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Investments in Unconsolidated Joint Ventures: | 12 Months Ended
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Dec. 31, 2011
Investments in Unconsolidated Joint Ventures: |
Investments in Unconsolidated Joint Ventures: |
4. Investments in Unconsolidated Joint Ventures: The following are the Company's investments in various joint ventures or properties jointly owned with third parties. The Company's interest in each joint venture as of December 31, 2011 is as follows:
Joint Venture |  | Ownership %(1) |
--- | --- | --- | ---
Biltmore Shopping Center Partners LLC |  |  | 50.0 | %
Camelback Colonnade Associates LP |  |  | 75.0 | %
Chandler Gateway Partners, LLC |  |  | 50.0 | %
Chandler Village Center, LLC |  |  | 50.0 | %
Coolidge Holding LLC |  |  | 37.5 | %
Corte Madera Village, LLC |  |  | 50.1 | %
East Mesa Mall, L.L.C.—Superstition Springs Center |  |  | 66.7 | %
FlatIron Property Holding, L.L.C.—FlatIron Crossing |  |  | 25.0 | %
Jaren Associates #4 |  |  | 12.5 | %
Kierland Commons Investment LLC |  |  | 50.0 | %
Kierland Tower Lofts, LLC |  |  | 15.0 | %
La Sandia Santa Monica LLC |  |  | 50.0 | %
Macerich Northwestern Associates—Broadway Plaza |  |  | 50.0 | %
MetroRising AMS Holding LLC |  |  | 15.0 | %
New River Associates—Arrowhead Towne Center |  |  | 66.7 | %
Norcino Santa Monica LLC |  |  | 50.0 | %
North Bridge Chicago LLC |  |  | 50.0 | %
NorthPark Land Partners, LP |  |  | 50.0 | %
NorthPark Partners, LP |  |  | 50.0 | %
One Scottsdale Investors LLC |  |  | 50.0 | %
Pacific Premier Retail LP |  |  | 51.0 | %
Propcor Associates |  |  | 25.0 | %
Propcor II Associates, LLC—Boulevard Shops |  |  | 50.0 | %
Primi Santa Monica LLC |  |  | 50.0 | %
SanTan Festival, LLC—Chandler Festival |  |  | 50.0 | %
SanTan Village Phase 2 LLC |  |  | 34.9 | %
SDG Macerich Properties, L.P. |  |  | 50.0 | %
Queens Mall Limited Partnership |  |  | 51.0 | %
Queens Mall Expansion Limited Partnership |  |  | 51.0 | %
Scottsdale Fashion Square Partnership |  |  | 50.0 | %
The Market at Estrella Falls LLC |  |  | 39.7 | %
Tysons Corner LLC |  |  | 50.0 | %
Tysons Corner Property Holdings II LLC |  |  | 50.0 | %
Tysons Corner Property LLC |  |  | 50.0 | %
WM Inland LP |  |  | 50.0 | %
West Acres Development, LLP |  |  | 19.0 | %
Westcor/Gilbert, L.L.C. |  |  | 50.0 | %
Westcor/Queen Creek LLC |  |  | 37.8 | %
Westcor/Surprise Auto Park LLC |  |  | 33.3 | %
Wilshire Building—Tenants in Common |  |  | 30.0 | %
WMAP, L.L.C.—Atlas Park |  |  | 50.0 | %
WM Ridgmar, L.P. |  |  | 50.0 | %
Zengo Restaurant Santa Monica LLC |  |  | 50.0 | %
(1) The Operating Partnership's ownership interest in this table reflects its legal ownership interest but may not reflect its economic interest since each joint venture has specific terms regarding cash flow, profits and losses, allocations, capital requirements and other matters. The Company has recently made the following investments and dispositions in unconsolidated joint ventures: On July 30, 2009, the Company sold a 49% ownership interest in Queens Center to a third party for $152,654, resulting in a gain on sale of assets of $154,156 (See Note 6—Property.) The Company used the proceeds from the sale of the ownership interest in the property to pay down the $450,000 term loan (See "Term Loans" in Note 11—Bank and Other Notes Payable) and for general corporate purposes. The results of Queens Center are included below for the period subsequent to the sale of the ownership interest. On September 3, 2009, the Company formed a joint venture with a third party whereby the Company sold a 75% interest in FlatIron Crossing. As part of this transaction, the