MLS Mills Corp

The Mills Corporation (NYSE:MLS) announced today that it has completed a restructured transaction with Colony Capital Acquisitions, LLC and KanAm USA Management XXII Limited Partnership regarding Meadowlands Xanadu (�Project�). This transaction eliminates future financial obligations of The Mills to the Project, releases the Company from any obligations to contractors, the New Jersey Sports and Exposition Authority, the State of New Jersey, ends any guarantees and preferences and indemnifies The Mills with respect to all pre-closing obligations to third parties. The Company also announced that, as anticipated, Laurence C. Siegel is resigning as non-executive Chairman and that The Mills� Board of Directors will shortly appoint a new Chairman. Under the terms of the restructured transaction, The Mills has issued to Colony subordinated notes with a face value of $175 million, $87.5 million maturing on September 30, 2007 and $87.5 million maturing on September 30, 2008. Under the terms of the revised agreement, The Mills will have a subordinated capital account of approximately $500 million which may, in a possible future liquidity event for the partnership, provide some financial return to The Mills. Mark S. Ordan, the Company�s Chief Executive Officer and President, stated, �We believe from our strategic alternative process that the completion of this transaction will facilitate this very important process. We are also pleased that this transaction will further reduce our corporate overhead and obligations and allow the Company to continue to focus on its core assets.� The Mills expects to record an impairment charge for GAAP purposes that equals its entire capital account including the capital contributed over the balance of this year and the full amount of the subordinated debt issued as a part of the revised transaction. Additional details of the transaction, including further information on terms will be available in a Form 8-K to be filed by the Company with the Securities and Exchange Commission. About The Mills Corporation The Mills Corporation, based in Chevy Chase, MD, is a developer, owner and manager of a diversified portfolio of retail destinations, including regional shopping malls and market-dominant retail and entertainment centers. It currently owns 39 properties in the United States totaling approximately 48 million square feet. 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 exploration of strategic alternatives or the ultimate success of the Meadowlands Xanadu project - may be deemed forward-looking statements within the meaning of the federal securities laws. Although The Mills believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, The Mills can give no assurance that its expectations will be attained or that the exploration of strategic alternatives will result in any transaction and it is possible that our actual circumstances and results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. The Mills 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 Mills� various filings with the SEC, 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. The Mills Corporation (NYSE:MLS) announced today that it has completed a restructured transaction with Colony Capital Acquisitions, LLC and KanAm USA Management XXII Limited Partnership regarding Meadowlands Xanadu ("Project"). This transaction eliminates future financial obligations of The Mills to the Project, releases the Company from any obligations to contractors, the New Jersey Sports and Exposition Authority, the State of New Jersey, ends any guarantees and preferences and indemnifies The Mills with respect to all pre-closing obligations to third parties. The Company also announced that, as anticipated, Laurence C. Siegel is resigning as non-executive Chairman and that The Mills' Board of Directors will shortly appoint a new Chairman. Under the terms of the restructured transaction, The Mills has issued to Colony subordinated notes with a face value of $175 million, $87.5 million maturing on September 30, 2007 and $87.5 million maturing on September 30, 2008. Under the terms of the revised agreement, The Mills will have a subordinated capital account of approximately $500 million which may, in a possible future liquidity event for the partnership, provide some financial return to The Mills. Mark S. Ordan, the Company's Chief Executive Officer and President, stated, "We believe from our strategic alternative process that the completion of this transaction will facilitate this very important process. We are also pleased that this transaction will further reduce our corporate overhead and obligations and allow the Company to continue to focus on its core assets." The Mills expects to record an impairment charge for GAAP purposes that equals its entire capital account including the capital contributed over the balance of this year and the full amount of the subordinated debt issued as a part of the revised transaction. Additional details of the transaction, including further information on terms will be available in a Form 8-K to be filed by the Company with the Securities and Exchange Commission. About The Mills Corporation The Mills Corporation, based in Chevy Chase, MD, is a developer, owner and manager of a diversified portfolio of retail destinations, including regional shopping malls and market-dominant retail and entertainment centers. It currently owns 39 properties in the United States totaling approximately 48 million square feet. 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 exploration of strategic alternatives or the ultimate success of the Meadowlands Xanadu project - may be deemed forward-looking statements within the meaning of the federal securities laws. Although The Mills believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, The Mills can give no assurance that its expectations will be attained or that the exploration of strategic alternatives will result in any transaction and it is possible that our actual circumstances and results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. The Mills 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 Mills' various filings with the SEC, 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.