Hill Country Galleria files Chapter 11

AUSTIN (KXAN) - Bypassing an auction of the property, Hill Country Galleria filed for Chapter 11 bankruptcy Tuesday. The move came on the heels of last month's foreclosure on the property, barely two-years old.

The site is one of the largest commercial forces in the area just west of Austin. Owner Opus West was unable to make payments on the single construction loan, blaming a terrible financial forecast nationwide.

When babybirgitte, a tenant at the mall, planned to enter the business world, owner Christina Linden said she had no idea the threat of bankruptcy would be hanging overhead.

"We have designed our own brand of children's clothing," she said. "Babies to three years old. And we've been working on it for about a year, and we're getting ready to open in June."

The news made her dream a little more daring, as the future of her landlord, Hill Country Galleria, was up in the air.

"My whole life is invested into this business. We have done this completely with our own savings."

It has been a popular place in the two short years since opening. Plans for townhomes to match its apartments are in the works. Bee Cave City Hall even calls the mall home, and 70% of its retail space is rented.

Shopper Shital Patel said, "We hang out every weekend. This is the closest place for us to shop. And I was expecting to have more restaurants."

Winston Hewett, a spokesperson for Opus Corporation, the mall's parent company, said, "This was a very successful project. It had positive cash flow prior to the loan going into default. Filling that empty space would not have prevented this from happening."

A few of the lenders involved in the defaulted loan were already under financial distress at the time of foreclosure. Opus said this move should not affect business, just a plan to emerge economically sound.

Linden said she will trust that idea, as her worries for the next month shift to the birth of her first baby and and the opening of babybirgitte.

"I think they're doing the best job they can, keeping the business open and fluid and running, and protecting us as much as possible."

Opus South, another entity of the Opus Corporation, which oversees many condo projects in Florida and Alabama, just filed for Chapter 11 two weeks earlier. Opus said it is also a result of a poor market, but it does not foresee any further bankruptcies in the near future.