Construction Begins for Rio Grande Valley Premium Outlets(R)

MERCEDES, Texas, Sept. 29 /PRNewswire-FirstCall/ -- Simon Property Group, Inc. announced today that its Chelsea Property Group division broke ground on Rio Grande Valley Premium Outlets(R) in a ceremony held this morning. The project will be the first outlet center in The Valley and will position Mercedes, Texas as a destination for upscale outlet shopping.

Officials from Roseland, NJ-based Chelsea Property Group were on-hand as construction began on the 400,000 square foot upscale, fashion-oriented manufacturers' outlet center located at the southwest corner of U.S. Expressway 83 and Mile 1-1/2 East Road in the city of Mercedes, Hidalgo County, Texas. Chelsea, a division of Simon, is a leader in the outlet industry based on its proven concept of Premium Outlet Shopping(R). The center, to be built in one phase, will be a single-level, village style project with a southwest architectural theme. The 54-acre property will include the outlet center and several parcels for complementary uses.

Rio Grande Valley Premium Outlets will house over 100 outlet stores and will feature high-quality national brands serving the area's permanent population as well as visitors to the area. "Our trademarked concept of Premium Outlet Shopping(R) differentiates Chelsea centers from other outlet centers and entertainment megamalls. We are confident that we will be bringing together an excellent mix of upscale and high quality merchants befitting this area's desirable demographics," said Michele Rothstein, Senior Vice President of Marketing for Chelsea. "We selected Mercedes because we felt there was a synergy in the type of quality centers we build and the brand conscious and quality-minded consumers who live in and visit this growing market. Shoppers who seek the finest brands at outlet prices and desire a more upscale shopping atmosphere will appreciate the difference in what we will be bringing to The Valley. We appreciate the great support we have received from the City of Mercedes. Mayor Joel Quintanilla has been instrumental in supporting the infrastructure required for the development."

"Breaking ground for Rio Grande Valley Premium Outlets is the latest evidence of how important The Valley is to Simon Property Group," said Les Morris, Manager of Corporate Public Relations for Simon. "We've enjoyed nearly three decades of retailing success in The Valley with La Plaza Mall in McAllen and Valle Vista Mall in Harlingen."

Rio Grande Valley Premium Outlets, scheduled to open in Fall 2006, represents an investment of over $50 million, will create approximately 800 quality jobs, and will generate millions of dollars in sales tax revenue. "We are thrilled to be welcoming Chelsea to our community," said Mayor Quintanilla. "They are a first-class organization and we are confident that this project will be an enhancement to Mercedes and the entire region. The sales tax revenue alone will significantly improve the finances of the City."

"The outlet center is a much awaited project for our community, the Rio Grande Valley and northern Mexico. It will provide a great boost to our economy," said Richard Garcia, City Manager.

Simon Property Group, Inc., headquartered in Indianapolis, Indiana, is a real estate investment trust engaged in the ownership, development and management of retail real estate, primarily regional malls, Premium Outlet(R) centers and community/lifestyle centers. The Company's current total market capitalization is approximately $40 billion. Through its subsidiary partnership, it currently owns or has an interest in 295 properties in the United States containing an aggregate of 201 million square feet of gross leasable area in 40 states plus Puerto Rico. Simon also holds interests in 51 European shopping centers in France, Italy and Poland; 5 Premium Outlet(R) centers in Japan; and one Premium Outlet(R) center in Mexico. Additional Simon Property Group information is available at http://www.simon.com/ .