The Wall Street Journal carries an interesting front-page article on the continuing decline and fall of malls. (Kris Hudsch and Vanessa O’Connell, Recession Turns Malls Into Ghost Towns, Wall St. Jour., May 22, 2009, at p. A1). It’s a continuation of the familar story on which we blogged in the past — see our posts on that subject, dated Apr. 16 and 17, and May 15, 2009.
“Some analysts estimate that the number of so-called ‘dead malls’ — centers debilitated by anemic [retail] sales and high vacancy rates — will swell to more than 100 by the end of this year.”
But that leaves a mystery that we have not seen addressed in the press. At least some of those malls were created as urban redevelopment projects, which means that tax-free municipal TIF bonds were issued to finance them. So our question is: what happened to those bonds and the bondholders? Have the issuing agencies defaulted? Or are they continuing to service them? And if so, where is the money coming from? If any of our readers know, please do enlighten us.