Company issued three warrants for an aggregate of 1,250,000 shares of common stock of the Company (See Note 15—Stockholders' Equity). The Company received $123,750 in cash proceeds for the overall transaction, of which $8,068 was attributed to the warrants. The proceeds attributable to the interest sold exceeded the Company's carrying value in the interest sold by $28,720. However, due to certain contractual rights afforded to the buyer of the interest in FlatIron Crossing, the Company has only recognized a gain on sale of $2,506 (See Note 6—Property). The remaining net cash proceeds in excess of the Company's carrying value in the interest sold of $26,214 has been included in other accrued liabilities and will not be recognized until dissolution of the joint venture or disposition of the Company's or buyer's interest in the joint venture. The Company used the proceeds from the sale of the ownership interest to pay down the $450,000 term loan and for general corporate purposes. The results of FlatIron Crossing are included below for the period subsequent to the sale of the ownership interest. On February 24, 2011, the Company's joint venture in Kierland Commons, a 434,642 square foot community center in Scottsdale, Arizona, acquired the ownership interest of another partner in the joint venture for $105,550. The Company's share of the purchase price consisted of a cash payment of $34,161 and the assumption of a pro rata share of debt of $18,613. As a result of the acquisition, the Company's ownership interest in Kierland Commons increased from 24.5% to 50%. The joint venture recognized a remeasurement gain of $25,019 on the acquisition based on the difference of the fair value received and its previously held investment in Kierland Commons. The Company's pro rata share of the gain recognized was $12,510. On February 28, 2011, the Company in a 50/50 joint venture acquired The Shops at Atlas Park, a 377,924 square foot community center in Queens, New York, for a total purchase price of $53,750. The Company's share of the purchase price was $26,875. The results of The Shops at Atlas Park are included below for the period subsequent to the acquisition. On February 28, 2011, the Company acquired the additional 50% ownership interest in Desert Sky Mall, an 893,863 square foot regional shopping center in Phoenix, Arizona, that it did not own for $27,625. The purchase price was funded by a cash payment of $1,875 and the assumption of the third party's pro rata share of the mortgage note payable on the property of $25,750. Concurrent with the purchase of the partnership interest, the Company paid off the $51,500 loan on the property. Prior to the acquisition, the Company had accounted for its investment in Desert Sky Mall under the equity method. Since the date of acquisition, the Company has included Desert Sky Mall in its consolidated financial statements (See Note 16—Acquisitions). On April 1, 2011, the Company's joint venture in SDG Macerich Properties, L.P. ("SDG Macerich") conveyed Granite Run Mall to the mortgage note lender with a deed-in-lieu of foreclosure. The mortgage note was non-recourse. The Company's pro rata share of gain on the early extinguishment of debt was $7,753. On June 3, 2011, the Company entered into a transaction with General Growth Properties, Inc. ("General Growth"), whereby the Company acquired an additional 33.3% ownership interest in Arrowhead Towne Center, an additional 33.3% ownership interest in Superstition Springs Center, and an additional 50% ownership interest in the land under Superstition Springs Center ("Superstition Springs Land") that it did not own in exchange for six anchor locations, including