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Times Square Old Navy to reopen after losing rent fight
Retailer had appealed order to pay $24M in back rent, interest
Shoppers will be able to return to a Times Square Old Navy store after waging a legal battle over the rent that ended in a victory for the landlord.
The 31,000-square-foot store was shuttered in 2020 as the pandemic emptied the normally bustling district. Gap, which owns Old Navy, seized the opportunity to fight against paying rent in court but a judge decided in favor of the landlord — twice.
The parent company and its subsidiary stores sit next to each other in the retail space of 1530 Broadway. The monthly rent for each store started at $1.5 million when the lease agreement was signed in 2015, and was set to increase to $2.3 million by 2032 when the lease expires, Crain’s reported.
When the pandemic hit, Gap ceased paying its rent, citing the loss of customers. Gap sued its landlord, Charles Moss in June 2020 to break the lease agreement.
In August 2021, a Manhattan Supreme Court judge ordered Gap to pay the $24 million in back rent it owed Moss, plus interest. The judge provided Gap a 10 percent reduction in rent because of the “extraordinary circumstances” of the pandemic.
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Gap appealed the decision but once again the courts sided with the landlord in a decision last week.
Retailers throughout the city made similar moves to stop paying rent when the pandemic hit, but retail rent collections climbed back up to nearly 90 percent by March 2021.
The Gap store has been operating despite the legal battle. The Old Navy location stayed closed, but is expected to reopen this year.
[Crain’s] — Cailley LaPara