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Nofsdad
Joined: 06 Jul 2003
Posts: 6742
Location: Central CA
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Posted: Tue Aug 19, 2008 4:13 pm Post subject: Why can't you evict undesirable tenants?
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Kmart and its Santa Rosa landlord have reached a multi-million dollar settlement to their long legal battle in a deal that allows the store to remain in its Cleveland Avenue location at least until 2010.
The agreement comes just weeks before an appellate court in Chicago was preparing to hand down the latest verdict in a five-year legal battle between longtime tenant Kmart and Edward Conner, its San Francisco landlord.
Conner has been trying to evict Kmart since 2003, claiming the retailer missed by one day the deadline to renew its lease for another five years. |
Damn... you just can't get rid of these people.
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he struggling retailer denied it missed the deadline and dug in for a long legal tussle. It claimed that even if it had missed the deadline, that didn't justify ousting it from the building it had called home since 1970.
The case went all the way to the U.S. Court of Appeals in Chicago in June, where Kmart's arguments that it was "only" one day late weren't terribly well received from the three-justice panel. |
Late is late pardner.
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Settlement discussions intensified earlier this month and payment was made last week, according to David Neff, Conner's appellate attorney. The case was officially dismissed Friday.
Kmart's strategy was risky because for every day it remained in the building as it fought the eviction, it became liable for "holdover rent" at fair market value, which was significantly higher than what it had been paying.
By the time of oral arguments, the back rent and interest Conner claimed had swelled to about $7.25 million, Neff said. He declined to specify the amount or other terms of the settlement. |
Let me gaze into my crystal ball here... I suspect it was somewhere close to oh... about 7.25 million bucks. There goes another PA price increase.
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Tim Laugero, retail specialist with commercial real estate brokerage Keegan & Coppin, has said he doesn't see how Kmart could pay rents based on the current market conditions.
Laugero has marketed the property to numerous other potential retailers, including plans that call for the building to be redesigned with space for several smaller stores.
He predicted Kmart will eventually leave and the site will be redeveloped to house multiple retailers. |
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SearsCanada
Joined: 29 Mar 2006
Posts: 1208
Location: Ontario, Canada
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Posted: Tue Aug 19, 2008 7:15 pm Post subject:
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I would argue that Mr. Conner settled for about $5 million (PLUS legal costs....), because it would be a 'bird in the hand' and probably more than the old lease renewal would have given him..... Just a guess, though.
For Sears Holdings (Kmart) this would keep them in their historic location at less than market value, and save Conner et al from the cleanup and redisgn costs it would take to get new tenants. Also, it keeps revenue coming in, as opposed to empty space during renovations.
But after Eddie telling us not that long ago that he wanted to see the end of the frivolous lawsuits, while the hell did he (or whomever he left in charge) not renew the freaking lease on time??? Just how much did this lengthy legal battle cost the corporation, Eddie? How much did you charge against the profits, the shareholders, and even the lowly associates who work so damned hard to make that money for you?
It's these business practices that tarnish the 'good name' of Sears (of course, the historic good name, not the new Sears Holdings name) and hurt the financial statements on a quarterly, if not daily, basis.
Good job, Eddie. Keep up the good work, you financial genius, you! 
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