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Investments in Unconsolidated Real Estate Joint Ventures | 12 Months Ended
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Dec. 31, 2014
Equity Method Investments and Joint Ventures [Abstract] |
Investments in Unconsolidated Real Estate Joint Ventures | Investments in Unconsolidated Real Estate Joint Ventures Our investments in unconsolidated joint ventures as of December 31, 2014 and 2013 aggregated $208.0 million and $140.2 million respectively. We have evaluated the accounting treatment for each of the joint ventures and have concluded based on the current facts and circumstances that the equity method of accounting should be used to account for the individual joint ventures. At December 31, 2014 and 2013, we were members of the following unconsolidated real estate joint ventures:
As of December 31, 2014
Joint Venture |  | Outlet Center Location |  | Ownership % |  | Square Feet (in 000's) |  | Carrying Value of Investment (in millions) |  | Total Joint Venture Debt (in millions)
Galveston/Houston |  | Texas City, TX |  | 50.0 | % |  | 353 |  |  | $ | 1.3 |  |  | $ | 65.0 |
National Harbor |  | National Harbor, MD |  | 50.0 | % |  | 339 |  |  | 9.5 |  |  | 83.7 |
RioCan Canada |  | Various |  | 50.0 | % |  | 870 |  |  | 132.5 |  |  | 15.7 |
Savannah (1) |  | Savannah, GA |  | 50.0 | % |  | — |  |  | 46.5 |  |  | 25.5 |
Westgate |  | Glendale, AZ |  | 58.0 | % |  | 381 |  |  | 14.3 |  |  | 54.0 |
Wisconsin Dells |  | Wisconsin Dells, WI |  | 50.0 | % |  | 265 |  |  | 2.4 |  |  | 24.3 |
Other |  |  |  |  |  | — |  |  | 1.5 |  |  | — |
|  |  |  |  |  |  |  | $ | 208.0 |  |  | $ | 268.2 |
Charlotte(2) |  | Charlotte, NC |  | 50.0 | % |  | 398 |  |  | $ | (2.2 | ) |  | $ | 90.0 |
|  |  |  |  |  |  |  | $ | (2.2 | ) |  | $ | 90.0 |
(1) | Based on capital contribution and distribution provisions in the joint venture agreement, we expect our economic interest in the venture's cash flow to be greater than the ownership percentage indicated above, which in this case, states our legal interest in this venture. Our economic interest may fluctuate based on a number of factors, including mortgage financing, partnership capital contributions and distributions, and proceeds from gains or losses of asset sales.
(2) | The negative carrying value is due to the distributions of proceeds from a mortgage loan, as well as quarterly distributions of excess cash flow, exceeding the original contributions from the partners.
As of December 31, 2013
Joint Venture |  | Outlet Center Location |  | Ownership % |  | Square Feet (in 000's) |  | Carrying Value of Investment (in millions) |  | Total Joint Venture Debt (in millions)
Charlotte |  | Charlotte, NC |  | 50.0 | % |  | — |  |  | $ | 11.6 |  |  | $ | — |
Galveston/Houston |  | Texas City, TX |  | 50.0 | % |  | 353 |  |  | 7.4 |  |  | 65.0 |
National Harbor |  | National Harbor, MD |  | 50.0 | % |  | 336 |  |  | 16.7 |  |  | 52.4 |
RioCan Canada |  | Various |  | 50.0 | % |  | 433 |  |  | 85.7 |  |  | 17.9 |
Westgate |  | Glendale, AZ |  | 58.0 | % |  | 332 |  |  | 16.1 |  |  | 43.1 |
Wisconsin Dells |  | Wisconsin Dells, WI |  | 50.0 | % |  | 265 |  |  | 2.5 |  |  | 24.3 |
Other |  |  |  |  |  | — |  |  | 0.2 |  |  | — |
|  |  |  |  |  |  |  | $ | 140.2 |  |  | $ | 202.7 |
These investments are recorded initially at cost and subsequently adjusted for our equity in the venture's net income (loss), cash contributions, distributions and other adjustments required by the equity method of accounting as described below. Fees we received for various services provided to our unconsolidated joint ventures were recognized in management, leasing and other services as follows (in thousands):
|  | Year Ended December 31,
|  | 2014 |  | 2013 |  | 2012
Fees: |  |  |  |  |  |
Development and leasing |  | $ | 725 |  |  | $ | 595 |  |  | $ | 193 |
Loan guarantee |  | 463 |  |  | 161 |  |  | 80 |
Management |  | 1,897 |  |  | 1,831 |  |  | 1,301 |
Marketing |  | 506 |  |  | 493 |  |  | 433 |
Total Fees |  | $ | 3,591 |  |  | $ | 3,080 |  |  | $ | 2,007 |
