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Commitments and Contingencies
6 Months Ended
Jun. 30, 2019
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

6. COMMITMENTS AND CONTINGENCIES

 

Contractual Obligations

 

As of June 30, 2019, we had unaccrued contractual and other commitments related to our capital improvement projects and development projects of $118.5 million, including $61.0 million of commitments related to the redevelopment of Fashion District Philadelphia, in the form of tenant allowances and contracts with general service providers and other professional service providers. For purposes of this disclosure, the contractual obligations and other commitments related to Fashion District Philadelphia are included at 100% of the obligation and not at our 50% ownership share. In addition, our operating partnership, PREIT Associates, has jointly and severally guaranteed the obligations of the joint venture we formed with Macerich to develop Fashion District Philadelphia to commence and complete a comprehensive redevelopment of that property costing not less than $300.0 million within 48 months after commencement of construction, which was March 14, 2016. As of June 30, 2019, we expect to meet this obligation.

 

Provision for Employee Separation Expenses

 

In 2019, we terminated the employment of certain employees and officers. In connection with the departure of those employees and officers, we recorded $0.1 and $0.9 million of employee separation expense in the three and six months ended June 30, 2019, respectively, compared to $0.4 million and $0.4 million for the three and six months ended June 30, 2018, respectively. As of June 30, 2019, we had $0.8 million of severance accrued and unpaid related to activities related to the termination of employment of employees.

 

Property Damage from Natural Disaster

 

During September 2018, Jacksonville Mall in Jacksonville, North Carolina incurred property damage and an interruption of business operations as a result of Hurricane Florence. The property was closed for business during and immediately after the natural disaster, however, significant remediation efforts were quickly undertaken and the mall was reopened shortly thereafter.

 

During the three and six months ended June 30, 2019, we recorded net recoveries of approximately $1.9 million and $1.6 million, respectively. These net recoveries relate to remediation expenses.