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Contingencies | 9 Months Ended
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Sep. 30, 2014
Commitments and Contingencies Disclosure [Abstract] |
Contingencies | Contingencies Litigation The Company is currently involved in certain litigation that arises in the ordinary course of business, most of which is expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss would not be material. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company. On March 11, 2010, The Promenade D'Iberville, LLC (“TPD”), a subsidiary of the Company, filed a lawsuit in the Circuit Court of Harrison County, Mississippi (the "Mississippi Case"), against M. Hanna Construction Co., Inc. (“M Hanna”), Gallet & Associates, Inc., LA Ash, Inc., EMJ Corporation (“EMJ”) and JEA (f/k/a Jacksonville Electric Authority), seeking damages for alleged property damage and related damages occurring at a shopping center development in D'Iberville, Mississippi. EMJ filed an answer and counterclaim denying liability and seeking to recover from TPD the retainage of approximately $327 allegedly owed under the construction contract. Kohl's Department Stores, Inc. (“Kohl's”) was granted permission to intervene in the Mississippi Case and, on April 13, 2011, filed a cross-claim against TPD alleging that TPD is liable to Kohl's for unspecified damages resulting from the actions of the defendants and for the failure to perform the obligations of TPD under a Site Development Agreement with Kohl's. Kohl's also made a claim against the Company based on the Company's guarantee of the performance of TPD under the Site Development Agreement. The claim by EMJ against the Company has been dismissed, and based on information currently available, the Company believes the likelihood of an unfavorable outcome related to the claims made by Kohl's against the Company in connection with the Mississippi case is remote. The Company provided disclosure of this litigation due to the related party relationship between the Company and EMJ described below. In February 2014 and August 2013, TPD received partial settlements of $800 and $8,240, respectively, from certain of the defendants in the Mississippi Case described above. Subsequent to September 30, 2014, TPD agreed to a resolution of its claims in this litigation against defendant EMJ. See Note 16 for further information. Litigation continues with the other remaining defendants in the matter. Trial for those remaining claims has been continued from its previously scheduled September 2014 setting. The parties are petitioning the court for a new setting. TPD also has filed claims under several insurance policies in connection with this matter, and there are three pending lawsuits relating to insurance coverage. On October 8, 2010, First Mercury Insurance Company (“First Mercury”) filed an action in the United States District Court for the Eastern District of Texas against M Hanna and TPD seeking a declaratory judgment concerning coverage under a liability insurance policy issued by First Mercury to M Hanna. That case was dismissed for lack of federal jurisdiction and refiled in Texas state court. On June 13, 2011, TPD filed an action in the Chancery Court of Hamilton County, Tennessee (the "Tennessee Case") against National Union Fire Insurance Company of Pittsburgh, PA (“National Union”) and EMJ seeking a declaratory judgment regarding coverage under a liability insurance policy issued by National Union to EMJ and recovery of damages arising out of National Union's breach of its obligations. In March 2012, Zurich American and Zurich American of Illinois, which also have issued liability insurance policies to EMJ, intervened in the Tennessee Case and the case was set for trial on October 29, 2013 but, currently, the trial date has been extended while the parties mediate the case. The first mediation session took place on January 14-15, 2014, and the second session took place on March 18-19, 2014. A third session was held on May 22, 2014. On February 14, 2012, TPD filed claims in the United States District Court for the Southern District of Mississippi against Factory Mutual Insurance Company and Federal Insurance Company seeking a declaratory judgment concerning coverage under certain builders risk and property insurance policies issued by those respective insurers to the Company. The Tennessee Case was dismissed in September 2014, after a resolution of those claims. The remaining claims are still pending. Certain executive officers of the Company and members of the immediate family of Charles B. Lebovitz, Chairman of the Board of the Company, collectively have a significant non-controlling interest in EMJ, a major national construction company that the Company engaged to build a substantial number of the Company's properties. EMJ is one of the defendants in the Mississippi Case and in the Tennessee Case described above. Environmental Contingencies The Company evaluates potential loss contingencies related to environmental matters using the same criteria described above related to litigation matters. Based on current information, an unfavorable outcome concerning such environmental matters, both individually and in the aggregate, is considered to be reasonably possible. However, the Company believes its maximum potential exposure to loss would not be material to its results of operations or financial condition. The Company has a master