Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

6. COMMITMENTS AND CONTINGENCIES

Contractual Obligations

As of September 30, 2020, we had unaccrued contractual and other commitments related to our capital improvement projects and development projects of $27.9 million, including $14.1 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. We believe we have satisfied this obligation.

Provision for Employee Separation Expenses

During the nine months ended September 30, 2020 and 2019, we terminated the employment of certain employees and officers. In connection with the departure of those employees and officers, we recorded $0.1 million and $1.2 million, respectively of employee separation expenses in the three and nine months ended September 30, 2020, compared to $0.2 million and $1.1 million, respectively, for the three and nine months ended September 30, 2019. As of September 30, 2020, we had $0.6 million of severance accrued and unpaid related to the termination of employees.

Notice of Non-Compliance with Continued Listing Standards

On September 25, 2020, the Company received notice from the NYSE that the Company is no longer in compliance with the NYSE continued listing standard set forth in Section 802.01C of the NYSE’s Listed Company Manual, which requires listed companies to maintain an average closing price of at least $1.00 per share over a consecutive 30-day trading period.

Under NYSE rules, the Company has ten business days following receipt of the notice to respond to the NYSE and indicate its intent to cure this deficiency or be subject to suspension and delisting. The Company notified the NYSE, within the required ten business day period, that it intends to cure the deficiency. Under NYSE rules, the Company has six months from the date of the notice to regain compliance with the minimum share price requirement.

The Company intends to consider all available options to cure the deficiency and regain compliance. The notice does not affect the Company’s ongoing business operations or its reporting requirements with the SEC.

Property Damage from Natural and Other Disasters

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 nine months ended September 30, 2019, we recorded net recoveries of approximately $0.2 million. These net recoveries primarily relate to remediation expenses and business interruption claims. $0.1 million of the recoveries received relate to business interruption.

During the nine months ended September 30, 2020, Cherry Hill Mall in Cherry Hill, New Jersey experienced a power outage due to the failure of an underground high voltage cable, which required the use of backup generator power. We recorded net costs of approximately $0.6 million during the nine months ended September 30, 2020 and received recoveries of $0.6 million in April 2020.