five former Mervyn's stores (See Note 17—Discontinued Operations) and a cash payment of $75,000. As a result of this transaction, the Company now owns a 66.7% ownership interest in Arrowhead Towne Center, a 66.7% ownership interest in Superstition Springs Center and a 100% ownership interest in Superstition Springs Land. Although the Company had a 66.7% ownership interest in Arrowhead Towne Center and Superstition Springs Center upon completion of the transaction, the Company does not have a controlling financial interest in these joint ventures due to the substantive participation rights of the outside partner and, therefore, continues to account for its investments in these joint ventures under the equity method of accounting. Accordingly, no remeasurement gain was recorded on the increase in ownership. The Company has consolidated its investment in Superstition Springs Land since the date of acquisition (See Note 16—Acquisitions) and has recorded a remeasurement gain of $1,734 (See Note 6—Property) as a result of the increase in ownership. This transaction is referred herein as the "GGP Exchange". On December 31, 2011, the Company and its joint venture partner reached agreement for the distribution and conveyance of interests in SDG Macerich that owned 11 regional shopping centers in a 50/50 partnership. Six of the eleven assets were distributed to the Company on December 31, 2011. The Company received 100% ownership of Eastland Mall in Evansville, Indiana, Lake Square Mall in Leesburg, Florida, SouthPark Mall in Moline, Illinois, Southridge Mall in Des Moines, Iowa, NorthPark Mall in Davenport, Iowa and Valley Mall in Harrisonburg, Virginia (collectively referred to herein as the "SDG Acquisition Properties"). The ownership interests in the remaining five regional malls were distributed to the outside partner. The remaining net assets of SDG Macerich will be distributed during the year ended December 31, 2012. The SDG Acquisition Properties were recorded at fair value at the date of transfer, which resulted in a gain of $188,264, which is included in equity in income of unconsolidated joint ventures, based on the fair value of the assets acquired and the liabilities assumed in excess of the book value of the Company's interest in SDG Macerich. The distribution and conveyance of the 11 regional shopping centers is referred to herein as the "SDG Transaction". Prior to the SDG Transaction, the Company accounted for its investment in the SDG Acquisition Properties under the equity method of accounting. Since the date of distribution and conveyance, the Company has included the SDG Acquisition Properties in its consolidated financial statements (See Note 16—Acquisitions). Combined and condensed balance sheets and statements of operations are presented below for all unconsolidated joint ventures. Combined and Condensed Balance Sheets of Unconsolidated Joint Ventures as of December 31:
|  | 2011 |  | 2010 |
--- | --- | --- | --- | --- | ---
Assets(1): |  |  |  |  |  |  |
Properties, net |  | $ | 4,328,953 |  | $ | 5,047,022 |
Other assets |  |  | 469,039 |  |  | 470,922 |
Total assets |  | $ | 4,797,992 |  | $ | 5,517,944 |
Liabilities and partners' capital(1): |  |  |  |  |  |  |
Mortgage notes payable(2) |  | $ | 3,896,418 |  | $ | 4,617,127 |
Other liabilities |  |  | 161,827 |  |  | 211,942 |
Company's capital |  |  | 327,461 |  |  | 349,175 |
Outside partners' capital |  |  | 412,286 |  |  | 339,700 |
Total liabilities and partners' capital |  | $ | 4,797,992 |  | $ | 5,517,944 |
Investment in unconsolidated joint ventures: |  |  |  |  |  |  |
Company's capital |  | $ | 327,461 |  | $ | 349,175 |
Basis adjustment(3) |  |  | 700,414 |  |  | 591,903 |