insurance policy that provides coverage through 2022 for certain environmental claims up to $10,000 per occurrence and up to$50,000 in the aggregate, subject to deductibles and certain exclusions. Guarantees The Company may guarantee the debt of a joint venture primarily because it allows the joint venture to obtain funding at a lower cost than could be obtained otherwise. This results in a higher return for the joint venture on its investment, and a higher return on the Company’s investment in the joint venture. The Company may receive a fee from the joint venture for providing the guaranty. Additionally, when the Company issues a guaranty, the terms of the joint venture agreement typically provide that the Company may receive indemnification from the joint venture partner or have the ability to increase its ownership interest. The guarantees expire upon repayment of the debt, unless noted otherwise. The following table represents the Company's guarantees of unconsolidated affiliates' debt as reflected in the accompanying condensed consolidated balance sheets as of September 30, 2014 and December 31, 2013:
|  | As of September 30, 2014 |  | Obligation recorded to reflect guaranty
Unconsolidated Affiliate |  | Company's Ownership Interest |  | Outstanding Balance |  | Percentage Guaranteed by the Company |  | Maximum Guaranteed Amount |  | Debt Maturity Date (1) |  | 9/30/14 |  | 12/31/13
West Melbourne I, LLC - Phase I |  | 50% |  | $ | 40,435 |  |  | 25% |  | $ | 10,109 |  |  | Nov-2015 | (2) | $ | 65 |  |  | $ | 65 |
West Melbourne I, LLC - Phase II |  | 50% |  | 10,757 |  |  | 25% | (3) | 2,689 |  |  | Nov-2015 | (2) | 65 |  |  | 65 |
Port Orange I, LLC |  | 50% |  | 61,102 |  |  | 25% |  | 15,276 |  |  | Nov-2015 | (2) | 157 |  |  | 157 |
JG Gulf Coast Town Center LLC - Phase III |  | 50% |  | 5,840 |  |  | 100% |  | 5,840 |  |  | Jul-2015 |  | — |  |  | — |
Fremaux Town Center JV, LLC - Phase I |  | 65% |  | 37,640 |  |  | 50% | (4) | 21,789 |  |  | Aug-2016 | (5) | 472 |  |  | 460 |
Fremaux Town Center JV, LLC - Phase II |  | 65% |  | 2,045 |  |  | 100% | (6) | 32,100 |  |  | Aug-2016 | (5) | 321 |  |  | — |
|  |  |  |  |  | Total guaranty liability |  | $ | 1,080 |  |  | $ | 747 |
(1) | Excludes any extension options.
(2) | The loan has two one-year extension options, which are at the unconsolidated affiliate's election, for an outside maturity date of November 2017.
(3) | The guaranty was reduced from 100% to 25% in the third quarter of 2014 when Carmike Cinema became operational in August 2014.
(4) | The Company received a 1% fee for this guaranty when the loan was issued in March 2013. In the first quarter of 2014, the loan was modified and extended to increase the capacity to $47,291, which increased the maximum guaranteed amount. The loan was amended and modified in August 2014 to reduce the guaranty from 100% to 50%. The guaranty will be reduced to 25% upon the opening of LA Fitness and payment of contractual rent. The guaranty will be further reduced to 15% when Phase I of the development has been open for one year and the debt service coverage ratio of 1.30 to 1.00 is met.
(5) | The loan has two one-year extension options, which are at the unconsolidated affiliate's election, for an outside maturity date of August 2018.
(6) | The Company received a 1% fee for this guaranty when the loan was issued in August 2014. The guaranty will be reduced to 50% upon the closing of the Dillard's outparcel sale. Upon completion of Phase II of the development and once certain leasing and occupancy metrics have been met, the guaranty will be 25%. The guaranty will be further reduced to 15% when Phase II of the development has been open for one year, the debt service coverage ratio of 1.30 to 1.00 is met and Dillard's is operational.
The Company has guaranteed the lease performance of York Town Center, LP ("YTC"), an unconsolidated affiliate in which the Company owns a 50% interest, under the terms of an agreement with a third party that owns property as part of York Town Center. Under the terms of that agreement, YTC is obligated to cause performance of the third party’s obligations as landlord under its lease with its sole tenant, including, but not limited to, provisions such as co-tenancy and exclusivity requirements. Should YTC fail to cause performance, then the tenant under the third party landlord’s lease may pursue certain remedies ranging from rights to terminate its lease to receiving reductions in rent. The Company has guaranteed YTC’s performance under this agreement up to a maximum of $22,000, which decreases by $800 annually until the guaranteed amount is reduced to $10,000. The guaranty expires on December 31, 2020. The maximum guaranteed obligation was $16,400 as of September 30, 2014. The Company entered into an agreement with its joint venture partner under which the joint venture partner has agreed to reimburse the Company 50% of any amounts it is obligated to fund under the guaranty. The Company did not include an obligation for this guaranty because it determined that the fair value of the guaranty was not material as of September 30, 2014 and December 31, 2013. Performance Bonds The Company has issued various bonds that it would have to satisfy in the event of non-performance. The total amount outstanding on these bonds was $19,673 and $23,513 at September 30, 2014 and December 31, 2013, respectively.

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