MLS Mills Corp

The Mills Corporation (NYSE:MLS) today announced a series of changes to enhance organizational efficiency, strengthen the finance and accounting team and reduce the cost of ongoing operations. Among other things, the measures are intended to facilitate the Company's proactive exploration of strategic alternatives. -0- *T -- Richard J. Nadeau has been appointed executive vice president for finance and accounting and is expected to transition to the chief financial officer position. He will strengthen the Company's financial reporting team and assist in the previously disclosed restatement process and the consideration of strategic alternatives. He will continue to work with the Company's current Chief Financial Officer M.J. Morrow and her team. A 30-year accounting and auditing veteran, Mr. Nadeau formerly was chief financial officer for Colt Defense LLC in Hartford, Connecticut, and before that, an audit partner at KPMG and Arthur Andersen. Mr. Nadeau has broad REIT and real estate industry experience. -- The Company has reorganized its corporate structure and made key staffing changes. Leasing, development, marketing and external communications now report directly to new Chief Operating Officer Mark S. Ordan. -- The recently established Oversight Committee of the board of directors is working closely with management and the board's Executive Committee in various areas, including operational, governance, personnel and budget matters. -- The Company has implemented a further reduction in force of approximately 70 people, bringing the total headcount reduction made in the last 90 days to approximately 160 people. Additional positions have been eliminated through attrition. The total workforce reductions and attrition are expected to result in an annual run-rate cost savings of approximately $35 million. These anticipated savings are expected to be offset in 2006 by non-recurring charges, including severance and costs associated with the Company's previously announced pending restatement of its financial statements and related matters. The Company believes its workforce now is appropriate for the size of its operations and development pipeline. -- The reduction in force included James F. Dausch, who is leaving as president of the Company's development division effective May 2, 2006. Mr. Dausch is expected to continue to serve with the Company in a consulting role, working on state and local issues in New Jersey regarding our largest project, Meadowlands Xanadu. Mr. Dausch will directly advise the Meadowlands head of development, Dan Haggarty, and senior management. Mike Bryant, a development industry veteran, will be overseeing the development division of the company. Mr. Bryant has been a consultant for The Mills and for many years was a senior-level executive with The Rouse Company, where he had responsibility for a nationwide portfolio of developments. -- As previously announced, the Company is aggressively pursuing the exploration of strategic options to enhance shareholder value, which may include a sale of all or part of the Company or a recapitalization. President Mark D. Ettenger is leading the Company's strategic alternatives initiative along with his other responsibilities. Goldman, Sachs & Co. and J.P. Morgan Securities are assisting the Company with this process. *T "Today's announcements signal our commitment to strengthen the Company and enhance shareholder value," commented Laurence C. Siegel, chairman of the board and chief executive officer. "We welcome Rick Nadeau and his tremendous skill set and experience, and are pleased that Jim Dausch will continue to help us advance the important Meadowlands Xanadu project." "These changes are designed to help ensure that we continue to build value in our core operating properties and development and redevelopment opportunities and that we prudently manage our resources and spending," added Mr. Siegel. About The Mills Corporation The Mills Corporation, based in Arlington, Virginia, is a developer, owner and manager of a diversified global portfolio of retail destinations including regional shopping malls, market dominant retail and entertainment centers, and international retail and leisure destinations. It currently owns 42 properties in the U.S., Canada and Europe, totaling 51 million square feet. In addition, The Mills has various projects in development, redevelopment or under construction. The Mills is traded on the New York Stock Exchange under the ticker: MLS. For more information, visit the Company's website at www.themills.com. Statements in this press release that are not historical - including the anticipated cost savings associated with the reduction in force - may be deemed forward-looking statements within the meaning of the federal securities laws. Although The Mills Corporation believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained and it is possible that our actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. The Mills Corporation undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The reader is directed to the Company's various filings with the Securities and Exchange Commission, including quarterly reports on Form 10-Q, reports on Form 8-K and its annual reports on Form 10-K for a discussion of such risks and uncertainties. There can be no assurance that the exploration of strategic alternatives will result in any transaction.