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Commitments and Contingencies
3 Months Ended
Mar. 31, 2020
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

6. COMMITMENTS AND CONTINGENCIES

 

Contractual Obligations

 

As of March 31, 2020, we had unaccrued contractual and other commitments related to our capital improvement projects and development projects of $56.8 million, including $32.8 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 March 31, 2020, we believe we have satisfied this obligation.

 

Provision for Employee Separation Expenses

 

In 2020, we terminated the employment of certain employees and officers. In connection with the departure of those employees and officers, we recorded $0.1 million of employee separation expense in the three months ended March 31, 2020, compared to $0.7 million for the three months ended March 31, 2019. As of March 31, 2020, we had $0.4 million of severance accrued and unpaid related to activities related to the termination of employment of employees.

 

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 three months ended March 31, 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 three months ended March 31, 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 three months ended March 31, 2020 and subsequently received recoveries of $0.6 million in April 2020.