|  | $ | 1,027,875 |  | $ | 941,078 |
Assets—Investments in unconsolidated joint ventures |  | $ | 1,098,560 |  | $ | 1,006,123 |
Liabilities—Distributions in excess of investments in unconsolidated joint ventures |  |  | (70,685 | ) |  | (65,045 | )
|  | $ | 1,027,875 |  | $ | 941,078 |
(1) These amounts include the assets and liabilities of the following joint ventures as of December 31, 2011 and 2010:
|  | SDG Macerich |  | Pacific Premier Retail LP |  | Tysons Corner LLC |
--- | --- | --- | --- | --- | --- | --- | ---
As of December 31, 2011: |  |  |  |  |  |  |  |  |  |
Total Assets |  | $ | 12,772 |  | $ | 1,078,226 |  | $ | 339,324 |
Total Liabilities |  | $ | 226 |  | $ | 1,005,479 |  | $ | 319,247 |
As of December 31, 2010: |  |  |  |  |  |  |  |  |  |
Total Assets |  | $ | 817,995 |  | $ | 1,101,186 |  | $ | 330,117 |
Total Liabilities |  | $ | 815,884 |  | $ | 1,019,513 |  | $ | 324,527 |
(2) Certain mortgage notes payable could become recourse debt to the Company should the joint venture be unable to discharge the obligations of the related debt. As of December 31, 2011 and 2010, a total of $380,354 and $348,658, respectively, could become recourse debt to the Company. As of December 31, 2011 and 2010, the Company has indemnity agreements from joint venture partners for $182,638 and $162,451, respectively, of the guaranteed amount. Included in mortgage notes payable are amounts due to affiliates of Northwestern Mutual Life ("NML") of $663,543 and $573,239 as of December 31, 2011 and 2010, respectively. NML is considered a related party because it is a joint venture partner with the Company in Macerich Northwestern Associates—Broadway Plaza. Interest expense incurred on these borrowings amounted to $42,451, $40,876 and $33,947 for the years ended December 31, 2011, 2010 and 2009, respectively. (3) The Company amortizes the difference between the cost of its investments in unconsolidated joint ventures and the book value of the underlying equity into income on a straight-line basis consistent with the lives of the underlying assets. The amortization of this difference was $9,257, $7,327 and $9,214 for the years ended December 31, 2011, 2010 and 2009, respectively. Combined and Condensed Statements of Operations of Unconsolidated Joint Ventures:
|  | SDG Macerich |  | Pacific Premier Retail LP |  | Tysons Corner LLC |  | Other Joint Ventures |  | Total |
--- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ---
Year Ended December 31, 2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Minimum rents |  | $ | 84,523 |  | $ | 133,191 |  | $ | 63,950 |  | $ | 351,982 |  | $ | 633,646 |
Percentage rents |  |  | 4,742 |  |  | 6,124 |  |  | 2,068 |  |  | 18,491 |  |  | 31,425 |
Tenant recoveries |  |  | 43,845 |  |  | 55,088 |  |  | 41,286 |  |  | 169,516 |  |  | 309,735 |
Other |  |  | 3,668 |  |  | 5,248 |  |  | 3,061 |  |  | 37,743 |  |  | 49,720 |
Total revenues |  |  | 136,778 |  |  | 199,651 |  |  | 110,365 |  |  | 577,732 |  |  | 1,024,526 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shopping center and operating expenses |  |  | 51,037 |  |  | 59,723 |  |  | 34,519 |  |  | 218,981 |  |  | 364,260 |
Interest expense |  |  | 41,300 |  |  | 50,174 |  |  | 14,237 |  |  | 154,382 |  |  | 260,093 |
Depreciation and amortization |  |  | 27,837 |  |  | 41,448 |  |  | 20,115 |  |  | 126,267 |  |  | 215,667 |
Total operating expenses |  |  | 120,174 |  |  | 151,345 |  |  | 68,871 |  |  | 499,630 |  |  | 840,020 |
Gain on sale or distribution of assets |  |  | 366,312 |  |  | — |  |  | — |  |  | 23,395 |  |  | 389,707 |
Gain on early extinguishment of debt |  |  | 15,704 |  |  | — |  |  | — |  |  | — |  |  | 15,704 |