Our investments in real estate joint ventures are reduced by the percentage of the profits earned for leasing and development services associated with our ownership interest in each joint venture. Our carrying value of investments in unconsolidated joint ventures differs from our share of the assets reported in the “Summary Balance Sheets - Unconsolidated Joint Ventures” shown below due to adjustments to the book basis, including intercompany profits on sales of services that are capitalized by the unconsolidated joint ventures. The differences in basis (totaling $4.4 million and $1.6 million as of December 31, 2014 and 2013, respectively) are amortized over the various useful lives of the related assets. Charlotte, North Carolina In July 2014, we opened a 398,000 square foot outlet center in Charlotte, NC that was developed through, and is owned by, a joint venture formed in May 2013. The outlet center is located eight miles southwest of uptown Charlotte at the interchange of I-485 and Steele Creek Road (North Carolina Highway 160). Construction of the outlet center, which commenced during the third quarter of 2013, was initially funded with equal equity contributions by the partners. In November 2014, the joint venture closed on an interest only mortgage closed on an interest only mortgage loan for $90.0 million at an interest rate of LIBOR + 1.45%. The loan initially matures in November 2018, with the option to extend the maturity for one additional year. The joint venture received net loan proceeds of $89.4 million and distributed them equally to the partners. The loan balance as of December 31, 2014 was approximately $90.0 million. During construction, we provided development services to the joint venture and joint leasing services with our partner. Subsequent to the outlet center opening, our partner is providing property management, marketing and leasing services to the joint venture. Deer Park, Long Island, New York As described in Note 3, we acquired an additional one-third ownership interest in Deer Park and have consolidated the property for financial reporting purposes since the acquisition date. Prior to August 30, 2013, this was an unconsolidated joint venture. Galveston/Houston, Texas In October 2012, we opened an approximately 353,000 square foot outlet center in Texas City, Texas that was developed through, and is owned by, a joint venture formed in June 2011. The development was initially fully funded with equity contributed to the joint venture by Tanger and its partner. In July 2013, the joint venture closed on a $70.0 million mortgage loan with a rate of LIBOR + 1.50% and a maturity date of July 2017, with the option to extend the maturity for one additional year. The joint venture received total loan proceeds of $65.0 million and distributed the net proceeds equally to the partners. We used our share of the proceeds to reduce amounts outstanding under our unsecured lines of credit. We are providing property management, marketing and leasing services to the outlet center. National Harbor, Maryland In November 2013, we opened an approximately 339,000 square foot outlet center at National Harbor in the Washington, D.C. Metro area that was developed through, and is owned by, a joint venture formed in May 2011. In November 2014, the joint venture amended the initial construction loan to increase the amount available to borrow from $62.0 million to $87.0 million and extended the maturity date until November 2019. The loan still carries an interest rate of LIBOR + 1.65%. At the closing of the amendment, the joint venture distributed approximately $19.0 million equally between the partners. The loan balance as of December 31, 2014 was approximately $83.7 million. We are providing property management, marketing and leasing services to the joint venture. RioCan Canada We have entered into a 50/50 co-ownership agreement with RioCan Real Estate Investment Trust to develop and acquire outlet centers in Canada. Under the agreement, any outlet centers developed or acquired will be branded as Tanger Outlet Centers. We have agreed to provide leasing and marketing services for the outlet centers and RioCan has agreed to provide development and property management services. In October 2014, the