Simon CEO explains Palm Beach Mall problems

Simon Property Group CEO David Simon recently told Wall Street analysts that Palm Beach Mall, which is in the middle of a foreclosure lawsuit, had become a financial drain on the company. The foreclosure lawsuit, filed in April, claims that Simon Property Group has not repaid $55.4 million in debt to the mall’s lender, JPMorgan Chase. Simon said his company had put millions of dollars into renovating the mall, and when the renovated mall still did not seem financially viable, he begun working on a redevelopment plan. That plan called for turning the mall into an open-air retail center with furniture store Ikea as a major tenant. But Ikea pulled out of the project, putting redevelopment on hold, and the mall lost several other department store tenants, including Macy’s, in late 2008 and early 2009.