BY ELENI HIMARAS
reporter@ltview.com
As the auction deadline passed in the Hill Country Galleria foreclosure May 5, Opus West filed for Chapter 11 bankruptcy to prevent the project’s sale. As with the foreclosure, this will not affect day-to-day operations of the mall’s tenants.

 “What this enables us to do is to hold the asset longer while we continue to work with the lenders on the loan and not have it go to auction,” Opus Corporation spokesperson Winston Hewett said Tuesday morning. “This is really the only option for us. It allows us to negotiate with them and maximize value in an orderly fashion.”
The U.S. Bankruptcy Court ruled on Opus’ petition on Wednesday, May 6, after the paper went to press. If the court accepted the petition, the Galleria will have at least 120 days to come up with a restructuring plan that would allow its continued operation. As with most Chapter 11 filings, the Hill Country Galleria has filed several emergency motions asking to court to allow it to conduct business as usual while owners create a restructuring plan. That plan would have to be approved by a majority of its creditors, which include all of its tenants and the City of Bee Cave. The court may grant an extension of that deadline up to 18 months.
“With the protections afforded by bankruptcy law, we hope to complete a successful restructuring of the project’s debt on terms that will allow us to optimize value for the project’s lenders and other creditors,” said John Greer, executive vice president, Opus West Corporation.
The foreclosure occurred as the company had been attempting to refinance its $191 million construction loan that matured earlier this year. According to Hewett, there are 10 different lenders on that loan, which she said has been making negations more complicated.
According to the recently filed petition for bankruptcy, the main lender on the loan is Bank of America, N.A., a national banking association. As with most Chapter 11 filings, the Hill Country Galleria has filed several emergency motions asking the court to allow them to conduct business as usual while they create a restructuring plan.
“Currently the project is more than 70 percent leased and until earlier this year when the construction loan had matured, the project experienced a positive cash flow and all debt obligations were met,” Hewett said in April when the foreclosure was announced.
Bee Cave City Administrator Frank Salvato supported the notion that the Galleria was doing well, saying that sales tax from the project had increased 39 percent over this time last year. This is largely due to the project filling vacant tenant spaces.
The Bee Cave City Hall, which sits on the property, is owned by the city, not the developer. The only business tie the city has to the project is the 380 Agreement, which promises the Galleria a portion of its sales tax back as an economic incentive.
Salvato said he did not yet know how the bankruptcy filing would affect that agreement.
For now, he said, “it’s business as usual.”
According to the bankruptcy petition, about 74 percent of the project is owned by Opus West and a related company, OWC Hill Country, Inc.; 16.4 percent by the landowner, Baldwin Properties, Ltd.; 6.5 percent by Lincoln Galleria Holdings; and 3.2 percent by Milam Galleria Holdings.
Check next week’s Lake Travis View and www.laketravisview.com for updates on this story as they develop.