The original leasing agreement was for a period of 10-years and Dick’s Sporting Goods agreed to pay a monthly rent of $40,000 per month for the space at 1690 N. Bechtle Ave., the lawsuit says. The agreement was honored between October of 2016 to February of 2018, according to the lawsuit.
However, Dick’s, which closed the Springfield store in March, claimed that USPG did not honor a co-tenancy requirement early last year regarding its 40,000 square-foot leasable floor area (LFA) at the Bechtle Crossing shopping center, the lawsuit says.
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More than 65 percent of leasable floor space in the shopping center was to be occupied by qualified tenants, according to the lease with Dick’s. However, that was not the case after Bed, Bath and Beyond closed its location there at the end of 2017, according to a letter referenced in the lawsuit that was sent from Dick’s to USPG.
At the time, USPG, also known as U.S. Properties Group, owned the properties located on 1590 through 1699 N. Bechtle Ave, the News-Sun previously reported.
The lease calls for a period of up to 12 months called a LFA co-tenancy violation period if a breach in the lease occurs. During that period the leasee can pay substitute rent, equal to approximately two percent of gross sales, as opposed to minimum rent.
At the end of that period the leasee has a 60 day window in which they can terminate the lease through a written notice, according to the lawsuit.
Dick’s closed its doors in Springfield on March 16. At the time, managers at the Springfield location deferred questions from the News-Sun to corporate. Repeated calls to Dick’s Sporting Goods corporate offices as to why the location was closing were not returned.
USPG alleges that Dick’s written notice to terminate its lease in March is invalid. The company alleges that Dick’s is still responsible for any unpaid rent as well as maintenance fees that have occurred since.
“USPG made demand on (Dick’s) to pay the sums now due and owing under the lease, but (Dick’s) has failed and refused to do so,” the lawsuit claims, adding that the sporting goods company has not paid rent since March.
However, whether the companies entered into a LFA co-tenancy violation and when that would have occured is currently being disputed by both companies.
USPG said if that violation period did occur it would have ended on December of 2018, meaning the window that Dick’s could legally withdraw from the lease would have ended in February the lawsuit says.
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Dick’s claimed in its notice of termination to USPG that the LFA co-tenancy violation ended in February and not in December, as USPG claims. Dick’s argues that therefore its written notice to terminate the lease in March is valid.
USPG argues in the lawsuit that even if that was the case, at least 65 percent of leasable floor space in the shopping center was occupied as of January thus ending the violation period and making Dick’s notice legally invalid.
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