co-owners opened Tanger Outlets Ottawa, the first ground up development of a Tanger Outlet Center in Canada. Located in suburban Kanata off the TransCanada Highway (Highway 417) at Palladium Drive, the outlet center currently contains approximately 288,000 square feet, with additional square footage totaling approximately 28,000 square feet related to an anchor tenant expected to be completed and opened in early 2016. During the second quarter of 2013, the co-owners purchased the land for $28.7 million and broke ground on construction. As of December 31, 2014, our share of the costs incurred to date for the development of the outlet center, which was funded with equity, totaled approximately $45.3 million. In November 2014, the co-owners opened an approximately 149,000 square foot expansion to the existing Cookstown Outlet Mall, bringing the total square feet of the outlet center to approximately 305,000 square feet. The co-owners acquired land adjacent to the existing Cookstown Outlet Mall in March 2013 for $13.8 million and commenced construction of the expansion in May 2013. As of December 31, 2014, our share of the incurred costs related to the expansion and renovation of the existing outlet center, which was funded with equity, totaled approximately $27.1 million. Other properties owned by the RioCan Canada co-owners include Les Factoreries Saint-Sauveur and Bromont Outlet Mall. Les Factoreries Saint-Sauveur, is located northwest of Montreal adjacent to Highway 15 in the town of Saint-Sauveur, Quebec and is approximately 116,000 square feet. The Bromont Outlet Mall, is located east of Montreal near the eastern townships adjacent to Highway 10 in the town of Bromont, Quebec and is approximately 161,000 square feet During the first quarter of 2012, the co-owners terminated an option contract to develop a outlet center in Halton Hills, Ontario and accordingly wrote-off pre-development costs of approximately $1.4 million. Savannah, Georgia In January 2014, we announced a joint venture arrangement to develop Tanger Outlets Savannah. The outlet center will include approximately 377,000 square feet, and is located on I-95, just north of I-16 in Pooler, Georgia, adjacent to the City of Savannah, and near the Savannah International Airport. As of December 31, 2014, our equity contributions totaled $45.2 million and our partner’s equity contributions totaled $7.4 million. Contributions we make in excess of our partners' equity contributions will earn a preferred rate of return equal to 8% from the date the contributions are made until the outlet center’s grand opening date, and then 10% annually thereafter. The joint venture has an interest only mortgage loan with the ability to borrow up to $93.0 million at an interest rate of LIBOR + 1.65%. The loan initially matures on May 21, 2017, with two, one -year extension options. As of December 31, 2014, the balance on the loan was $25.5 million. We are providing development, management and marketing services to the joint venture; and with our partner, are jointly providing leasing services to the outlet center. Westgate, Glendale, Arizona In November 2014, the joint venture completed approximately 50,000 square feet of a 78,000 square foot expansion of the existing property which upon completion will bring the total square feet of the outlet center to approximately 409,000 square feet. The remaining square footage is expected to be completed and opened in the first quarter of 2015. Construction commenced on the expansion during the second quarter of 2014 and was funded with borrowings under the amended Westgate mortgage loan. In May 2014, the joint venture amended and restated the initial construction loan to increase the amount available to borrow from $48.3 million to $62.0 million. The amended and restated loan matures in June 2015 with the option to extend the maturity date for two additional years. As of December 31, 2014, the balance on the loan was $54.0 million. The Westgate outlet center opened in November 2012 and was developed through, and currently owned by, a joint venture that was formed in May 2012. We are providing property management, construction