on the market, similar to how banks sell other foreclosed properties.

McWhinney and Centerra Remain Financially Solid

Hill said that the 3,000‐acre Centerra master‐planned community in Loveland, home to Promenade Shops and other regional draws such as Medical Center of the Rockies, The Marketplace at Centerra, residential neighborhoods and hundreds of other businesses, remains financially solid.

In addition, McWhinney, developer of the Centerra master‐planned community and several other properties in Colorado and California, is very healthy and is not directly impacted by the foreclosure proceedings on Promenade Shops.

“Although unfortunate, the foreclosure in no way impacts Centerra’s or McWhinney’s financial condition. We have a variety of development types from which we generate revenue – retail, office, manufacturing, medical, residential, multi‐family and more,” Hill said. “Most importantly, our conservative business approach means we have a strong balance sheet, emphasized by the fact that we eliminated the refinancing risks experienced by Promenade Shops by placing long‐term, 20‐ to 30‐year, permanent financing on most of our operating properties.”

For more information, call 970-962-9990.

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