U.S. shopping malls, already battered from years of retail bankruptcies and declining traffic, are now facing the threat of an economy largely on lockdown as the country works to fight the spread of COVID-19.
On Wednesday, the country’s largest mall owner, Simon Property Group, said it would close all of its U.S. retail properties through at least March 29. Triple Five Group has temporarily shuttered the Mall of America and delayed the grand opening of its American Dream project in New Jersey, and other landlords are expected to follow suit as the number of new coronavirus cases grows.
In a letter to President Donald Trump, Vice President Mike Pence and Treasury Secretary Steven Mnuchin Tuesday, the International Council of Shopping Centers asked the government for help weathering the “insurmountable strain” placed on its members by large-scale closures.
“In the most immediate term, we believe the federal government should guarantee or directly pay for business interruption coverage for retailers, restaurants and other tenants as well as landlords,” ICSC CEO Tom McGee wrote in the letter. “While some companies may have third-party insurance, the current crisis is not covered by these policies.”
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This funding would go toward paying employees and suppliers, he continued, as well as state and local governments via the nearly $400 billion in taxes generated by the industry.
“Without ensuring the stability of our tenant base, the repayment of up to $1 trillion of secured and unsecured debt underlying the shopping center industry will be at risk,” he wrote. “This will jeopardize the entire industry and cause long-term damage to financial markets, rampant unemployment and irreparable harm to communities across our country.”
The letter also pledged the support of ICSC members in providing space and resources for emergency response efforts in the fight against the pandemic.
“ICSC members stand ready to provide parking lots and unoccupied space to stage emergency supplies, facilitate the delivery of food and essential goods to fellow citizens and construct temporary health centers and shelter,” wrote McGee. “Many of our members have already begun supporting local and national efforts with many more ready to assist immediately.”
The National Retail Federation also sent a letter to White House and congressional leaders Wednesday suggesting plans for relief amid the closures, following a request on Monday for officials to consult with retail leaders as they develop plans for curtailing the spread of the novel coronavirus.
“The retail industry is being dramatically impacted by social-distancing that is both voluntary and publicly mandated, and our members tell us that the most important support they can get from the federal government would be access to credit that can sustain them until consumers are back in the marketplace,” wrote NRF president and CEO Matthew Shay.
He stressed that the organization’s members are doing their best to retain and pay employees, but said the industry will need the government’s aid in order to recover. “Assistance in providing for payroll costs might help slow layoffs that will be inevitable if retail sales continue to collapse,” he wrote. “Expanding the employee retention tax credit to businesses that are suffering financial losses because of this crisis would help to offset payroll costs at a time when sales are in decline.”
As of Wednesday, the list of retailers announcing temporary closures had grown to dozens of national chains, including DSW, Nike, J.Crew, Aldo, L Brands and Urban Outfitters.