Aug. 07–Ross Dress for Less is suing the owner of the struggling St. Louis Outlet Mall in Hazelwood, alleging the national chain of department stores is owed some of the rent it was charged as the mall failed to keep its tenants.
Ross Dress for Less, based in Dublin, Calif., opened its 35,000-square-foot store at the outlet mall at 5555 St. Louis Mills Boulevard in 2012. The 10-year lease it signed included language that allowed for reduced rent should the mall fall below 60 percent occupancy and the ability to terminate its lease if those conditions continued for a two-year stretch.
The lawsuit said Ross in March 2017 notified the mall owner, St. Louis Retail Outlet LLC, an entity operated by New York-based Namdar Realty Group, that the mall had fallen below that threshold as of May 2015 and was therefore entitled to the lower rental rate. The suit also said Ross Dress for Less was due overpaid rent for the period between May 2015 and February 2017.
Namdar acquired the 1.2 million-square-foot mall out of auction for $4.4 million in 2016.
Ross Dress for Less sent another letter to Namdar in February 2018 notifying the firm that the reduced occupancy allowed the chain to terminate its lease as well as recoup its overpaid rent, which by that point had totaled $142,520.12.
Namdar, in a response sent to Ross Dress for Less in early March, disputed the retailer’s claims, arguing tenancy was above the 60 percent threshold, but did not provide documentation supporting the position, the lawsuit said.
Executives with Namdar did not return requests for comment.
Ross Dress for Less, according to the suit filed Aug. 6, is seeking to recoup overpaid rent in the amount of $121,000.10, gain approval for its right to terminate the lease and receive payment of leasehold improvements in the amount of $490,295.99.
When the Mills Corp. opened the $250 million mall 16 years ago, the property had about 200 tenants. Occupancy gradually slipped and few tenants remain today, including some of its biggest leaseholders such as Cabela’s, which occupies 130,000 square feet, an 18-screen movie theater and the Ice Zone hockey rink that serves as the practice facility for the St. Louis Blues hockey team.
Research from Trepp indicates the mall, originally known as the St. Louis Mills when it opened more than 16 years ago, was 72 percent at the end of 2014, the last time Trepp reported on the property.
Ross Dress for Less terminating its lease would actually be a positive for the developers looking to turn the Hazelwood facility into a $92 million regional youth sports complex called PowerPlex.
Big Sports Properties, led by former newscaster and former St. Patrick Center CEO Dan Buck, has the mall under contract, but said redevelopment plans hinge on using the Ross Dress for Less space as well as the current Burlington store.
Ross Dress for Less vacating the space voluntarily would be one less hurdle for Big Sports Properties to clear as they look to close on the deal.
The massive proposal, including a 750-foot-long dome for indoor play, would put baseball fields and basketball and volleyball courts alongside entertainment, restaurants and retail on the site. Some current tenants could remain at the property.
Buck’s group still needs to overcome roughly $36 million debt held by a transportation development district established on the mall site.
The St. Louis Convention and Visitors Commission has agreed to contribute $6 million to help pay for the project. And the city of Hazelwood is offering to buy the outstanding TDD bonds to clear the way for Buck’s group to buy the mall property.
Some $6 million of a county contribution would go to the Hazelwood site to free up money for debt service. The city of Bridgeton is also partnering on the project, and $2 million would go toward turning the fields at the Bridgeton Municipal Athletic Complex just across Highway 370 from dirt to turf for tournament play.
This article provided by NewsEdge.