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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2018
Commitments And Contingencies Disclosure [Abstract] |
Commitments and Contingencies |
11. | Commitments and Contingencies
Hurricane Loss In 2017, Hurricane Maria made landfall in Puerto Rico. At June 30, 2018, RVI owned 12 assets in Puerto Rico, aggregating 4.4 million square feet of Company-owned gross leasable area (“GLA”). These assets were included in the spin-off of RVI (Note 1). One of the 12 assets (Plaza Palma Real, consisting of approximately 0.4 million of Company-owned GLA) was severely damaged and was not operational following the storm, except for two anchor tenants and a few other tenants representing a minimal amount of Company-owned GLA. The other 11 assets sustained varying degrees of damage, consisting primarily of roof and HVAC system damage and water intrusion. As of June 30, 2018, the estimated net book value of the property written off for damage to the Company’s Puerto Rico assets owned as of that date was $78.8 million. In addition, at June 30, 2018, the property insurance receivable was $49.2 million related to the net book value of the property damage write-off, as well as other expenses net of property damage insurance payments received. The carrying value of the Puerto Rico real estate assets and a majority of the property insurance receivable were transferred to RVI in connection with the consummation of the spin-off on July 1, 2018. The Company’s business interruption insurance covers lost revenue through the period of property restoration and for up to 365 days following completion of restoration. In 2018, rental revenues of $6.7 million were not recorded because of lost tenant revenue attributable to Hurricane Maria that has been partially defrayed by insurance proceeds. The Company will record revenue for covered business interruption in the period it determines that it is probable it will be compensated and the applicable contingencies with the insurance company are resolved. This income recognition criteria will likely result in business interruption insurance recoveries being recorded in a period subsequent to the period that the Company experienced lost revenue from the damaged properties. For the years ended December 31, 2018 and 2017, the Company received insurance proceeds of approximately $6.9 million and $8.5 million, respectively, related to business interruption claims, which is recorded on the Company’s consolidated statements of operations as Business Interruption Income. Following the completion of the spin-off of RVI, other than with respect to revenue losses and repair costs previously incurred by the Company, it is expected that insurance proceeds from Hurricane Maria will largely be allocated to RVI pursuant to the terms of the agreement governing the separation of the Company and RVI. Legal Matters The Company and its subsidiaries are subject to various legal proceedings, which, taken together, are not expected to have a material adverse effect on the Company. The Company is also subject to a variety of legal actions for personal injury or property damage arising in the ordinary course of its business, most of which are covered by insurance. While the resolution of all matters cannot be predicted with certainty, management believes that the final outcome of such legal proceedings and claims will not have a material adverse effect on the Company’s liquidity, financial position or results of operations. Separation Charges The Company recorded separation charges aggregating $4.6 million and $17.9 million in 2018 and 2017, respectively, which are included in General and Administrative Expenses. In 2017, the aggregate charge included the executive management transition, which was the result of the termination without cause of several of the Company’s executives under the terms of their respective employment agreements, as well as the elimination of 65 positions. Commitments and Guaranties In conjunction with the development and expansion of various shopping centers, the Company has entered into agreements with general contractors for the construction or redevelopment of shopping centers aggregating approximately $17.6 million as of December 31, 2018. At December 31, 2018, the Company had letters of credit outstanding of $16.3 million. The Company has not recorded any obligation associated with these letters of credit. The majority of the letters of credit are collateral for existing indebtedness and other obligations of the Company. In connection with the sale of the Company’s interest in a former unconsolidated joint venture (Note 3), the Company retained its pro rata guaranty obligation to fund amounts due to the joint venture’s lender, aggregating approximately $3.9 million at December 31, 2018, under certain circumstances, until the loan matures in October 2020 if such amounts are not paid by the joint venture. The principal of the former joint venture partner is obligated to indemnify the Company in the event that the Company is required to make any payment in connection with this pro rata guaranty obligation and, accordingly, the Company did not record any liability related to this guaranty. Leases The Company is engaged in the operation of shopping centers that are either owned or, with respect to certain shopping centers, operated under long-term ground leases that expire at various dates through 2070, with renewal options. Space in the shopping centers is leased to tenants pursuant to agreements that provide for terms generally ranging from one month to 30 years and, in some cases, for annual rentals subject to upward adjustments based on operating expense levels, sales volume or contractual increases as defined in the lease agreements. The scheduled future minimum rental revenues from rental properties under the terms of all non-cancelable tenant leases, assuming no new or renegotiated leases or option extensions for such premises and the scheduled minimum rental payments under the terms of all non-cancelable operating leases, principally ground leases, in which the Company is the lessee as of December 31, 2018, are as follows (in thousands):
Year |  | Minimum Rental Revenues |  |  | Minimum Rental Payments |
2019 |  | $ | 306,740 |  |  | $ | 3,253 |
2020 |  |  | 279,374 |  |  |  | 4,070 |
2021 |  |  | 243,379 |  |  |  | 4,080 |
2022 |  |  | 202,371 |  |  |  | 3,928 |
2023 |  |  | 150,909 |  |  |  | 3,417 |
Thereafter |  |  | 417,296 |  |  |  | 120,825 |
|  | $ | 1,600,069 |  |  | $ | 139,573 |

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