Manhattan Town Center will not have to pay one of its four annual rent installments to the city government after its coronavirus-related closure.

The Manhattan City Commission on Tuesday voted 3-2 to waive a quarterly land lease payment of $46,250 by the Manhattan Town Center. The mall closed for 51 days because of stay-at-home orders to slow the spread of the coronavirus.

The city government owns the land, but Manhattan Town Center pays property taxes. The building owner is Urbancal LLC.

Manhattan Town Center had asked the city to waive three payments in 2020. Mayor Usha Reddi and commissioner Wynn Butler said they did not want to waive that much rent.

Commissioner Aaron Estabrook plus Butler and Reddi voted in favor of waiving only one payment of the rent.

“It’s not a great position to be in,” Estabrook said. “But at the same time, if ... we can help give any kind of consumer confidence and tenant confidence to maintain that mall, it may be a small gesture on our part compared to what could be a much larger problem down the road if we have this empty mall, which nobody wants to see after all the investment that’s gone into it.”

Butler said said he was OK with approving one quarterly payment, which he said represented about the same amount of time the mall was closed.

“That would maybe make sense,” he said.

Reddi said she did not want to put this on taxpayers and said she didn’t think it was fair because all businesses are suffering.

“It’s an equity issue for me,” Reddi said.

She said she feels the impact and loss faced by Manhattan Town Center tenants, but said businesses are facing deficits across the country.

Commissioners Linda Morse and Mark Hatesohl voted against the measure. Hatesohl said he wanted to do more for the mall.

“I’d like to do a little bit more than just abating the one quarter,” Hatesohl said.

Hatesohl said it is not the mall’s fault that it is facing this financial deficit because of the coronavirus pandemic.

“It was one of those things; I don’t like it because the budget impact and other stuff,” Hatesohl said. “But I understand.”

Morse said she doesn’t know what the future holds in regard to how long it will take for restoration of the economy.

“We have to prepare for that ourselves,” Morse said. “It’s going to be hard enough on our city.”

City administrators originally said Manhattan Town Center paid its first two payments for 2020 — one in January and one in April — but the January payment was the final quarter payment for 2019.

“We thought two payments for this calendar year had been done, but it was actually just one,” city manager Ron Fehr said.

In April, Manhattan Town Center only collected 22% of its budgeted payments from tenants, which is based on rental contracts, Jacobson said. That includes all types of payments, including rent from tenants, Jacobson said. Manhattan Town Center received about 16% of those payments in May. Jacobson said some of the businesses’ rents have been reduced. Officials anticipate some tenants may file for bankruptcy protection or be forced to close.

Manhattan Town Center reopened May 6, said Donna Jacobson, senior asset manager from Principal Real Estate Investors LLC, an investment adviser for Manhattan Town Center, though some tenants, including AMC Dine-In Manhattan 13 theater, still have not reopened. AMC’s national headquarters has not yet announced when it will reopen its theaters, and on Wednesday corporate officials said they have “substantial doubt” they will be able to remain in business.

Sidewalk sales

Commissioners unanimously approved a resolution allowing businesses across Manhattan to expand onto city property to allow for social distancing and other health and safety guidelines. This resolution will last until Oct. 31.

Businesses can use nearby city sidewalks, alleys, streets and public parking lots through the resolution during normal business hours, except 11 p.m. to 6 a.m.

“It’s awfully good for the community and the vibe and the aesthetics of being a vibrant community,” Reddi said. “But it also increases consumer confidence if they feel like so now they can go outside, eat and then go home. So, let’s see how it goes. It’s a worth a shot.”

Businesses must apply for a permit. There is no fee for the permit, said Katie Jackson, city attorney.

The resolution does not allow alcohol on the property, but the city can change that later, Jackson said.

Hatesohl said if this is a successful initiative, he’d like to see it happen again.

“I would just like to see this on an ongoing basis made available in an expedited permit way because that’s the way government should work in an expedited and helpful way so it’s better for business and easier to provide services that people want,” Hatesohl said.

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