General Growth said today that the purchase price is about $250 million and includes assumption of about $50 million in short-term debt.

General Growth Properties Inc. won approval of the tentative deal from Victoria Ward’s board of directors over the weekend. Details and terms of the tentative deal have not been disclosed.

The sale, one of the largest of a company or property in Hawai‘i in the past few years, gives General Growth control of two of the state’s largest retail centers. The Victoria Ward retail complex, with a 16-screen theater and 140 retailers and restaurants, is O‘ahu’s third-largest after Ala Moana and Pearlridge centers.

“This is a huge deal for General Growth,” said Matt Ostrower, an analyst with Morgan Stanley in New York. “Ala Moana is the dominant mall in Hawai‘i, and I think that General Growth thinks it has, at the moment, a monopoly on retail shopping in Hawai‘i. Their goal is to make sure nothing competes in those islands with Ala Moana. They’re sort of protecting their franchise.”

General Growth, a $2.8 billion Chicago-based real estate investment trust, owns or manages more than 140 malls in 39 states, and was one of the most active buyers of malls in the 1990s. The purchase gives General Growth control of about 2.4 million square feet of retail space on O‘ahu — about 1.8 million at Ala Moana and an additional 600,000 at Victoria Ward.

The deal comes two days after General Growth made a last-minute offer that topped an offer by Honolulu firm Alexander & Baldwin Inc., which had been the front-runner in the acquisition talks for Victoria Ward’s entire estate, including Ward Entertainment Centre, Ward Centre and Ward Warehouse.

An Alexander & Baldwin spokeswoman declined comment today.

If completed, the purchase would be the second time A&B has lost out to General Growth in the acquisition of a local shopping center.

In 1999, A&B tried to buy Ala Moana in partnership with Simon Property Group, the nat

ion’s largest shopping mall operator, but the roughly $800 million bid lost to an $810 million offer by General Growth.
Several local real estate analysts had concluded that this time around A&B was better suited to acquire Victoria Ward because of its history of owning and developing retail, office and residential real estate in Hawai‘i.

But General Growth, according to analysts, had a strong incentive to buy Ala Moana’s nearby rival, because Victoria Ward has been drawing an increasing number of shoppers in recent years and has plans to add a Nordstrom-anchored 550,000-square-foot mall in 2005.

Morgan Stanley’s Ostrower said he believes General Growth will go ahead with plans to add the Nordstrom department store, and possibly find partners to buy or redevelop roughly 30 percent of Ward’s nonretail property.

The deal still must be approved by Victoria Ward shareholders, including a family trust that is majority shareholder and is administered by Bank of Hawaii. A bank representative said it is company policy not to discuss trust clients.

If the sale is approved, it will end more than 130 years of ownership by descendants of Victoria Robinson and Curtis Ward, who once lived on an estate, Old Plantation, where Blaisdell Center is today.

The estate, incorporated in 1930 as a closely held private company, is controlled by about 35 shareholders, including members of the local Hustace family related to the Wards.

Some observers have said several shareholders are aging and have been interested in cashing out after years of modest earnings.

The estate was long a mostly industrial mix of property converted over the decades to more of a retail mix that crystallized in the early 1990s with additions such as Pier 1 Imports, Ross, Office Depot, Sports Authority and Nordstrom Rack.

The vision of an urban retail village was taken to another level last year when the Ward Entertainment Centre opened with a 16-screen theater, Dave & Buster’s and several new restaurants and shops.

Victoria Ward last year announced a plan to replace Ward Warehouse with a 550,000-square-foot center that would include a 150,000-square-foot Nordstrom department store.

Ward’s master plan also includes residential high-rises, a supermarket, more parking and street realignment.