Payment Gap: Landlord sues retail giant for withholding rent at Midtown location
Apparel brand says state’s stay-at-home order removes its obligation to pay April, May charges
The landlord for the Gap’s Midtown Manhattan location is suing the retailer, which has refused to pay April and May rent citing the state’s stay-at-home order that has kept stores shuttered across the city.
The apparel brand has withheld $530,334 in charges — including water and snow removal fees — at its 1212 Avenue of the Americas store, according to Bloomberg. The lawsuit was filed Monday in Manhattan federal court.
In the face of widespread stay-at-home orders, traffic at retailers has cratered and Bloomberg Intelligence noted a 99 percent year-over-year decline in visitors to stores nationwide.
The lawsuit comes as the Gap announced earlier this week it would reopen 800 stores across the country in the coming weeks, a move it described as “responsibly aggressive,” the New York Times reported.
The retailer had been seeking to modify its leases and defer payments. In a court filing last month, lawyers for the Gap argued it could allege default, “although we believe that strong legal grounds exist to support our claim that under common law we are not obligated to pay rent for the stores that have been closed because of the governmental and public health authority orders.”
[Bloomberg, NYT] — Georgia Kromrei