Opus bankruptcy won’t affect Chandler plaza - East Valley Tribune: News

Opus bankruptcy won’t affect Chandler plaza

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Posted: Wednesday, July 8, 2009 3:26 pm | Updated: 3:04 am, Sat Oct 8, 2011.

A J.C. Penney-anchored shopping plaza under development in south Chandler will be completed even if the developer folds, a spokeswoman for Opus Corp. said this week.

And Phoenix-based Opus West's demise is likely, said Winston Hewett, spokeswoman for the Minnesota-based parent company.

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Opus West filed for Chapter 11 bankruptcy in Texas on Monday, Hewett said. The filing includes Opus West Corp., Opus West Construction and three subsidiaries, she said.

But Mill Crossing, a 170,000-square-foot, open-air shopping center under development on the southwest corner of Germann and Gilbert roads, is 100 percent leased and will be completed as planned, she said. J.C. Penney is scheduled to open in the fall, Hewett said.

Mill Crossing is being developed by Opus West with financing by JPMorgan Chase and WaMu - Opus West's partners in the retail center, she said. As with other assets, the partners have a say in what happens with the project.

"Our goal is to wind down operations and continue to work with partners and lenders on the assets in the portfolio," Hewett said. "Lenders want to see projects work out, and this is a healthy retail project."

As for Opus West, Hewett said it is expected to cease operations when other under-development projects are completed or partners or lenders put a halt to them.

When the economy recovers, another subsidiary of Opus Corp. could return to the Valley, she said.

Opus West, which has been a major real estate developer of medium-to-large commercial projects around the Valley since 1979, has not begun any new projects for the last 18 months, Hewett said.

In announcing Opus West's filing, Opus Corp. CEO Mark Rauenhorst said that the challenges in the commercial development industry are "as difficult as the company has ever experienced in its 56 years in the business" but business conditions vary considerably by region of the country.

"Opus West faced particularly dramatic drops in real estate values in markets such as California and Arizona, and has been particularly challenged by the sharp downturn in the capital markets and availability of refinancing," Rauenhorst said in a prepared statement.

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