Mall Of America Enters Forbearance Agreement To Avoid Foreclosure
MINNEAPOLIS (WCCO) -- The Mall of America is taking steps to keep its doors open as its money troubles persist during the COVID-19 pandemic. The mall's owner has entered a forbearance agreement in an attempt to avoid foreclosure.
WCCO dug into the unpaid bills and shares why what's happening states away may be playing a role in the mall's bottom line.
As Bloomington's Mayor, Tim Busse is well aware of Mall of America's value beyond his city's boundaries. But, as missed mortgage and property bill payments pile up, he told us he can't help but question the future.
"We absolutely understand the importance that the mall plays," Busse said. "It is concerning. We're worried about them and we're worried for them."
WCCO has learned Mall of America is three months behind on its $1.4 billion mortgage. It owes $21 million, and it owes $2.3 million in unpaid property taxes to Bloomington. Ten percent of the city's property tax base is from the mall and the mayor says 95% of the city's other businesses in town have managed to pay despite the pandemic.
On Wednesday's forbearance news, Mayor Busse said its glad to see that Mall of America is taking steps to resolve their sizable financial challenges and look forward to the time when they can join other top malls in the metro area in being current on their taxes and mortgage.
Busse also can't ignore the headlines from the east coast, where the same company behind MOA backs another mega mall.
"We've absolutely been following the American Dream project out in New Jersey," Busse said.
Triple Five Group still has no plans to reopen that $5 billion, 3 million-square-foot space, as it too has mounting unpaid bills.
Professor of Marketing at the University of St. Thomas Kim Sovell believes the Mall of America's reopening has been positive.
"I really think malls can survive this, but they need to evolve, and I think Mall of America has done that," Sovell said.
Reminders of COVID-19 precautions are easy to see at Mall of America and, last week, rides started to run again at Nickelodeon Universe with new rules.
"All of that is put in place to help shoppers feel safe while either shopping or enjoying entertainment," Sovell said.
Sovell says this forbearance agreement also shows the mall is serious about moving forward to find an agreement between the lender and borrower to delay a foreclosure. She also believes we can look to Wuhan, China -- where large entertainment venues are once again open -- as a good sign that tourist destinations like Mall of America will again get back to normal.
WCCO's calls and emails to Mall of America and Triple Five Group for comment on the financial future of the mall were not returned on Wednesday.