The Mall of America confirmed Thursday that it has not been able to meet its mortgage payment obligations for the Bloomington retail and entertainment complex that has been closed since mid-March due to the COVID-19 pandemic.
The confirmation comes after published reports that the mall missed payments on its $1.4 billion mortgage in April and May.
According to reports from the Financial Times and Bloomberg, mall management notified Wells Fargo & Co., the servicer overseeing the mortgage, of the challenges it faced because of the global pandemic.
In a response to questions, Mall of America representatives said Thursday that it has made partial mortgage payments because its revenue has dropped 85% since it was forced to close. The mall plans to reopen June 1.
“That lost revenue has impacted our ability to stay current on our operating expenses,” the Mall of America said in a statement. “Unfortunately, Mall of America has not been able to qualify for any of the federal aid programs that are designed to get people back to work and protect businesses. Facing significantly reduced revenue, and the realization that it will take many months to return to pre-COVID operating levels, we have not met our full mortgage payment obligations. This is not unique to Mall of America and is in fact a struggle facing countless businesses nationwide.”
The Mall of America’s mortgage has been submitted to a special servicer in hopes it could agree on modifications on the terms of the loan.
Bloomington Mayor Tim Busse said he and other city officials have talked with mall representatives about possible ways the city could assist but he declined to discuss details.
“We understand the challenges that they are facing. … In reality, the mall is hundreds of small businesses,” Busse said.
Senate Majority Leader Paul Gazelka said last week that the mall sought to tap tax subsidy districts to offset “a huge financial problem” because of unpaid rents. City officials oppose that option.
Mall owner Triple Five Group, a family-run business based in Edmonton, Alberta, has also had to delay the full opening of its American Dream mega mall in New Jersey because of COVID-19.