WestShore Plaza owner, taking a huge financial hit during the pandemic, says its big Sears redevelopment in Tampa is still on
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: May 8, 2020

The owner of WestShore Plaza faces enormous financial headwinds as it navigates rent delays in the wake of the novel coronavirus pandemic.

The uncertainty facing Ohio-based Washington Prime Group Inc. has the potential for major implications in Tampa. Washington Prime has proposed a large-scale redevelopment of the Sears property at Tampa's WestShore Plaza— plans that call for multiple buildings that could be home to anything from condos and apartments to office space to a grocery store.

Washington Prime reported quarterly financial results Thursday evening without a customary call with investors. The mall owner said as of Thursday, it has collected only 30 percent of base rent and charges from tenants for April, with just a 25 percent collection rate from its 43 indoor malls and 50 percent from its 56 open-air properties.

Based on lease modifications, the company expects to collect about 45 percent of contractual base rent and charges for the second quarter of this year, while deferring 45 percent and abating the remaining 10 percent of rent payments.

"While we maintain our commitment to complete our redevelopment projects, we have deferred some of the capital spend to 2021 as some of our retailers plan to open later than originally planned," Washington Prime said in its earnings report. "We now anticipate our share of development costs to be approximately $80 million for the remainder of fiscal year 2020."

It's not known what exactly that means to the Tampa project in terms of timing, but a spokeswoman for the company told the Business Journal that Washington Prime is still moving forward with the redevelopment plans.

"With the focus on serving the needs of its retailers and community partners across the country during the ongoing COVID-19 pandemic, Washington Prime Group, the parent company of WestShore Plaza, is not providing detailed updates on ongoing redevelopment activities at this time," Kim Green, vice president of investor relations, wrote in an email. "That said, planning is continuing for the mixed-use redevelopment replacing the Sears space at WestShore Plaza, and details will be announced as circumstances stabilize and return to normal.

Washington Prime (NYSE: WPG) got a warning from the New York Stock Exchange in late April, after weeks of its stock trading below $1 a share. The company has until the end of the year to bring its stock back into compliance under relaxed restrictions specifically addressing the uncertainty of the pandemic.

And, it warned, "There is a heightened risk regarding the company’s ability to remain compliant with financial covenants." While it's been talking to unsecured creditors about waivers, modifications or other amendments, "no assurances can be made."

"If the company is unable to agree on the terms of such waivers or changes, this could create substantial doubt about its ability to continue as a going concern through May 7, 2021," the statement reads.

Washington Prime already was dealing with the shifting consumer trend toward e-commerce, and so it has diversified its tenant base toward restaurants, gyms, events and experiential tenants that bring people together — all of which face long-term fallout from the pandemic.

Analyst sentiment is that there could be a longer-lasting hit to mall traffic if social distancing becomes a norm and people stay away from crowded places in the long run.