ICSC asks government to guarantee or pay for business interruption coverage
With indoor malls temporarily going dark as stores and restaurants close to help contain the spread of COVID-19, the International Council of Shopping Centers is appealing to the federal government for relief.
In a statement, ICSC president and CEO Tom McGee noted that the majority of the estimated $6.7 trillion of consumer activity generated by the retail, food-and-beverage, entertainment and consumer service industries occurs within America’s shopping centers, with nearly one out of four American jobs retail-related. Nearly 70% of the shopping center tenants are small businesses that employ less than 10 people.
While necessary public health and safety actions are being taken have required retailers, restaurants, gyms and other service providers to close, the shutterings are placing an “insurmountable strain on our members and we believe federal government action is urgently needed,” McGee said.
In the most immediate term, ICSC wants the federal government to guarantee or directly pay for business interruption coverage for retailers, restaurants and other tenants as well as landlords.
“While some companies may have third party insurance, the current crisis is not covered by those policies,” McGee stated. “This will allow these businesses to continue to pay their employees and suppliers. Most importantly, the nearly $400 billion of state and local taxes the shopping center industry generates to support local communities will continue.”
Without ensuring the stability of malls’ tenant base, the repayment of up to $1 trillion of secured and unsecured debt underlying the shopping center industry will be at risk, warned McGee.
“This will jeopardize the entire industry and cause long-term damage to financial markets, rampant unemployment and irreputable harm to communities across our country,” he added. “As the ramifications of the crisis become clearer in the near term, the industry will require further federal support associated with outstanding debt obligations as well as tax and regulatory relief. ICSC respectfully requests the opportunity to urgently discuss our proposals with you at this critical period in the history of our nation and the shopping center industry.”
McGee said that ICSC members are providing parking lots and unoccupied space to space to stage emergency supplies, facilitate the delivery of food and essentials goods to fellow citizens and construct temporary health centers and shelter. “Many of our members have already begun supporting local and national efforts with many more ready to assist immediately,” he said.