City gets stuck in lease dispute between a mall and its tenant

On Behalf of | Jan 21, 2016 | real estate disputes

The Florida city of Palm Beach Gardens apparently has some special perception of the image it wants to portray. It has gotten involved in a lease dispute between a mall owner and a mall tenant in which the city is supporting the mall’s position that the types of stores in the mall must present a certain image of luxury and expensive taste. The posh Gardens Mall is currently in a dispute with an anchor tenant, Sears, regarding the right of Sears to sublet second-floor space to Dick’s Sporting Goods.

One would think that is not so bad. However, the mall does not want Dick’s selling sporting goods right next to Louis Vuitton and Gucci, two ritzy high-priced establishments that don’t mix well image-wise with everyday tastes in retail sales. When the city sided with the mall by passing a resolution opposing the sublease to Dick’s, it got itself invited into a lawsuit that has to do with the subletting rights of Sears.

A judge recently turned down the city’s request to be released from the lawsuit. Thus the city is put in an awkward position where it is now publicly spending taxpayer money to side with an image of luxury and riches, as opposed to dad’s fishing rods and mom’s fitness equipment. In any event, the issue most likely boils down to the legal right to sublet and how it is worded in the contract between Sears and the mall.

The mall claims that Sears cannot do this without getting the mall’s approval. The wording in the contract is likely what governs this lease dispute under Florida law. Nonetheless, the city again took on more than it could handle by arguing to the court that it was protecting the “health, safety and welfare of the public at large.” Sears mocked that argument, pointing out the lack of any important social problem existing in the dispute. Presumably, the city is not going to push further and argue next that there is a public health or welfare issue that makes it important to keep Luis Vuitton’s exclusive purses a good distance away from Dick’s sweat shirts and sneakers.

Source:, “Judge to Palm Beach Gardens: No escape from lawsuit by Sears”, Alexandra Clough, Jan. 14, 2016