Mills Loses a Top Executive

The mall REIT's head of development leaves the beleaguered company.
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Beleaguered mall developer

Mills Corp.

(MLS)

has lost the president of its development division, James Dausch, according to sources familiar with the matter.

It's not clear if Dausch left on his own accord or if he was part of a new round of downsizing at the company. Dausch has served as the president of Mills' development division since August 2002, but had worked as a vice president at the division since 1994.

Dausch becomes the latest high-profile executive to part ways with the real estate investment trust, which is facing an

SEC investigation and numerous shareholder lawsuits related to its ongoing financial restatements. In early January, Mills announced that 17 officers were leaving the company or being laid off, including Kenneth Parent, the company's chief operating officer, who "retired" at the age of 45.

The company, which is also exploring a possible sale, said in late February that it would eliminate 77 further positions and take a $1.2 million charge for the layoffs.

When asked if he knew about Dausch's departure, Mills spokesman David Douglass said, "I'll get back to you." He hasn't returned with comment.

While CEO Larry Siegel is considered the artist of the company, providing the creative vision for Mills' unique development projects that blend entertainment and retail, Dausch was the one who implemented that vision as head of development.

Among Dausch's roles was heading up the $1.3 billion Xanadu project, a high-profile development in New Jersey's Meadowlands. The

Newark Star-Ledger

reported on Saturday that he will remain an outside consultant on the Xanadu project, which remains under construction. A source close to the project confirmed Dausch will be a consultant.

Rich Moore, an analyst at RBC Capital Markets, was not aware of Dausch's departure, but said his exit would be a "very negative sign for the company."

"Jim Dausch is the brains behind the development at Mills. And Mills is first and foremost a developer," Moore says. With Dausch gone, "it means that they won't likely be undertaking new development. If there's any thought that these guys would be a going concern, that should disappear with this departure of Dausch."