Tenants at malls in Guam are focusing on rental payments as they attempt to negotiate a landscape that has left them with zero income in most cases, or with minimum revenue if restaurants are offering takeout.
It’s uncertain how many tenants across the malls will re-open on May 11 for business, particularly as an expected dine-in option for restaurants did not materialize under the government of Guam.
But plans for growth are still in the offing (See Story on Page 18t).
Phillip Schrage, senior vice president of group operations for Goodwind Development Corp., which does business as Micronesia Mall, told the Journal on May 5, that the mall had moved from an initial tenant offering. “Our Covid-19 Assistance Program replaced the mall’s security deposit transfer plan that was previously announced in a tenant memo.”
Now, he said, “The landlord is extending to tenants not in default assistance in the form of no rent being charged during the period when shopping centers were closed by the government [from March 20 through May 10], and a rent discount during the months of May, June and July.”
The mall has been preparing for a changed shopping environment, he said, with the food court meeting health requirements. Kerb-side delivery for food court tenants will be an option for shoppers from May 11, he said.
“Not all tenants will reopen,” he said. “I don’t know if any anchor tenant will re-open the day the mall opens. I wouldn’t anticipate it.”
Macy’s has begun to open nationwide, but Ross Dress for Less has not.
Monte D.M. Mesa, general manager of Guam Premier Outlets and the Tumon Sands Plaza, told the Journal that of 47 tenants at GPO, six restaurants and three at Tumon Sands were offering takeout during the closure of retail outlets. Gov. Lourdes A. Leon Guerrero and Sen Tina Rose Muna Barnes, speaker of the 35th Guam Legislature had both approached Mesa about rent relief.
“I said it’s business between us and our tenants,” he told the Journal. “We are helping our tenants. There’s different ways we’re helping them.” That help is in a way that makes sense, he said. “We share the pain with our tenants.”
Mesa said the GPO and TSP locations were ready to open.
Richard Hawes, managing director of Gemkell Corp., has stores in a variety of properties in Guam, Saipan and Hawaii.
“We are very happy with the Plaza,” he said. “Michael Ysrael has been more than accommodating.” Hawes has not been so complimentary about other properties where Gemkell does business.
“In order for the tourism industry to survive, it needs a partnership of the landlords and tenants to work together,” he said. The Plaza gave tenants a 30% rebate in March. “From April onwards we’ll be paying him the common area charge and a percentage of rental only,” Hawes said. “We are very grateful for that.”
Ysrael said he knows that other landlords have not been helpful to tenants.
“We’re trying to make lemonade out of lemons,” he said. “We work very hard to attract tenants and for a few months of shared misery we can keep our tenants. It feels good to be working with a good set of people. It’s been heartbreaking seeing us laid flat by doctors.”
Ysrael had a request of tenants, he said. “One of the things is — that they do reopen when we reopen.” However, one concern is the attractiveness of stock, he said. He pointed out that in retail, “Inventory has a shelf life.”
As to other locations, Hawes said, “We’re still in discussion with Tumon Sands. I’m pretty sure Tumon Sands will support the tenants,” he said.
Group employees have been furloughed, he said. “But we are paying all the healthcare.”
Agana Shopping Center declined to comment for this story. ASC has lost two tenants recently – Froots and Tony Roma’s.
However, Leann P. Crisostomo, owner of Fizz & Co. at ASC told the Journal, “Basically they’re not charging us rent.” She said that covered the period when malls were not open, and tenants were also not being charged for common area fees or marketing fees.
“They’ve been great for the last three years, so it doesn’t surprise me,” she said.
Fizz & Co opened for takeout when it was allowed to do so. “We’re on the outside, so we have the ability to open without the mall opening. We were given the option.” What was important to ASC management, she said, were the health and safety guidelines.
While ASC runs its air-conditioning twice weekly during the shutdown to problem-prevent, “To run the AC for us, they would have to run it for the whole mall,” Crisostomo said. The mall told her, “You can open, but we will not provide you the AC.”
Fizz & Co. opened with a portable AC and fans to keep staff as comfortable as possible, she said.
As to business, she said, “The first two weeks were bad.” Then Isaac Duenas of Grab N’ Grub Guam delivery service contacted her about a partnership, she said. “We’ve been busy ever since.”
Fizz & Co. has also participated in various relief efforts, Crisostomo said. mbj