supervision, marketing and leasing services to the joint venture. Wisconsin Dells, Wisconsin The Wisconsin Dells outlet center opened in August 2006 as was developed through, and is currently owned by, a joint venture that was formed in March 2005. In December 2012, the joint venture closed on the refinance of its $24.3 million mortgage loan. The refinanced interest-only, non-recourse mortgage loan has a 10 year term and carries an interest rate of LIBOR + 2.25%. We are providing property management, leasing and marketing services to the joint venture. In February 2015, we closed on the sale of our equity interest in the joint venture that owned an outlet center in Wisconsin Dells, Wisconsin for approximately $15.6 million. As a result of this transaction, we expect to record a gain of approximately $13.9 million in the first quarter of 2015, which represents the difference between the carrying value of our equity method investment and the purchase price. Condensed combined summary financial information of joint ventures accounted for using the equity method as of December 31, 2014 and 2013 is as follows (in thousands):
Condensed Combined Balance Sheets - Unconsolidated Joint Ventures |  | 2014 |  | 2013
Assets |  |  |  |
Land |  | $ | 102,601 |  |  | $ | 66,020 |
Buildings, improvements and fixtures |  | 542,501 |  |  | 327,972 |
Construction in progress, including land |  | 104,780 |  |  | 86,880 |
|  | 749,882 |  |  | 480,872 |
Accumulated depreciation |  | (48,233 | ) |  | (29,523 | )
Total rental property, net |  | 701,649 |  |  | 451,349 |
Cash and cash equivalents |  | 46,917 |  |  | 22,704 |
Deferred lease costs, net |  | 21,234 |  |  | 19,281 |
Deferred debt origination costs, net |  | 5,995 |  |  | 1,737 |
Prepaids and other assets |  | 12,766 |  |  | 9,107 |
Total assets |  | $ | 788,561 |  |  | $ | 504,178 |
Liabilities and Owners' Equity |  |  |  |
Mortgages payable |  | $ | 358,219 |  |  | $ | 222,058 |
Accounts payable and other liabilities |  | 70,795 |  |  | 8,540 |
Total liabilities |  | 429,014 |  |  | 230,598 |
Owners' equity |  | 359,547 |  |  | 273,580 |
Total liabilities and owners' equity |  | $ | 788,561 |  |  | $ | 504,178 |
Condensed Combined Statements of Operations- Unconsolidated Joint Ventures: |  | Year Ended December 31,
|  | 2014 |  | 2013 |  | 2012
Revenues (1) |  | $ | 78,625 |  |  | $ | 85,682 |  |  | $ | 54,936 |
Expenses: |  |  |  |  |  |
Property operating |  | 30,986 |  |  | 31,610 |  |  | 24,678 |
General and administrative |  | 621 |  |  | 977 |  |  | 970 |
Acquisition costs |  | — |  |  | 477 |  |  | 1,437 |
Abandoned development costs |  | 472 |  |  | 153 |  |  | 1,447 |
Impairment charge |  | — |  |  | — |  |  | 420 |
Depreciation and amortization |  | 23,426 |  |  | 26,912 |  |  | 19,914 |
Total expenses |  | 55,505 |  |  | 60,129 |  |  | 48,866 |
Operating income |  | 23,120 |  |  | 25,553 |  |  | 6,070 |
Gain on early extinguishment of debt (2) |  | — |  |  | 13,820 |  |  | — |
Interest expense |  | (5,459 | ) |  | (11,602 | ) |  | (14,760 | )
Net income (loss) |  | $ | 17,661 |  |  | $ | 27,771 |  |  | $ | (8,690 | )
The Company and Operating Partnership's share of: |  |  |  |  |  |
Net income (loss) |  | $ | 9,053 |  |  | $ | 11,040 |  |  | $ | (3,295 | )
Depreciation and asset impairments (real estate related) (2) |  | 12,212 |  |  | 12,419 |  |  | 8,245 |
(1) | Note that revenues for the year ended December 31, 2013 include approximately $9.5 million of other income from the settlement of a lawsuit at Deer Park prior to our acquisition of an additional one-third interest in and the consolidation of the property.
(2) | Represents a gain on early extinguishment of debt that was recorded as part of the refinancing of the debt at Deer Park in August 2013 (See Note 3).

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: 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 2: 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 3: 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=35687916&loc=d3e32787-111569 Reference 4: 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=35687916&loc=d3e32847-111569 + Details
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