Annual report pursuant to Section 13 and 15(d)

Development of Consolidated Rental Properties

v3.3.1.900
Development of Consolidated Rental Properties
12 Months Ended
Dec. 31, 2015
Real Estate [Abstract]  
Development of Consolidated Rental Properties
Development of Consolidated Rental Properties

Foxwoods

In May 2015, we opened an approximately 312,000 square foot outlet center at the Foxwoods Resort Casino in Mashantucket, Connecticut. We own a controlling interest in the joint venture which is consolidated for financial reporting purposes. As of December 31, 2015, our partner’s equity contributions totaled approximately $1.0 million and our equity contributions totaled approximately $58.8 million. Contributions we make in excess of $40.0 million earn a preferred rate of return of 15% from the date of contribution. In addition, each partner earns a rate of return of 10% on their initial capital contributions from the date of contribution. Under the terms of the joint venture's operating agreement, upon liquidation, we would receive all of our unreturned contributions and all unpaid returns earned on those contributions prior to any distributions being made to our partner. Accordingly, we expect our current economic interest in the venture's cash flow to be greater than our legal ownership percentage of 67%. As of December 31, 2015, based upon the liquidation proceeds we would receive from a hypothetical liquidation of our investment based on depreciated book value, our economic interest would represent substantially all of the economic benefit of the property. Our economic interest may fluctuate based on a number of factors, including mortgage financing, partnership capital contributions and distributions, and proceeds from asset sales.

Grand Rapids

In July 2015, we opened an approximately 352,000 square foot wholly-owned outlet center near Grand Rapids, Michigan. The outlet center is located 11 miles south of downtown Grand Rapids at the southwest quadrant of US-131 and 84th Street in Byron Township, Michigan, with visibility from both roads.

Southaven

In November 2015, we opened an approximately 320,000 square foot outlet center in Southaven, Mississippi. In January 2015, we purchased land for approximately $14.8 million and commenced construction on the development of Tanger Outlets Southaven, which is located less than five miles south of Memphis, Tennessee. We own a controlling interest in the joint venture which is consolidated for financial reporting purposes. As of December 31, 2015, our partner’s equity contributions totaled approximately $461,000 and our equity contributions totaled approximately $26.5 million. From the date our equity contributions are made, we earn a preferred rate of return of 10% for senior contributions and 14% for junior contributions. As of December 31, 2015, the balance of our senior contributions was $17.7 million and our junior contributions was $8.3 million.

Under the terms of the joint venture's operating agreement, upon liquidation, we would receive all of our unreturned contributions and all unpaid returns earned on those contributions prior to any distributions being made to our partner. Accordingly, we expect our current economic interest in the venture's cash flow to be greater than our legal ownership percentage of 50%. As of December 31, 2015, based upon the liquidation proceeds we would receive from a hypothetical liquidation of our investment based on depreciated book value, our economic interest would represent substantially all of the economic benefit of the property. Our economic interest may fluctuate based on a number of factors, including mortgage financing, partnership capital contributions and distributions, and proceeds from asset sales.

The table below sets forth our consolidated outlet centers under development of December 31, 2015:
Project
Approximate square feet
(in 000's)
Costs Incurred to Date
(in millions)
Borrowed to date
(in millions)
Projected Opening
Daytona Beach
352

$
17.3


Holiday 2016


Daytona Beach

In November 2015, we purchased land for approximately $9.9 million and commenced construction on the development of a wholly owned outlet center in Daytona Beach, Florida. The outlet center is expected to be approximately 352,000 square feet and to open by Holiday 2016.