Shopping malls are the latest businesses seeking financial assistance from the federal government due to the coronavirus pandemic.
Mall operators like Simon Property Group (NYSE:SPG) are closing all of their U.S. properties to combat the spread of COVID-19 as states order certain types of venues, such as restaurants, bars, and casinos, to close.
A domino effect of catastrophe
In a letter sent to the Trump administration, International Council of Shopping Centers CEO Tom McGee called for the federal government to "guarantee or directly pay for business interruption coverage for retailers, restaurants and other tenants as well as landlords."
The industry trade group's 70,000 members include mall operators, developers, financial institutions, and the tenants of the malls themselves, including retailers, restaurants, gyms, and others.
Bergen County, New Jersey, home to the town of Paramus, which features more square footage of mall space per capita than anywhere else in the country, recently ordered all the malls to close. Similarly, American Dream, the third largest mall in North America, also located in Bergen's town of East Rutherford, has closed. That mall features not only retail shopping, but an entire theme park too. After years of financial difficulties and construction delays, retailers were just beginning to open inside the mall.
The ICSC says mall tenants need to have their stability assured, else "the repayment of up to $1 trillion of secured and unsecured debt underlying the shopping center industry will be at risk," leading to a cascade of financial failures, damage to financial markets, higher unemployment, and damage to communities.
Also at risk are the $400 billion in state and local taxes the industry pays.