Net income |  | $ | 398,620 |  | $ | 48,306 |  | $ | 41,494 |  | $ | 101,497 |  | $ | 589,917 |
Company's equity in net income |  | $ | 204,439 |  | $ | 24,568 |  | $ | 16,209 |  | $ | 49,461 |  | $ | 294,677 |
Year Ended December 31, 2010 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Minimum rents |  | $ | 90,187 |  | $ | 131,204 |  | $ | 59,587 |  | $ | 354,369 |  | $ | 635,347 |
Percentage rents |  |  | 4,411 |  |  | 5,487 |  |  | 1,585 |  |  | 17,402 |  |  | 28,885 |
Tenant recoveries |  |  | 44,651 |  |  | 50,626 |  |  | 38,162 |  |  | 183,349 |  |  | 316,788 |
Other |  |  | 3,653 |  |  | 6,688 |  |  | 2,975 |  |  | 31,428 |  |  | 44,744 |
Total revenues |  |  | 142,902 |  |  | 194,005 |  |  | 102,309 |  |  | 586,548 |  |  | 1,025,764 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shopping center and operating expenses |  |  | 51,004 |  |  | 55,680 |  |  | 32,025 |  |  | 227,959 |  |  | 366,668 |
Interest expense |  |  | 46,530 |  |  | 51,796 |  |  | 16,204 |  |  | 155,775 |  |  | 270,305 |
Depreciation and amortization |  |  | 30,796 |  |  | 38,928 |  |  | 18,745 |  |  | 122,195 |  |  | 210,664 |
Total operating expenses |  |  | 128,330 |  |  | 146,404 |  |  | 66,974 |  |  | 505,929 |  |  | 847,637 |
Gain on sale of assets |  |  | 6 |  |  | 468 |  |  | — |  |  | 102 |  |  | 576 |
Loss on early extinguishment of debt |  |  | — |  |  | (1,352 | ) |  | — |  |  | — |  |  | (1,352 | )
Net income |  | $ | 14,578 |  | $ | 46,717 |  | $ | 35,335 |  | $ | 80,721 |  | $ | 177,351 |
Company's equity in net income |  | $ | 7,290 |  | $ | 23,972 |  | $ | 13,917 |  | $ | 34,350 |  | $ | 79,529 |
Year Ended December 31, 2009 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Minimum rents |  | $ | 92,253 |  | $ | 131,785 |  | $ | 62,293 |  | $ | 310,526 |  | $ | 596,857 |
Percentage rents |  |  | 4,615 |  |  | 5,039 |  |  | 1,353 |  |  | 15,949 |  |  | 26,956 |
Tenant recoveries |  |  | 48,626 |  |  | 50,074 |  |  | 37,475 |  |  | 152,772 |  |  | 288,947 |
Other |  |  | 3,774 |  |  | 4,583 |  |  | 2,617 |  |  | 24,183 |  |  | 35,157 |
Total revenues |  |  | 149,268 |  |  | 191,481 |  |  | 103,738 |  |  | 503,430 |  |  | 947,917 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shopping center and operating expenses |  |  | 56,189 |  |  | 54,722 |  |  | 31,675 |  |  | 189,223 |  |  | 331,809 |
Interest expense |  |  | 46,686 |  |  | 51,466 |  |  | 15,761 |  |  | 128,755 |  |  | 242,668 |
Depreciation and amortization |  |  | 30,898 |  |  | 36,345 |  |  | 17,953 |  |  | 113,746 |  |  | 198,942 |
Total operating expenses |  |  | 133,773 |  |  | 142,533 |  |  | 65,389 |  |  | 431,724 |  |  | 773,419 |
Loss on sale of assets |  |  | (931 | ) |  | — |  |  | — |  |  | (2,085 | ) |  | (3,016 | )
Net income |  | $ | 14,564 |  | $ | 48,948 |  | $ | 38,349 |  | $ | 69,621 |  | $ | 171,482 |
Company's equity in net income |  | $ | 7,282 |  | $ | 24,894 |  | $ | 19,175 |  | $ | 16,809 |  | $ | 68,160 |
Significant accounting policies used by the unconsolidated joint ventures are similar to those used by the Company.

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- Definition The entire disclosure for equity investment, or group of investments, for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20 percent of the voting stock and the investment is accounted for using the equity method, and the reasons why it is. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6903645&loc=d3e32787-111569 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 18 -Paragraph 20 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6903645&loc=d3e32847-111569 + Details
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