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CHEVY CHASE, MD-Laurence Siegel has retired as CEO of the embattled Mills Corp., replaced by Mark Ordan, who has been the company's COO since March. Siegel has been appointed non-executive chairman of the board of Mills and is likely to join the new joint venture expected to form if or when Mills is able to close on the Meadowlands Xanadu transaction.
Ordan joined Mills as a long-time board member and past chairman of Federal Realty Investment Trust. He will resign from the Federal Realty Investment Trust as he assumes his new position at Mills. "Mark has helped strengthen our operations since March and the company will continue to benefit from his leadership as it pursues the previously announced strategic alternatives process," Siegel said in a statement.
The management change comes as little surprise to the Street since Ordan's appointment as COO was seen as the precursor to assuming the CEO role, according to a research note by Banc of America Securities' analyst Ross Nussbaum in New York City. That said, he added that Siegel's resignation agreement could pose a conflict of interest since he is entitled to receive a lump-sum payment of $10.5 million if the company is sold on or prior to Dec. 31, 2007 "because it could lead him into voting for a sale at a lower price than if he were receiving a stock payment."
More troublesome is the delay in closing the Colony/Meadowlands deal, Nussbaum also wrote, which is now almost a week overdue. "If the deal falls apart, Mills' shares are likely to come under pressure, as the company would once again be burdened by the funding needs of this ill-fortuned project," Nussbaum concluded. Nussbaum was not available for comment.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
