As the economic fallout of Covid-19 continues, the owners of the Mall of America in Bloomington are falling behind on mortgage payments for the largest shopping center in the U.S. MOA is owned by the privately-held Canadian firm Triple Five Group Ltd. based in Edmonton, Alberta.
The Mall of America has been releasing a prepared statement to answer media inquiries: “Like many other companies, our business has been critically impacted by the Covid-19 pandemic. Our revenues have dropped significantly, while many of our larger expenses have remained fixed. Facing significantly reduced revenues we have not met our full mortgage payment obligations. This is not unique to Mall of America and is a struggle facing countless businesses nationwide.”
According to a report on the Law360 legal news website, Triple Five secured its current $1.4 billion mortgage in August 2014 when it was refinancing the megamall. The group of lenders was led by Credit Suisse Group and also included Wells Fargo & Co. and Citibank.
The Mall of America has been closed since mid-March and is set to reopen on June 1.
The statement released by the Mall added:
“We have made partial mortgage payments as well as meeting other operating expenses to keep our building functioning. Throughout this process we have remained in communication with our lenders, so they fully understood our situation.
Currently our mortgage has been submitted to a special servicer. This is a normal step in order to reach an agreement on modifications to the loan terms that works for all parties. This process is being used by companies throughout the country which have been devastated by this crisis. Our goal is to work with the special servicer – and our primary lenders – in order to resolve this difficult situation.”
Although Triple Five developed the Mall of America, which opened in 1992, it was not the sole owner of the property until 2006. Triple Five and Indianapolis-based Simon Property Group, which owned a stake in MOA, fought a long legal battle over ownership stakes in the mall. Triple Five prevailed and in 2006 bought out the interests of both Simon and TIAA-CREF (Teachers Insurance and Annuity Association of America-College Retirement Equities Fund). The price for those stakes was not disclosed but was estimated by The New York Times and other media reports at $1 billion.
Mall of America owners have been working with the city of Bloomington to add a waterpark as a new attraction for the mall. The total project budget is expected to top $300 million, including costs for a parking ramp and infrastructure. The project has been in discussion for more than two years. But in light of Covid-19, the current timeline for the project is unknown.
The city of Bloomington posted a short update on its website on April 8:
“Work on many city projects continue, including the waterpark. Currently the main focus of the waterpark work is to analyze what impacts the pandemic could have on the project. The uncertainty of both the timeline and impacts of the pandemic remain the biggest unknowns.”