Worthington’s loss is KOP’s gain

L.L. Bean won’t be setting up shop in Uptown Worthington. It will be opening in the King of Prussia Plaza in September instead.

Upscale theater company Muvico is no long under agreement with O’Neill Properties Group, the developer of the 100-acre mixed use community at routes 202 and 29.

Much of the multimillion-dollar Uptown Worthington mixed-use project came to a halt when the project’s developer filed suit against its lender, Citizens Bank of Pennsylvania, seeking $8 billion in damages and claiming the bank reneged on some of its loans.

The suit was filed in early 2010 by J. Brian O’Neill on behalf of O’Neill Properties Group of King of Prussia.

By last summer, that amount had dropped to $297 million.

The company is “working diligently to resolve” the lawsuit, said Steve Forster, director of public finance and government resources at O’Neill Properties of King of Prussia.

Once the lawsuit is resolved, “we will re-energize our outreach to the retail community,” Forster said, adding that the project will still be mixed-use but with a slightly different emphasis.

Originally, the $700 million, 1.6-million-square-foot, mixed-use project included 753 luxury residences merged into a 500,000-square-foot town center and Class A office space.

For the developer, the delay from the lawsuit may not be all bad.

While lawyers filed briefs, the Pennsylvania Turnpike broke ground this spring for its long-anticipated Route 29 E-ZPass-only ramp, which will give Great Valley’s corporate community, including Uptown Worthington, direct access to the turnpike.

The $48 million turnpike project is expected to be completed by the fall of 2012.

Meanwhile, the widening of Route 202 Section 300 from King of Prussia to Exton Bypass, got under way. Completion of the 6.5-mile, $187 million widening project that will take that section of highway from four lanes to six is scheduled for 2015.

The timing is not lost on the marketing department at O’Neill.

Both “will encourage development of the site,” Forster said. “Retail wants to expand its trade area as much as possible. This will relieve congestion on roads and give greater access to the site.”

Thus far, two retailers are doing business at Uptown Worthington, Wegmans Food Markets and Target, happy campers both.

“We are very, very pleased with that location,” said Wegmans spokeswoman Jo Natale in a phone interview from the supermarket chain’s Rochester, N.Y., headquarters. “It well exceeded our projections.”

Wegmans Malvern includes a pub, the second store in the chain to have that amenity. The first was Wegmans Collegeville.

“It is a destination for many customers,” Natale said about the pub in the 130,000-square-foot Malvern store that employs 614 people. “It is always busy and we’re getting good feedback from customers. We’re thrilled.”

In the region, Wegmans has stores in East Caln and Colle

geville with a 130,000-square-foot store planned to open in King of Prussia in 2012. It will employ about 600 people, Natale said.

“With 12 stores and a distribution center in Pottsville, we are a very large employer in Pennsylvania,” Natale said.

Target was asked for a comment, as well.

The Minneapolis-based retail chain e-mailed the following statement: “Target is pleased that our guests in Malvern are excited about Target’s unique and differentiated shopping experience. We look forward to continuing our reputation as a good neighbor in the local community for many years to come.”

O’Neill’s Forester said Target has about 150 employees.

As for the rest of the project, it is on hold.

“L.L. Bean has canceled plans to open a store in Malvern,” said Laurie Brooks, senior public relations representative at the retailer.

“We have instead focused our efforts on the King of Prussia store.”

Brooks said no additional stores are planned for Pennsylvania in the near term. L.L. Bean has two additional stores in Pennsylvania: Center Valley and Pittsburgh.

L.L. Bean’s 15,000-square-foot King of Prussia store is slated to open in September.

Mary Ann Majni at Muvico said the deal to build a Muvico at Uptown Worthington was “terminated by mutual agreement” in April.

Majni said the company would not comment further.

Lawyers for both parties did not return phone calls seeking comment.

Meanwhile, in late May, Firstrust Bank secured a $5.56 million judgment against O’Neill personally as well as against Washington Street Associates III LP, an entity affiliated with O’Neill Properties Group.

The judgment was entered in Montgomery County Court on May 31 after O’Neill defaulted on a loan and a forbearance agreement worked out between the developer and the bank, according to court documents.

The agreement laid out a payment schedule on the two loans as well as for additional security on the loans. For that, O’Neill personally “unconditionally guaranteed” payment of the loans, interest and other fees associated with the loans, according to the agreement filed in court.

In mid-June, O’Neill announced plans to enter the North Jersey/New York market with The Point, 8 million square feet of waterfront development in Sayreville, N.J., about 30 miles from Manhattan.

The $2.9 billion project includes shopping, offices, hotels and high-end housing.

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